Missouri AG sues advisory firm, alleges pushing clients toward ESG over best financial interests

Missouri Attorney General Catherine Hanaway has filed a lawsuit against Institutional Shareholder Services, alleging the proxy adviser is steering investors toward left-wing Environmental, Social and Governance voting choices instead of prioritizing shareholders’ financial interests.

“ISS has quietly leveraged its influence over corporate governance to steer institutional shareholders toward a radical ESG worldview that Missourians never asked for," Hanaway said in filing the suit Tuesday. "Missourians deserve transparency, accountability, and investment decisions focused on protecting their financial future." 

ISS, which as a proxy advisory firm advises managers of such investments as hedge funds and mutual funds owning shares of multiple companies on how to vote, and can vote for them in shareholder votes, denied the allegations. 

“ISS is confident in its compliance with applicable laws and remains committed to providing independent, objective research and analysis that helps clients make informed decisions consistent with their own voting policies and priorities," an ISS spokesperson told Just the News. "We look forward to addressing any questions through the appropriate legal process," 

Hanaway, a Republican, argued in the announcement that universities, large investment vehicles, and retirement systems – including Missouri’s own Public School and Education Employee Retirement System – rely on ISS to guide the voting of their holdings. 

If the company advances ideological agendas over prioritizing financial returns, Hanaway said, it risks the investments of Missourians whose pensions, savings, and investments depend on the success of those business decisions.