AG Coalition Accuses Proxy Advisors of Prioritizing Environment, Diversity over Financial Gain for Clients

  • A group of 22 AGs wrote a letter to proxy advisory firms International Shareholder Services, Inc. (ISS) and Glass, Lewis & Co. accusing the companies of potentially violating federal and state laws regarding the advice and duties of proxy advisors, as well as the companies’ contracts with states’ investment vehicles, by considering factors related to the environment and board participation when making voting recommendations.
  • The letter states that proxy advisors are obligated by contractual and fiduciary duties to consider only the economic value of investments in providing investment advice, but both ISS and Glass Lewis also have pledged to consider climate change efforts and diversity, equity, and inclusion when making voting recommendations regarding proposals and board members.
  • The letter asks the two companies to respond to the accusations and to provide further details regarding how they formulated and implemented the environmental and social considerations.