A group of Republican state Attorneys General have published an open letter to more than 50 of the largest US asset managers warning them of ESG investment risks.
According to ESG Today, 21 of the AGs added their names to the letter, which warned asset managers of potential violations stemming from their investment activities and participation in climate-focused alliances.
The letter was led by the AGs of Louisiana, Utah and Montana and highlighted a broad range of concerns by the AGs, including the consistency of the asset managers’ commitments to climate-focused alliances with their fiduciary duties to clients.
Furthermore, the letter warned about misrepresentations in advertising, with AGs arguing that asset managers that have committed all AUM to environmental goals should label all funds as ESG funds.
The letter added, “Investors looking for low cost, passive indexing investments may be unwittingly funding your ESG activism. Any misrepresentations regarding the funds you are offering is legally troubling.”
For those funds labelled as ESG funds, the AGs state that many asset managers ‘have not adequately explained to investors the downsides and risks’ adding that many of the environmental assumptions made ‘appear to be dubious’.
Earlier this year, Florida governor Ron DeSantis barred fund managers for state and local entities in the state from considering ESG factors in investment decisions.
To date, DeSantis has been one of the most vocal anti-ESG advocates. Last year, he barred fund managers for state pension funds from incorporating ESG factors in the investment process.
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