Financial officials from 16 states are calling on State Street Global Advisors, one of the largest asset management firms, to stop deceptively pushing on shareholders only proposals that advance the ideological Environmental, Social and Governance (ESG) agenda, at the expense of their clients’ best financial interests.
In a letter to State Street CEO Ronald O’Hanley, sent Thursday and obtained by The Daily Caller, the officials urge the firm to honor its fiduciary responsibility to its clients:
“Our purpose in this letter is to encourage State Street to promote traditional fiduciary duty (advancing all clients’ objective economic interests), instead of serving the demands of global bodies and a subset of clients whose interests align with anti-fiduciary actions.”
While State Street has a fund designated “non-ESG,” all of its policy options provided to shareholders for approval deceptively incorporate elements of ESG, the officials write:
“This use of non-ESG-denominated funds to push ESG issues makes those non-ESG fund denominations at very least inapt, if not a demonstration of the provision of material misinformation.”
The officials also express concerns about commitments State Street has made to advance ESG by favoring, or shunning, companies based on their ESG adherence, rather investing based on their profit potential. By doing so, State Street isn’t just threatening the country’s market-based system, but is also violating U.S. fiduciary standards, they warn:
“State Street’s signature on these commitments is obviously playing out in its voting and engagement actions and presents a clear violation of United States fiduciary standards. Promoting partisan, non-economically based, financially immaterial, or divisive social issues threatens our market-based system.”
In closing, the officials make two requests of State Street. First, they ask State Street to “treat all proposals objectively and treat all similar risks in the same way,” instead of “privileging ESG.” Second, they ask that shareholders be provided “at least one voting choice option that endorses ‘pro-fiduciary’ proposals while opposing ESG-supporting proposals.”