State of Texas 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. Texas asserted violations of the Texas Deceptive Trade Practices Act-Consumer Protection Act, alleging that ISS made false representations that it provided “independent and objective” advice and helped consumers make “informed decisions” when “[i]n actuality, ISS prioritizes its own environmental, social, and governance (‘ESG’) agenda over the fiscal well-being of its clients.” Texas alleged that ISS failed to disclose that “the ESG initiatives it prioritizes are not in its customers’ best financial interests,” failed to disclose its involvement with ESG activists, and failed to disclose it is “wholly owned” by ESG activists. Texas requested that the court enter a temporary restraining order enjoining ISS from failing to disclose its ESG initiatives to Texas consumers and also requested declaratory relief, a permanent injunction, civil penalties, and attorneys’ fees and costs.