Bloomberg Law
Jan. 31, 2023, 9:08 PMUpdated: Jan. 31, 2023, 9:45 PM

Glass Lewis Pushes Back on Republican Criticism of ESG Advice (1)

Clara Hudson
Clara Hudson

Glass, Lewis & Co. on Tuesday responded to Republican criticism of the proxy voting advice it gives on ESG proposals, saying its recommendations on climate change and diversity proposals promote “the economic interest of shareholders.”

Republican attorneys general from 21 states including Texas, Utah and West Virginia sent a letter to Glass Lewis and Institutional Shareholder Services Inc. earlier this month that took aim at the firms’ proxy voting guidelines for the 2023 season. Many of the recommendations on environmental, social and governance issues aren’t material to investors and “may threaten the economic value” of their states’ investments and pensions, the Republicans said.

In response, Glass Lewis said it weighs making voting recommendations on climate change as well as board and workforce composition “as they relate to mitigating risk and promoting the long-term economic interest of shareholders.”

Glass Lewis said it routinely recommends against shareholder proposals on environmental and social issues “that—however worthwhile as a social goal—have not demonstrated a nexus to shareholder value.”

Glass Lewis and ISS are the two biggest firms that advise shareholder voting at companies’ annual meetings. The advisory firms are the latest targets of a Republican crusade against ESG investing, with officials in Florida and other red states pledging to purge such investments from pension funds and targeting asset managers like BlackRock Inc. for supporting the idea.

“Climate risk—how companies are managing the risks and opportunities presented by climate change—is widely recognized as a material risk-return factor today,” Glass Lewis said Tuesday.

ISS didn’t immediately respond Tuesday to a request for comment.

The Republican officials also took issue with the two firms’ pledges to recommend votes against certain directors on boards lacking in gender or racial diversity. In response, Glass Lewis said its approach to racial equity audits “is also company-specific and grounded in considerations of shareholder value.”

“We will generally recommend in favor of well-crafted proposals requesting that companies undertake a racial or civil rights-related audit when we believe that doing so could help the target company identify and mitigate potentially significant risks,” the firm said.

(Updates with more background on Republican opposition in fifth paragraph.)

To contact the reporter on this story: Clara Hudson in Washington at

To contact the editors responsible for this story: Jeff Harrington at; Michael Ferullo at

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