A coalition of state treasurers and financial officers from 21 US states has issued letters to the CEOs of prominent investment firms, including BlackRock, JPMorgan Chase, and Goldman Sachs, among others. The correspondence warns these firms against embedding sustainability and climate considerations, as well as the EU’s Corporate Sustainability Reporting Directive (CSRD), into their investment strategies and engagement activities.
In their communication, the state officials expressed significant concern regarding the perceived erosion of traditional fiduciary duty within US capital markets. They argued that the recent trend of asset managers integrating sustainability factors reflects a pursuit of ideological objectives, which they claim is being justified under the guise of ‘long-term risk mitigation.’
These letters represent the latest in a series of anti-ESG initiatives by US politicians, which have gained traction particularly since the election of President Trump. Such initiatives have led to divestments from asset managers involved in climate-focused coalitions, lawsuits accusing firms of using climate factors to manipulate markets, and other legal actions aimed at discouraging environmental and social-focused investment policies.
While acknowledging some positive steps taken by certain firms—such as withdrawing from climate coalitions, reducing ESG rhetoric, and altering proxy voting practices—the letters assert that further action is required. They outline a series of commitments requested from financial institutions seeking to do business with these states. These commitments include abandoning the practice of treating deterministic future outcomes, such as climate change, as a long-term risk factor to justify engagement and proxy voting actions.
The letters further state: “Climate change is a common example of this issue, where potential risks—often uncertain and already accounted for in insurance and financial markets—are framed as certain and catastrophic to justify forcing companies to take immediate actions that may not align with their long-term business interests.”
Additional requests in the letters urge firms to refrain from using passive investment vehicles for activist proxy voting or corporate engagement, avoid international political agendas like net zero mandates and natural capital frameworks, and ensure that voting decisions align with shareholder value rather than environmental or social goals imposed by activists. The letters also call for disclosure of participation in sustainable investment groups such as Climate Action 100+, GFANZ, or PRI.
The state officials concluded by stating: “We expect detailed evidence that your firm’s investment practices, proxy voting and corporate engagement behaviour (which should be minimal to begin with), and institutional affiliations align with traditional fiduciary standards, as widely understood as short as ten years ago, and comply with applicable state laws.”
Signatories to the letters include state officials from Alabama, Alaska, Arizona, Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana, Mississippi, Missouri, Nebraska, North Carolina, North Dakota, Oklahoma, South Carolina, Pennsylvania, Utah, West Virginia, and Wyoming. The addressed financial institutions include Amundi, BlackRock, BNY Mellon, Capital Group, Fidelity Investments, Franklin Templeton Investments, Geode Capital Management, Goldman Sachs, Invesco, JPMorgan Chase, Legal & General, Morgan Stanley, Northern Trust, Nuveen, State Street, T. Rowe Price, Vanguard, and Wellington Management.