A coalition of state attorneys general is working with Nebraska AG Michael Hilgers to try to cancel the undue influences regarding extreme leftist social agendas several foreign corporations have been imposing on American companies.
According to a new report posted at RedState.com, there are two foreign-owned corporations that have been exercising a huge influence over corporate boards in America.
A lawsuit by Hilgers, and supported by other state chief legal officers from more than a dozen states, accuses Institutional Shareholder Services of pushing biased “climate and DEI agendas” to boards even while claiming its advice is neutral.
ISS and another company, Glass Lewis, are “proxy advisory” companies and they tell large investors like pension funds and such how to vote their shares in corporate elections.
“If you have a 401(k), an IRA, or a pension, there’s a good chance ISS has been voting your money. Most Americans have no idea,” the report explained. “Together, the two firms control roughly 97 percent of that market. Both are foreign-owned. ISS is majority-owned by Deutsche Börse, a German company.”
They are “unaccountable foreign-owned private corporations,” according to Florida Attorney General James Uthmeier, who is pursuing yet another action against them.
And he charges they are manipulating shareholder votes “behind closed doors.”
The new complaint, pending in court in Nebraska, accuses ISS of telling investors to vote against corporate members it believed “weren’t doing enough on emissions reductions or racial diversity, while never checking whether any of that was actually good for the people whose money was on the line.”
That agenda commonly is used by activists on those issues, racism, global warming, and such. This case is at a new level because of the purportedly neutral advice from the companies.
And ISS is accused of coordinating its ideological agenda, before it was delivered to corporations, with activists like the Children’s Investment Fund, Climate Action and such.
Hilger told RedState, “ISS sold Nebraska investors on the promise of objective, independent research. What they were actually getting was advocacy — coordinated with ESG activist organizations, untested against any financial standard, and driven by an ideological agenda that ISS never disclosed. You cannot promise one thing and deliver another in Nebraska.”
The report pointed out that even ISS’s own insiders cast doubt on the company agenda to deliver biased opinion in place of factual research,.
One internal email said, “I wish we had a better process (and one that didn’t rely so heavily on the opinions of non-experts, frankly),” and another said, “ISS ESG data probably isn’t accurate.”
The filing explained in 2021 ISS told investors to think twice about re-electing Warren Buffett to his own board over “climate concerns.” That’s even though Berkshire Hathaway stock rose more than 50% over the previous five years.
The report noted a senior ISS official acknowledged the bias: “It is in line with the other climate risk-driven recs that we’ve made this year,” an internal statement said.
ISS did not respond to RedState’s request for comment.
President Donald Trump already signed an executive order, just months ago, directing federal regulators to go after the proxy advisory industry, “calling out ISS and Glass Lewis for using their influence to ‘advance and prioritize radical politically-motivated agendas,’” the report said.
West Virginia AG JB McCuskey said, “ISS has, itself and through its proxies, exerted massive, secretive influence over major portions of our economy, leading to a restructuring of board rooms into political machines designed to destroy coal, gas and many of the values that West Virginians hold dear.”
The multi-state action calls for civil penalties against the companies, punishment to include paying for direct economic damages, restitution, all costs and fees, as well as a court order preventing the company “from committing or continuing to commit further deceptive acts or practices.”
