Iowa Attorney General Brenna Bird is suing the world’s largest proxy-advice firm for abusing its influence and threatening Iowans’ retirement savings by “lying” to investors.
Institutional Shareholder Services Inc. provides investors, such as mutual funds, hedge funds and pension funds, with independent, third-party research to guide their voting on corporate governance. The company is regarded as the world’s largest proxy-advice firm.
In a lawsuit filed by Bird on May 20, she alleges that Iowans’ retirement accounts are threatened by advice from Institutional Shareholder Services Inc., which, according to a news release, was “secretly pushing an undisclosed woke agenda,” and that the organization violated Iowa Code 714.16.
“Iowans expected sound, objective financial advice and voting from the world’s largest proxy advisor. Instead, they got deceived into advancing a woke agenda untested against real financial standards,” Bird said in the release.
Bird alleges in the suit that Institutional Shareholder Services Inc. advertised “objective” services, yet worked with “woke activist groups like Climate Action 100+, Ceres and The Children’s Investment Fund to shape recommendations without telling their clients,” she said.
Bird also alleges that Institutional Shareholder Services Inc. “secretly included woke environmental, social, governance (ESG) mandates in its main benchmark advice,” which misleads the company’s clients. She also asserts that the company’s owners, the German Deutsche Börse group and New York-based General Atlantic, are “committed ESG activists, creating undisclosed conflicts of interest.”
The company allegedly solely used ESG metrics and adopted ESG policies in its main products, Bird asserts in the suit.
Also asserted is that from 2022 to 2025, Institutional Shareholder Services Inc. recommended votes against board members based on race and ethnicity — a policy ended after President Donald Trump signed an executive order against proxy advisors in December 2025 — as well as that the company ran a side consulting business that sold ESG services to the same companies it rated, and opposed company leaders with a focus on financial analysis over ideology.
A multi-state coalition, including Alabama, Alaska, Florida, Indiana, Iowa, Kansas, Kentucky, Nebraska, Missouri, Montana, South Carolina, South Dakota, Tennessee, Texas, Utah and West Virginia, has banded together to fight against the “widespread harm” of ISS. Iowa’s lawsuit is filed alongside suits from Nebraska, West Virginia and Texas. Florida filed a suit against Institutional Shareholder Services Inc. in November.
“These advisors must give advice that protects Iowans’ retirement accounts and pensions — not advance their own political agenda,” Bird said in the release. “This lawsuit is about holding them accountable and restoring affected Iowans.”
The suit requests that Institutional Shareholder Services Inc. pay civil penalties of $40,000 per violation to disgorge all money and property acquired by means unlawful by state law and pay all costs and fees for prosecution and investigation and grant further relief as the court sees fit. ISS would also be legally forbidden from continuing to violate Iowa law.
Kyle Werner is the breaking news and public safety reporter for the Register. Reach him at kwerner@registermedia.com.
This article originally appeared on Des Moines Register: Iowa AG Brenna Bird sues ISS, says advice risks retirement savings
Reporting by Kyle Werner, Des Moines Register / Des Moines Register
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