Republican AGs Warn Financial Institutions that DEI and ESG Policies May Risk Enforcement Action

Cozen O'Connor
Contact
LinkedIn
Facebook
X
Send
Embed

Cozen O'Connor

  • A group of 11 Republican AGs announced that they have sent letters to multiple financial institutions (collectively, “Financial Institutions”) warning that the companies’ diversity, equity, and inclusion (DEI) and environmental, social, and governance (ESG) commitments may violate state and federal laws and risk enforcement action.
  • The letter states that the Financial Institutions appear to be implementing policies and practices that include race- and sex-based quotas, as well as business and investment decisions driven by political agendas rather than the goal of maximizing shareholder and asset value.  The AGs further argue that these policies—such as employment, board, and supplier quotas, and managing client assets to advance race- and sex-based objectives or satisfy climate commitments rather than maximizing financial returns— violate the companies’ fiduciary duties and must be discontinued.
  • The letter demands that the Financial Institutions respond within 45 days to a series of questions, noting that these responses, along with employee interviews, will determine whether enforcement actions will be pursued.
  • Other letters from AGs regarding corporate diversity initiatives include one sent by Republican AGs to a major retailer urging the repeal of its DEI policies and another issued by 13 Democratic AGs to Walmart’s President and CEO, expressing concern over the company’s announcement that it will end certain aspects of its DEI initiatives. Additionally, both Democratic and Republican AGs have sent opposing letters to Fortune 100 companies regarding their DEI efforts in light of the Supreme Court’s decision in Students for Fair Admissions v. Harvard.
Send Print Report

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations. Attorney Advertising.

© Cozen O'Connor

Written by:

Cozen O'Connor
Cozen O'Connor
Contact
more
less

PUBLISH YOUR CONTENT ON JD SUPRA NOW

  • Increased visibility
  • Actionable analytics
  • Ongoing guidance

Cozen O'Connor on:

Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign Up Log in
*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
- hide
- hide