States send letter to asset managers opposing ESG (2023)
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Attorneys general from 21 states signed and sent a letter on March 30 to some of the biggest and best-known asset management companies (AMCs) in the country. The letter threatened state divestment from AMCs that incorporate ESG policies into their investment strategies:
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A coalition of 21 state attorneys general sent a stark warning to dozens of financial institutions and asset managers, warning them against pursuing woke environmental and social initiatives. In a letter sent Thursday to 53 of the nation's largest financial institutions, which collectively manage trillions of dollars worth of assets, the attorneys general threatened to take legal action if the firms veer from the best interests of their clients while pushing social priorities. The effort, led by Montana, Utah and Louisiana, comes ahead of proxy season during which most companies hold annual shareholder meetings where they vote on key policy initiatives. "This ESG nonsense is filtering into a lot of our states and the way they're doing it is really, really concerning and probably flagrantly illegal," Montana Attorney General Austin Knudsen told Fox News Digital in an interview. "Pushing it through these asset managers and through these proxy votes is extremely concerning." "The message is: 'Stay in your lane and do what you're supposed to do. You have a fiduciary obligation under our various states laws to maximize investment. That's your job. That's what you're supposed to be doing. We're aware of state law and if it needs be, we will defend our state pensioners against anything outside that lane.'" The letter, first obtained by Fox News Digital, stated that in recent years large asset managers, which hold majority stakes in major publicly-traded companies, have used client assets to change companies' behavior to align with so-called environmental, social and governance (ESG) standards. Critics—including attorneys general, state treasurers, the energy industry and consumer advocacy groups—have accused ESG-focused asset managers of sidestepping their legally-mandated fiduciary duty of looking out for the wellbeing of clients whose money they manage. "You are … not only bound to follow the general laws discussed above but also have extensive responsibilities under both federal and state laws governing securities," Knudsen and the other attorneys general stated in the letter. "Broadly, those laws require you to act as a fiduciary, in the best interests of your clients and exercising due care and loyalty." "Simply put, you are not the same as political or social activists and you should not be allowing the vast savings entrusted to you to be commandeered by activists to advance non-financial goals," it continued. … The letter Thursday also warned against taking certain actions promoting race and gender quotas or abortion. More than 20 abortion-related proxy measures have been proposed this year, more than every other year combined, according to the shareholder advocacy group As You Sow. In addition to BlackRock, the letter was sent to Franklin Templeton, Goldman Sachs, HSBC, Invesco, JP Morgan, State Street and dozens of other asset managers.[1] |
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See also
- Environmental, social, and corporate governance (ESG)
- Economy and Society: Ballotpedia's ESG newsletter
External links
Footnotes
- ↑ Note: This text is quoted verbatim from the original source. Any inconsistencies are attributable to the original source.
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