Proxy advisory firm Institutional Shareholder Services (ISS) is facing a series of new lawsuits filed […]
Back to Climate News
ESG Today
Four States Launch Lawsuits Against Proxy Advisor ISS Over ESG Policies
Abatify Summary
Nature & Climate Perspective
**The litigation against ISS threatens to chill corporate backing for voluntary conservation initiatives by branding biodiversity and carbon-sequestration goals as potential breaches of fiduciary duty. **
- State-level legal action discourages corporate investment in Nature-Based Solutions (NBS) and LULUCF projects due to fear of regulatory backlash.
- Chilling effects on ESG voting policies could reduce capital allocation toward long-term ecological restoration and blue carbon frameworks.
- Fragmented corporate environmental policies delay large-scale, multi-decade biodiversity preservation initiatives due to perceived legal risks.
Market & Policy Outlook
**This legal challenge intensifies systemic friction between state fiduciary regulations and global climate disclosure standards like SBTi, complicating corporate decarbonization strategies. **
- The lawsuits challenge the integration of Scope 3 emissions targets into proxy voting guidelines, directly threatening corporate alignment with international standards.
- This state-level pushback contrasts with the ICVCM's Core Carbon Principles (CCPs), as US firms face conflicting mandates between state-enforced fiduciary definitions and high-integrity carbon market participation.
- Corporate compliance pathways, including SBTi commitments and I-REC sourcing, face legal scrutiny under the guise of anti-trust or breach of fiduciary duty arguments.
This story moves you. Here's what you can do.
Related Resources
Sourcing:
Contact our trading desk for customized environmental commodities for your needs
Request sourcing: Article 6.2 (ITMOs)