Third Legal Win for ISS, Glass Lewis: Federal Judge Blocks Indiana Anti-ESG Law

Key Facts

1A federal judge granted a preliminary injunction blocking an Indiana law requiring new disclosures from proxy advisers.

2This marks the third legal victory for Institutional Shareholder Services and Glass Lewis against restrictions backed by Republicans.

Amid an escalating political battle over ESG criteria in US financial markets, this ruling represents a significant win for proxy adviser autonomy. A federal judge granted a preliminary injunction blocking an Indiana law that mandated new disclosures from proxy advisers, marking the third legal victory for Institutional Shareholder Services (ISS) and Glass Lewis against Republican-backed restrictions, according to a Reuters report.

This decision follows previous court rulings in Oklahoma and Texas that struck down similar restrictions, relying on First Amendment free speech protections. Observers note that these victories could set a precedent deterring future legislation in other states targeting proxy advisers' role in ESG matters, particularly as Republican pressure on pension funds and asset managers intensifies.

While the ruling is not tied to a specific financial instrument, its impact ripples across stocks of companies embracing ESG standards. With no directly related economic events on the near-term calendar, attention turns to pending cases in other states, where similar rulings could bolster confidence in the ESG advisory sector. This development is viewed positively for firms benefiting from clarity on environmental and social criteria in investment decisions.