A group of 26 financial officers from 21 states sent letters to 18 major financial institutions this week, warning them to abandon environmental, social, and governance (ESG) practices if they wish to continue doing business with their states.
The letters said ESG has undermined the traditional fiduciary duty that firms owe their clients, focusing solely on financial return, and instead prioritizes advancing political agendas.
“Fiduciary duty has long been a critical safeguard that facilitated efficient capital allocation grounded in financial merit rather than political ideology,” the letter said. “But that clarity is being diluted under the banner of so-called ‘long-term risk mitigation,’ where speculative assumptions about the future, like climate change catastrophe, are used to justify ideological conclusions today.”
Signers include state treasurers, auditors, and comptrollers from states like Alabama, Arizona, Florida, Louisiana, Missouri, North Carolina, Pennsylvania and Utah. BlackRock CEO Larry Fink and 17 other financial leaders were recipients of the joint letter. Others include executives from Vanguard, Fidelity, JP Morgan, Goldman Sachs, and State Street.
The letter said that while some firms have started leaving global climate coalitions and reducing ESG-related proxy votes, the state financial officers want “durable assurances” that fiduciary duty, not politics, drives investment decisions.
