Late Monday night, over 20 state financial officials sent a letter to 20 asset managers and two proxy advisors asking for their views on shareholder proposals.

The letter expressed concern by the state financial officers over how asset management and proxy advisor firms are advising clients on voting in shareholder proposals. In many cases they appear unrelated to the core business of companies and in some cases have appeared to be advancing radical left-wing agendas, such as environmental, social and governance (ESG).

The State Financial Officers wrote to asset management companies:

We are concerned that the long-term economic interest of taxpayers may have been subordinated to social, environmental and political concerns, which are often separated from shareholder value, often through shareholder proposals.

As asset managers, you have an obligation to act in your clients’ best interests. This means that your votes must be in their favor when it comes to shareholder proposals. Make no mistake, your votes have a significant impact on behalf of clients. The top one percent of asset management firms manages 61 percent total assets in the industry.

In a letter sent to proxy advisory firms, state financial officers also noted that “left-wing agenda” ideas have “dominated shareholder proposal”.

Proxy-voting recommendations and advice related to environmental and social issues, as well as political and social matters are of particular interest. These topics have recently dominated shareholder proposals. Some ESG proposals appear to be ancillary or even contradictory with a company’s main business. Some recent shareholder proposals, for example, would have required oil companies to pledge loyalty to the Paris Climate Agreement; social media companies to crackdown on “hate speeches”; insurance companies to take race into consideration when underwriting insurance policies; and retailers to take an official position on abortion policy. These ESG proposals, at best, require costly audits, lengthy reports, and cumbersome policy that have no obvious link to the business of a company. They require that the companies be forced to devote significant time and resources to pursuing goals not related to shareholder value or relinquish certain parts of their businesses, including the products or services investors considered worthy of investment.

The letters also included a questionnaire that the companies were asked to complete. This detailed how they decide which shareholder proposals they will support, and how their firms evaluate the impact of each proposal before choosing which to accept.

Nebraska State Treasurer John Murante is a former chair of the State Financial Officers Foundation. He told Breitbart News that “for too long the ESG agenda was pushed forward by large investment managers such as BlackRock.”

Murante continued, “They [the firms] have manipulated votes to support issues that are ancillary to or even harmful to the core business of companies.” With these letters, our hope is to expose the fraud that is destroying shareholder value in the name an extreme progressive agenda.

Asset managers and proxy advisory firms that received the letter included: BlackRock (Vanguard Group), Fidelity Investments (UBS Group), State Street Global Advisors (State Street Global Advisors), Morgan Stanley, JP Morgan Chase, Credit Agricole, Allianz Group, Capital Group, Goldman Sachs, Bank of New York Mellon, Amundi, PIMCO, Legal & General, Edward Jones, Prudential Financial, Deutsche Bank

Alaska Commissioner of Revenue Adam Crum signed the letter along with Arizona State Treasurer Kimberly Yee. Florida Chief Financial Officer Jimmy Patronis also signed. Ohio State Treasurer Robert Sprague was among the 21 state financial officers who signed on. They were Alaska Commissioner of Revenue Adam Crum, Arizona state treasurer Kimberly Yee, Florida Chief Financial Officer Jimmy Patronis; Indiana state treasurer Dan Elliot; Iowa State Treasurer Roby Smith; Kansas State Treasurer Steven Johnson; Mississippi Auditor Mike Foley and Nebraska Auditor Mike Murante.

Will Hild is the executive director at Consumers’ Research. He stated that “ESG activists have abused the system far too long, with the help of large asset managers such as BlackRock, and their allies who work in the proxy advisory industry.” I applaud these state finance officers for demanding an answer and exposing how the fiduciary obligation has been eroded in order to obeisance the ESG agenda.

He added: “Using the votes of millions of investors who were unaware of the proposals, and the pension fund holdings they had amassed, they have pushed through proposals which are often not related to or even contrary to the financial interest of companies in the United States.”