Pushing back against politicized investing, 21 state attorneys general signed onto a letter late Thursday warning 53 top asset management companies about the legal perils of focusing on environmental, social, and governance standards, known as ESG. 

The attorneys general’s letter is addressed to financial management firms—including BlackRock, JP Morgan and Goldman Sachs—that oversee a total of $40 billion in assets.

“We are writing this open letter to asset manager industry participants to raise our concerns about the ongoing agreements between asset managers to use Americans’ savings to push political goals during the upcoming proxy season,” says the 21-page letter, which was led by Attorneys General Austin Knudsen of Montana, Jeff Landry of Louisiana, and Sean Reyes of Utah, all Republicans. 

Also signing on to the letter were Republican attorneys general from Alabama, Arkansas, Georgia, Idaho, Indiana, Iowa, Kansas, Kentucky, Mississippi, Missouri, New Hampshire, Ohio, South Carolina, Tennessee, Texas, Virginia, West Virginia, and Wyoming.

“As explained further below, asset managers have committed to use client assets to change portfolio company behavior so that it aligns with the Environmental, Social, and Governance (ESG) goal of achieving net zero [carbon emissions] by 2050,” the state attorneys general’s letter continues. “This specific, political commitment changes the terms of the products offered, as well as engagements with individual companies.” 

Asset managers are legally required to act in the best fiduciary interests of their clients. In their letter, the state attorneys general specifically raise concerns about asset managers that, instead of acting in clients’ interests, push the goals of Climate Action 100+, an investor group aiming to combat climate change by influencing companies that emit greenhouse gases, and the Net Zero Asset Managers Initiative, a global investor group that supports the Paris climate accord.  

Beyond climate change, activist asset managers push political issues such as abortion, race, gender, and political spending, the letter notes. 

“We will continue to evaluate activity in this area in line with our ongoing investigations into potential unlawful coordination and other violations that may stem from the commitments you and others have made as part of Climate Action 100+, Net Zero Asset Managers Initiative, or the like,” the attorneys general add. 

The letter notes that, at shareholder meetings in 2023, asset managers will need “to choose between their legal duties to focus on financial return, and the policy goals of ESG activists,” since banks, insurers, and utility and energy companies face proposals from activists.

The letter from the state attorneys general is encouraging, said Will Hild, executive director of Consumers’ Research, a 94-year-old nonprofit organization that looks out for consumers.

“This is real leadership on display. Asset management firms have long used proxy season as means to force their woke agenda on the American people,” Hild told The Daily Signal. “Fortunately, actions from groups like ours and leaders at the state and federal level have pulled back the curtain on ESG and our country is finally seeing this scam for what it really is. With this letter, the attorneys general are sending these asset management firms a clear message, stay in your lane, or face legal action.”

The attorneys general directe the letter to these 53 asset management companies:

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