JEFFERSON CITY, Mo. – In an effort to enforce the laws as written and protect Missourians, Missouri Attorney General Andrew Bailey and 20 other state attorneys general warned more than 50 of the nation’s largest asset managers about Environmental, Social, and Governance (ESG) investments being made with Americans’ hard-earned money as annual shareholders’ meetings begin for many public companies. In a letter directed to 53 asset managers with $40 billion or more in assets, the attorneys general cite concerns that asset managers may be pushing the political goals of Climate Action 100+ and the Net Zero Asset Managers Initiative rather than acting in the best fiduciary interests of their clients, which is their legal obligation.
“I will always enforce the law as written and protect Missourians, which includes ensuring that asset managers fulfill their fiduciary duty to their clients,” said Attorney General Bailey. “My office is putting these companies on notice that we will do everything in our power to safeguard Missourians’ investments from being corrupted in favor of a radical social agenda.”
“We are writing this open letter to asset manager industry participants to raise our concerns about the ongoing agreements between asset managers to use Americans’ savings to push political goals during the upcoming proxy season,” the attorneys general wrote. “As explained further below, asset managers have committed to use client assets to change portfolio company behavior so that it aligns with the Environmental, Social, and Governance (ESG) goal of achieving net zero by 2050. This specific, political commitment changes the terms of the products offered, as well as engagements with individual companies.”
Attorney General Bailey and the coalition remind asset managers in the letter that they have extensive legal duties to their clients under federal and state law to act as a fiduciary to their clients which many appear to be disregarding in favor of their commitments to the Net Zero Managers Alliance and Climate action 100+, which push ESG initiatives.
In addition, Attorney General Bailey and the coalition note that during the 2023 proxy season asset managers will need “to choose between their legal duties to focus on financial return, and the policy goals of ESG activists” as banks, insurers, and utility and energy companies are all facing proposals from climate activists affiliated with organizations asset managers may have joined. Additionally, abortion and political spending and race and gender quotas may also be included in numerous proposals this year but are not financially justified – and ESG aims themselves are not valid defenses.
“We will continue to evaluate activity in this area in line with our ongoing investigations into potential unlawful coordination and other violations that may stem from the commitments you and others have made as part of Climate Action 100+, Net Zero Asset Managers Initiative, or the like,” the attorneys general warned.
Joining Missouri in sending the letter are the attorneys general from Alabama, Arkansas, Georgia, Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana, Mississippi, Montana, New Hampshire, Ohio, South Carolina, Tennessee, Texas, Utah, Virginia, West Virginia, and Wyoming.
Attorney General Bailey has been a staunch defender of Missourians’ investments since taking office. In addition to filing this letter, his office filed suit against the United States Department of Labor for its unlawful rule that would allow 401(k) managers to direct their clients’ money to ESG investments. General Bailey also joined a coalition of 21 state attorneys general in directing a letter to two proxy advisory companies, International Shareholder Services, Inc. and Glass, Lewis & Co. challenging their ESG investment practices. He will continue to enforce the laws as written and protect the investment accounts of millions of Missourians.