CHARLESTON -- Today, West Virginia Attorney General JB McCuskey filed a lawsuit against Institutional Shareholder Services Inc. (ISS), the world’s largest proxy advisor firm, claiming the company misled West Virginia investors. ISS promised objective advice while promoting an undisclosed ESG (Environmental, Social and Governance) agenda and coordinating with activist groups.
“West Virginia citizens, investors and businesses demand a marketplace that is free from undue influence. ISS has, itself and through its proxies, exerted massive, secretive influence over major portions of our economy, leading to a restructuring of boardrooms into political machines designed to destroy coal, gas and many of the values that West Virginians hold dear. That stops today. The market works best when it’s free, and this is a huge step to returning to that ideal,” Attorney General McCuskey said.
The lawsuit claims ISS falsely advertised its services as objective, while actually working with ESG activist groups like Climate Action 100+, Ceres, and The Children’s Investment Fund, to shape recommendations, without disclosing their influence to clients who were expecting neutral recommendations. The lawsuit alleges those deceptive actions are a violation of the West Virginia Consumer Credit and Protection Act.
ISS’s owners, Deutsche Börse AG and General Atlantic, are also committed ESG activists, creating undisclosed conflicts of interest. The company used ESG metrics without studying financial impact, adopting broad ESG policies without analyzing their effect on shareholder value or company performance.
Additionally, the lawsuit claims ISS opposed leaders who focused on financial analysis over ideology, citing Warren Buffett as an example.
From 2022 to early 2025, ISS allegedly recommended votes against board members based on race and ethnicity – a policy the lawsuit says was illegal and not disclosed to clients. ISS ended this after a 2025 Executive Order. On the side, ISS ran a consulting business selling ESG services to the same companies it rated, without fully disclosing this conflict of interest.
The lawsuit follows wider national concerns about proxy advisers like ISS, with U.S. officials and financial leaders criticizing the firm’s influence and conflicts of interest.
Florida first filed a lawsuit against ISS in November. West Virginia, Nebraska, Iowa, and Texas join in filing suit against ISS today. The Multistate Proxy Advisor Coalition aims for coordinated efforts and a unified front against what they call widespread harm from ISS’s practices. The Multistate Proxy Advisor Coalition includes West Virginia, Alabama, Alaska, Florida, Indiana, Iowa, Kansas, Kentucky, Nebraska, Missouri, Montana, South Carolina, South Dakota, Tennessee, Texas, and Utah.
Read a copy of the lawsuit here.