Key Points:
- 21 state financial officials sent letters to top Wall Street CEOs, warning against integrating sustainability and climate factors in investments, engagement, or proxy voting.
- The letters reject using climate change and international ESG frameworks, including the EU’s CSRD, as risk factors guiding investment strategy.
- Officials threatened business repercussions, demanding firms align with “traditional fiduciary duty” and avoid “activist” environmental and social goals.
Growing Anti-ESG Pressure
State treasurers and financial officers from Alabama, Alaska, Arizona, Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana, Mississippi, Missouri, Nebraska, North Carolina, North Dakota, Oklahoma, South Carolina, Pennsylvania, Utah, West Virginia, and Wyoming have escalated their campaign against ESG investing.
In letters to CEOs of BlackRock, JPMorgan Chase, Goldman Sachs, Vanguard, Morgan Stanley, and others, they expressed “deep concern about the erosion of traditional fiduciary duty in American capital markets.”
They argued that sustainability integration represents an ideological push “under the banner of so-called ‘long-term risk mitigation.’”
Rejecting Climate as a Deterministic Risk
The letters specifically targeted treating climate change as a guaranteed future threat.
“Climate change is a common example of this issue, where potential risks—often uncertain and already accounted for in insurance and financial markets—are framed as certain and catastrophic to justify forcing companies to take immediate actions that may not align with their long-term business interests.”
Demands to Wall Street Firms
Officials outlined conditions for doing business with their states, including:
- Abandoning use of passive funds for activist corporate engagement or proxy voting.
- Avoiding international political agendas like net zero mandates, natural capital frameworks, or the EU’s CSRD sustainability reporting regulation.
- Aligning all voting decisions solely with shareholder value.
- Disclosing participation in ESG coalitions such as Climate Action 100+, GFANZ, or PRI.
A Continuing Political Battle
The move follows a wave of anti-ESG actions since the election of President Trump—ranging from divestments and lawsuits to political campaigns urging firms to abandon environmental and social priorities.
While noting “encouraging steps” by some firms—such as exiting climate alliances and softening ESG rhetoric—state officials warned that “more work must be done” to meet their standards.
“We expect detailed evidence that your firm’s investment practices, proxy voting and corporate engagement behavior (which should be minimal to begin with), and institutional affiliations align with traditional fiduciary standards, as widely understood as short as ten years ago, and comply with applicable state laws.”
Related Content: BlackRock Decreases Support for ESG Proposals Amid GOP Pressure
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