AG Hilgers Sues World's Largest Proxy Advisor Firm Over ‘Coordinated’ ESG Advocacy and 'DEI' Promotion
by John Gage
(Picture courtesy of the Attorney General’s Office)
Attorney General Mike Hilgers announced a new lawsuit with three other states against Institutional Shareholder Services Inc. (ISS) over claims that they have promoted an Environmental, Social, and Governance (ESG) and Diversity, Equity, and Inclusion agenda with activist groups in a manner that undermined companies and investors.
“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,” Hilgers said in a statement Wednesday. “Despite heavy criticism for promising objectivity and delivering ideology, ISS has refused to make any changes. But you cannot promise one thing and deliver another in Nebraska. We are taking action to put a stop to it.”
Texas, Iowa, and West Virginia all filed separate lawsuits against ISS on Wednesday, too. Hilgers said that ISS worked with “activist groups” like Climate Action 100+, Ceres, and The Children’s Investment Fund “without disclosing their influence to clients.”
The Plains Sentinel has reached out to ISS for comment on the story. ISS, the largest proxy advisor firm in the world, provides advice to institutional investors that can have a substantial impact on how companies are governed.
In the lawsuit, Hilgers claims, “ISS runs a parallel ESG consulting business, selling expensive services to the same companies it covers in its research reports. This is no different than a health inspector selling cleaning services on the side.”
“Instead of providing its clients objective and impartial investment advice, as advertised, ISS has provided and continues to provide advice tainted by ISS’ own ESG ideological considerations untethered to its clients’ best financial interests and prepared in close coordination with ESG activists,” the lawsuit adds.
ESG was first coined by the United Nations Global Compact in 2004, and its goal is to create metrics that measure a company’s social and economic impact. The concept has come under attack as critics say its a method to politicize business, particularly in a left-wing direction.
The lawsuit also details how ISS pushed DEI in its advice to investors “regardless of effect on the company’s bottom line and share price.” “ISS nowhere discloses to its advisory clients that its recommendations based on race and ethnicity violate civil rights laws,” the lawsuit said.
Hilgers said that ISS’s policies has had a direct impact in Nebraska, citing the company opposing Warren Buffett as a director of Berkshire Hathaway.
“ISS exerts outsized influence over corporate decisions in Nebraska and the United States, injecting anti-fiduciary activism into the performance of investments that everyday Nebraskans hold and often rely on for retirement and financial well-being,” he said. “The fact that they could provide a disfavored recommendation as to seating Warren Buffet as a director at Berkshire Hathaway reflects how far they went astray in pursuit of their climate ideology.”
In late 2025, Florida filed a similar lawsuit against ISS over claims they were “manipulating corporate governance.”
— John Gage is the executive editor of The Plains Sentinel.