Texas Attorney General Ken Paxton (R) sued Glass Lewis in Texas District Court for Collin County on July 29, 2026, alleging deceptive trade practices. Glass Lewis is a San Francisco-based proxy advisory firm that advises institutional investors how to vote at corporate shareholder meetings.
According to the complaint, the firm advises more than 1,300 investment managers whose clients collectively manage $40 trillion in assets across 100 markets. Glass Lewis representatives attend more than 30,000 shareholder meetings each year.
Paxton alleges Glass Lewis advertises its proxy voting advice as objective while actually weighing environmental, social, and governance (ESG) factors. Paxton said that Glass Lewis "provides advice influenced by its own Environmental, Social, and Governance ('ESG') ideological considerations, apart from its clients' best financial interests."
Paxton's complaint also says that Glass Lewis's proxy voting guidelines "call for every board to establish a ‘nominating and governance committee’ that is ‘reasonably diverse.'" Paxton argues this shows Glass Lewis pushes its own policy views rather than sticking to financial analysis.
The lawsuit extends a legal fight between Republican state officials and the two firms that dominate the proxy advisory market. Glass Lewis and Institutional Shareholder Services (ISS) together handle more than 90% of that market, giving them influence over how institutional investors vote at public companies.
This suit differs from the state disclosure-mandate laws that federal courts blocked in Kansas and Indiana in June 2026. Those laws required proxy advisors to disclose specific information and were struck down on First Amendment grounds. Paxton's suit instead relies on existing consumer protection law. Paxton alleges the firm is violating the Texas Deceptive Trade Practices Act, a state law amended in 2025 that requires disclosures for proxy voting advice based on non-financial factors, including ESG and diversity, equity, and inclusion (DEI) considerations.
Glass Lewis has denied the allegations, saying they “mischaracterizes Glass Lewis’ advice and business practices,” and that its recommendations “are grounded in decades of research on promoting long-term shareholder value.”
Paxton is the Republican nominee for U.S. Senate in Texas running against Democratic State Rep. James Talarico in the November 2026 election.
Ballotpedia tracks support for and opposition to the environmental, social, and corporate governance (ESG) investing movement. To learn more about arguments for, against, and about ESG, click here. For more information on reform proposals related to ESG policy, click here.
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