Twenty-four state attorneys general have sent letters to 25 asset management firms demanding answers about recent votes on proposals they claim are disproportionate. Support environmental concerns more than its shareholders.
All of the companies to be questioned had voted at least 75% of the time in favor of environmental proposals from the nonprofit Institutional for Shareholder Services (ISS), which were highlighted by environmental advocacy group Ceres.
“Asset managers’ support for these shareholder proposals was more than twice that of the overall market, which supported them only 37% of the time, and only 17% of these proposals received majority support,” said the letter, led by Montana Attorney General Austin Knudsen.
“Given this wide disparity, we are concerned that asset managers have outsourced their voting in this area to ISS or another third party and are failing to uphold their fiduciary duties,” the letter said.
Alabama Attorney General Steve Marshall, another lead signatory, said that as an elected official in his state, he has a responsibility to protect Alabamians, a role that also includes consumer protection.
Marshall said the letter aims to explore whether these financial firms have essentially “outsourced their due diligence” to a non-judicial entity whose agenda is more aligned with Washington Democrats and the green movement than their own shareholders.
“So, as far as adverse action against our consumers is concerned, I believe it is our obligation to take action in this regard,” he said.
Marshall said the letter is intended to get answers to burning questions, most importantly of which is “whether (these votes) are in the financial best interests of the shareholders who are shareholders of my state.”
“And, are you looking to maximize financial gain or pursue a political agenda?”
“One of these is consistent with their fiduciary responsibility. The other is not.”
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Fox News Digital contacted several of the companies listed above in the letter — those representing the most votes in line with the pro-environmental recommendations — and received only scant responses.
When contacted, a representative for Legal & General Investment Management (LGIM) – which votes in favour of ISS-recommended proposals around 95% of the time – declined to comment.
A person who answered the phone at Wilmington Trust’s media relations office declined to comment, saying the letter raised “pretty broad issues” and ended the call. The Delaware-based firm voted 88% in favor of the environmentally friendly recommendations.
Allianz Global Investors, which owns a 93% stake, did not respond to a request for comment. Neither did UBS Capital Management.
Maryland-based ProFund Advisors/ProShares — 93%, according to the letter — promised comment but did not respond further.
The letter outlined several specific proposals of concern, including 13 that would “set (greenhouse gas) targets for conventional energy producers and closely affiliated companies, effectively restricting the sale of their products.”
Ten other proposals sought to “limit (corporate) free expression” in compliance with the Paris Climate Agreement, while others set a net-zero-emissions deadline by 2050.
When asked about his main concerns, Marshall said the question is how many charter members of the organizations potentially being mentored by these companies are also members of these companies. Pro-ESG or net-zero Alliance.
Environmental, Social, and Governance (ESG) is an acronym for an investment principle that prioritizes environmental issues, social issues, and corporate governance.
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Caribou-Targhee National Forest near the Idaho-Wyoming border. (Jordan Early/Fox News Digital)
“They have an absolute agenda — one that has nothing to do with the financial benefit of investors,” he said.
“The question for these asset managers is, have you examined that conflict and is it having an impact on the recommendations for those votes?”
“Frankly, as an attorney, you care about disputes. But more importantly for the citizens of our state, are these disputes contrary not only to their financial interests, but to the economic interests of Alabama as a whole?”
Virginia Attorney General Jason Miyares, another state prosecutor who signed the letter, said the companies have an ethical responsibility to be “proper custodians” of their investors.
“Sound economics must take priority over social whims,” Miyares said, adding that shareholders’ resources “should not be funneled into the pockets of those motivated by irresponsible social and political agendas.”
