Nebraska Attorney General Sues Proxy Advisory Firm Over ESG and DEI Advice

Nebraska Attorney General Mike Hilgers filed a lawsuit against proxy advisory firm Institutional Shareholder Services on May 20, 2026. The complaint alleges that ISS provided investment advice shaped by environmental, social, and governance factors and diversity, equity, and inclusion policies rather than by clients' financial interests.

The suit states that ISS operates a parallel ESG consulting business while issuing research reports that recommend voting on corporate governance matters according to ESG principles. It claims this arrangement creates a conflict of interest similar to a health inspector selling cleaning services.

Proxy advisory firms research corporate governance issues and advise shareholders on how to vote on matters such as executive compensation and board elections. ISS and Glass Lewis together control approximately 97 percent of the market for this service, according to a related Florida lawsuit.

Nebraska's complaint accuses ISS of recommending votes against board members at companies lacking women directors and of grading firms on climate accountability and racial diversity policies without corresponding financial analysis.

Uthmeier filed a similar lawsuit against ISS and Glass Lewis in November 2025. That suit alleges violations of fiduciary duty and state antitrust laws. A coalition of 16 states, including Alaska, Alabama, Indiana, Iowa, Kansas, Kentucky, Missouri, Montana, South Carolina, South Dakota, Tennessee, Texas, Utah, and West Virginia, has formed to address proxy advisor practices.

"ISS sold Nebraska investors on the promise of objective, independent research. What they were actually getting was advocacy—coordinated with [environmental, social and governance (ESG)] activist organizations, untested against any financial standard, and driven by an ideological agenda that ISS never disclosed," Hilgers told the Daily Caller News Foundation.