State of Iowa ex rel. Bird v. Institutional Shareholder Services, Inc.

On May 20, 2026, the attorneys general of Iowa, Nebraska, Texas, and West Virginia each filed a lawsuit in state trial courts against the proxy adviser Institutional Shareholder Services, Inc. (ISS) alleging that ISS violated state deceptive trade practice and consumer protection laws by failing to disclose how environmental, social, and governance (ESG) considerations affected ISS’s advice to its shareholder clients. Florida previously filed a similar suit against ISS and Glass, Lewis & Co. LLC. Iowa asserted that ISS violated the Iowa Consumer Fraud Act (ICFA), alleging that ISS had placed “its own Environmental, Social and Governance (‘ESG’)-driven ideological values ahead of investor interests,” including by adopting policies to force companies to embrace “net zero” climate commitments. The complaint alleged that net-zero was “impossible for farmers, ranchers, cattlemen and for raising hogs” and that net-zero advocates “are undermining or erasing significant parts of Iowa’s economy.” Iowa alleged that ISS violated the ICFA by representing that its research was “objective and impartial” when in fact the research was “tainted by ESG considerations” without financial analysis of those considerations; followed from “close coordination with ESG activists”; and did not disclose material conflicts of interest. In addition, Iowa alleged that ISS published “climate-related advice and recommendations without expertise, blindly utilizing data provided by ESG activists without applying a critical eye or seeking data providing contrary views,” and that ISS failed to disclose that it was paid “lucrative consulting fees” for advice on issues addressed in its reports and that ISS’s owners were “ESG activists.” The complaint requested declaratory and injunctive relief, civil penalties, disgorgement of moneys or property acquired by unlawful means, and costs and fees.