Glass Lewis & ISS File Lawsuits Against Texas Over ESG & DEI Proxy Advisory Restrictions

Glass Lewis and ISS have sued Texas in federal court, challenging a new law that limits their proxy advice on diversity, equity, inclusion (DEI), and environmental, social, and governance (ESG) issues.

The law, signed by Governor Greg Abbott in June, requires proxy advisers to disclose when advice is not purely financial and support it with financial analysis. The lawsuits argue that the law violates the First Amendment by compelling speech aligned with the state’s views. Attorney General Ken Paxton is named as the sole defendant. The law is set to take effect on September 1, 2025. Glass Lewis and Institutional Shareholder Services Inc. (ISS) said the measure could harm their business and clients by forcing disclaimers that misrepresent their advice.