CHARLESTON — West Virginia Attorney General Patrick Morrisey has joined a 21-state coalition in writing a letter to two of the nation’s largest proxy advisory firms about concerns with how environmental, social and governance considerations affect the firms’ proxy voting recommendations and conflict with the financial interests of their clients.
Institutional Shareholder Services and Glass Lewis & Co. recently updated voting guidelines for the 2023 proxy season. Both firms support the priorities established by an international group of financial institutions committed to aligning their lending and investment portfolios with net-zero emissions by 2050. By letting these net-zero initiatives inform their proxy advice, Morrisey says ISS and Glass Lewis are abandoning their fiduciary duties to their clients and adopting a radical environmental agenda that experts predict is not attainable.
Additionally, ISS and Glass Lewis have pledged to recommend votes against certain directors on boards that they view as having insufficient racial, ethnic or sex-biased diversity under arbitrary quotas they established.
According to Glass Lewis’ website, proxy advisory firms “provide institutional investors with research and data, as well as recommendations on management and shareholder proxy proposals that are voted on at an organization’s annual and special meetings.”
“These companies should only consider the economic value of investments, not work to advance Biden’s far left woke climate change agenda,” Morrisey said, joining in writing that the companies’ “actions may threaten the economic value of our States’ and citizens’ investments and pensions—interests that may not be subordinated to [those companies’] social and environmental beliefs or those of [their] clients.”
Morrisay says that means the firms are recommending votes based on social goals rather than the best financial interests of their beneficiaries.
The coalition also asked for information and assurances from ISS and Glass Lewis that they will uphold their legal obligations in performing proxy advisory services.
Morrisey has led coalitions in challenging proposals from the Securities and Exchange Commission to saddle American businesses with crippling ESG-related disclosure requirements. He also fought back against the Commodities Futures Trading Commission and bank regulators when they proposed to do much the same. He has also joined a major coalition in writing a letter to BlackRock Inc., urging the financial firm to “come clean on whether it actually values our states’ most valuable stakeholders, our current and future retirees, or risk losses even more significant than those caused by BlackRock’s quixotic climate agenda.”
Morrisey joined the Texas- and Utah-led letter to ISS and Glass Lewis with AGs from Alabama, Alaska, Arkansas, Georgia, Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana, Mississippi, Missouri, Montana, Nebraska, New Hampshire, Ohio, South Carolina and Virginia.
