“As Attorney General, I will uphold the law as written, which includes holding investment companies to their fiduciary duty,” said Attorney General Bailey. “My Office will do everything in its power to ensure that financial institutions are providing recommendations based upon the economic value of prospective investments – as the law demands – rather than squandering Missourians’ hard-earned retirement savings on funding a radical environmental ideology.”
By acting as proxy advisers, ISS and Glass Lewis act as independent research firms that provide voting recommendations for institutional investors. Both organizations have pledged their support to the priorities of an international group of financial institutions with the goal of aligning their portfolios with “net zero” emissions by 2050. By prioritizing left-wing policy goals over financial returns, the companies appear to be abandoning their fiduciary duties in favoring an environmental agenda over their clients’ financial gains.
“It has come to our attention that you have made several commitments that may interfere with your ability to honor your legal obligations,” the attorneys general state in the letter. “Your duties include acting with reasonable diligence and without conflicts of interest… without subordination of the plan’s interest “to unrelated objectives” pertaining to social or environmental policy.”
Additionally, the letter asserts that ISS and Glass Lewis have “pledged to recommend votes against certain directors on boards that you view have insufficient racial, ethnical, or sex-based diversity.”
“We question how such recommendations and the policies that lead to them, are based on the financial interests of the investment beneficiaries rather than other social goals,” the attorneys general conclude their letter. “Your actions may threaten the economic value of your State’s and citizen’s investments and pensions – interests that may not be subordinated to your social and environmental beliefs, or those of other clients”.
Missouri sent the letter along with the attorneys general of the states of Alabama, Alaska, Arkansas, Georgia, Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana, Mississippi, Montana, Nebraska, New Hampshire, Ohio, South Carolina, Virginia, West Virginia, Utah, and Texas.
The full letter can be viewed here: https://ago.mo.gov/docs/default-source/press-releases/2023-01-17-utah-texas-letter-to-glass-lewis-iss.pdf?sfvrsn=d3030948_2