State Treasurer Riley Moore today announced the introduction of House Bill 2862, a bill he proposed to lawmakers to prevent state pension and taxpayer dollars from supporting proxy voting activism by liberal fund managers and proxy vote advisory firms on Wall Street.
The bill requires the state’s investment boards to cast proxy votes based on the financial interests of pensioners and taxpayers, rather than Environmental, Social and Governance (ESG) factors.
“West Virginia needs to take back control of its shareholder voting rights to ensure our public funds are not being used to advance social and political agendas that go against the financial interests of our pensioners and taxpayers,” Treasurer Moore said. “With the Biden administration and Wall Street activists increasing the use of ESG with retirement investments to advance their woke agendas, it’s critical for states to use our power in the marketplace to stand up for our citizens’ financial security.”
Proxy voting is an important process that allows shareholders to vote on key issues while not personally attending corporations’ annual shareholder meetings.
However, in recent years the world’s largest asset managers – including BlackRock, Vanguard and State Street – have leveraged proxy voting authority to further ESG measures.
These firms most often use research from two proxy vote advisory firms – Institutional Shareholder Solutions (ISS) and Glass Lewis & Co. – to vote on shareholder matters. Together, these two firms account for approximately 97 percent of the total advisory service market share.
While these firms analyze publicly traded companies on financial matters, they have also expanded the umbrella of ESG research to include other social issues, including whether the companies provide access to abortion care, if they are curtailing business with firms tied to the fossil fuel industry, and other matters related to diversity, equity and inclusion among corporate staffing.
The U.S. Securities and Exchange Commission provides minimal oversight of proxy vote advisory firms.
Treasurer Moore said the increased alignment of proxy vote advisory firms and ESG advocates on Wall Street demonstrates the need for states to take greater action.
“This proxy cartel demonstrates how the woke elites use the façade of ESG to impose their radical ideologies across the private sector,” Treasurer Moore said. “As state leaders, we must take action to reassert ourselves in this process so that these firms are not able to impose activist agendas that go against our states’ interests and the rights and values of our citizens.”
Sponsored by Delegate Dean Jeffries, R-Kanawha, House Bill 2862 has been referred to the House Judiciary Committee for consideration.