Montana Attorney General Austin Knudsen is spearheading a coalition of 24 attorneys general in a high-profile inquiry into whether major asset managers are neglecting their fiduciary responsibilities to their clients. The coalition sent a letter on Thursday to 25 top asset managers, raising concerns about their support for environmental shareholder proposals recommended by Institutional Shareholder Services (ISS), which were flagged by the environmental activist group Ceres.
The attorneys general are questioning whether these asset managers are failing to meet their fiduciary duties by outsourcing their voting decisions to ISS or other third parties, without conducting independent financial analyses of the proposals. The letter suggests that asset managers appear to be prioritizing social credit over their clients’ financial interests.
“The asset managers seem more focused on earning social credit than on maximizing returns for their clients,” Attorney General Knudsen said. “If they are deferring their decision-making to environmental activist groups, they are not fulfilling their fiduciary duties. With the market’s general disapproval of these proposals, this situation warrants serious scrutiny.”