For years, two little-known firms have wielded enormous influence over corporate America while operating almost entirely outside public scrutiny. Now a growing coalition of Republican attorneys general is attempting to drag that influence into the spotlight — and potentially dismantle part of the ESG machinery that conservatives argue quietly reshaped boardrooms across the country.
Nebraska Attorney General Michael Hilgers announced Wednesday that his office has filed suit against Institutional Shareholder Services, better known as ISS, accusing the proxy advisory giant of misleading investors while using shareholder voting power to push climate activism and diversity mandates throughout corporate America.
The lawsuit is backed by attorneys general from at least 17 states.
Most Americans have never heard of ISS or its chief competitor, Glass Lewis. But together, the two firms effectively dominate the proxy advisory industry, controlling roughly 97 percent of the market. Their business revolves around advising institutional investors, pension funds, mutual funds, and asset managers on how to vote shares during corporate elections and shareholder resolutions.
In practice, that means they often help determine who sits on corporate boards and which political or environmental policies companies adopt.
If you have a retirement account, pension, or 401(k), there is a good chance these firms have influenced votes tied to your investments without you ever knowing it.
That lack of visibility is exactly what Republican state officials are targeting.
Florida Attorney General James Uthmeier described ISS and Glass Lewis this week as “unaccountable foreign-owned private corporations” manipulating shareholder votes “behind closed doors.”
ISS is majority-owned by Deutsche Börse, the German financial exchange company.
According to Nebraska’s complaint, ISS repeatedly advised investors to punish companies and board members that failed to meet certain climate or diversity benchmarks, even when there was little evidence those policies financially benefited shareholders.
The lawsuit alleges ISS coordinated behind the scenes with activist ESG organizations including Climate Action 100+, Ceres, and The Children’s Investment Fund while presenting its guidance as objective and independent research.
“ISS sold Nebraska investors on the promise of objective, independent research,” Hilgers said in a statement. “What they were actually getting was advocacy.”
The complaint paints a picture of a firm internally uncertain about the reliability of its own ESG analysis.
Internal company emails cited in the lawsuit reportedly show employees questioning whether the data and recommendations being pushed by ISS were even accurate.
“I wish we had a better process,” one employee allegedly wrote, “and one that didn’t rely so heavily on the opinions of non-experts.”
Another internal message stated bluntly: “ISS ESG data probably isn’t accurate.”
One of the more striking examples involved Warren Buffett and Berkshire Hathaway.
In 2021, ISS reportedly advised investors to reconsider Buffett’s board role because of climate concerns despite Berkshire stock rising more than 50 percent over the previous five years. According to the lawsuit, ISS never conducted a serious financial analysis of what destabilizing Buffett’s leadership could mean for shareholders.
A senior ISS official allegedly acknowledged internally that the recommendation would likely provoke backlash but justified it as part of broader climate-related voting campaigns.
Nebraska’s lawsuit also accuses ISS of running a conflict-ridden consulting business by selling advisory services to companies it was simultaneously evaluating and scoring.
The complaint compares the arrangement to “a health inspector selling cleaning services on the side.”
ISS has not publicly responded to the allegations.
The legal offensive is expanding rapidly beyond Nebraska. Iowa, Texas, West Virginia, and Florida all launched related actions this week as part of a broader Multistate Proxy Advisor Coalition targeting the proxy advisory industry.
Florida’s action seeks financial penalties against ISS and Glass Lewis, restrictions on future operations, and restitution for allegedly affected investors.
The coalition also has support from the White House.
In December 2025, President Trump signed an executive order directing federal regulators to scrutinize proxy advisory firms more aggressively, accusing ISS and Glass Lewis of weaponizing shareholder voting power to advance “radical politically-motivated agendas.”
West Virginia Attorney General JB McCuskey framed the issue in especially stark terms.
“ISS has exerted massive, secretive influence over major portions of our economy,” McCuskey said, accusing the firms of helping transform corporate boardrooms into political enforcement mechanisms hostile to industries like coal and natural gas.
“That stops today.”
