Florida Attorney General Announces Investigation Into Proxy Advisors’ ESG and DEI Policies as Unfair Trade Practices or Antitrust Violations

On March 20, 2025, Florida Attorney General James Uthmeier announced an investigation into whether two leading proxy advisors’ advice involving the consideration of Environmental, Social, and Governance (ESG) and Diversity, Equity, and Inclusion (DEI) constitutes deceptive or unfair trade practices under Florida law or a violation of Florida antitrust law.

Proxy advisors advise investment advisers and institutional investors on their voting determinations in proxy votes, i.e., matters presented for shareholder vote or authorization. Proxy advisers provide research, analysis, and recommendations regarding such determinations, and investment advisers and institutional investors often retain proxy advisors both to assist them in making their voting determinations on behalf of their own clients and to handle procedural, logistical, and other aspects of the voting process.

The Florida Attorney General’s announcement explains that his office will investigate ESG and DEI investing policies among two leading proxy advisors to determine if they colluded in adopting or enforcing such policies, and whether these actions violate Florida’s Deceptive and Unfair Trade Practices Act or the Florida Antitrust Act of 1980. The announcement comes just over a month after the Attorney General filed a class action lawsuit against a major retail corporation, on behalf of the State Board of Administration of Florida, for allegedly misleading and defrauding investors by “concealing the financial risks” of “LGBTQ activism.” The action is currently pending in federal court in Florida.

The theories that ESG or DEI policies violate antitrust, consumer protection, or unfair trade practices laws has become an increasing partisan controversy and focus of the anti-ESG and anti-DEI “backlash” movements. Numerous state attorneys general and the Judiciary Committee of the U.S. House of Representatives have subpoenaed asset managers and investment managers and threatened lawsuits under such theories, while other state attorneys general have stated such policies to be lawful and the minority members of the Judiciary Committee have dismissed these claims against ESG and DEI as political. In 2023, Tennessee Attorney General Jonathan Skrmetti sued a major asset manager for its ESG policies under Tennessee consumer protection law, and in a November 2024 multistate lawsuit, Texas and (now) twelve other state attorneys general sued three leading asset managers in federal court alleging violations of federal antitrust law and several states’ antitrust and consumer protection laws. Those asset managers’ motions to dismiss the claims, filed March 17, are pending. Meanwhile, Chair Andrew Ferguson of the Federal Trade Commission has stated “Fighting Wokeness” by investigating collusive ESG and DEI policies is an enforcement priority.

State attorneys general have been particularly active in addressing ESG and DEI through enforcement and litigation efforts. In addition to the action by the Florida Attorney General and the multistate action led by Texas Attorney General Paxton, earlier this year, Missouri Attorney General Andrew Bailey sued Starbucks for allegedly violating federal and state laws prohibiting race discrimination. The lawsuit asserts that Starbucks “enforces race-and-sex-based hiring practices, unlawfully segregates employees, and provides exclusive training and employment benefits to select groups in violation of anti-discrimination laws.” The action is pending in federal court in Missouri.

Claims such as Florida’s are emerging as a widening of ESG and DEI opponents’ legal strategy, notably targeting defendants other than asset managers and net-zero alliances and involving state consumer protection laws that often require specialized expertise to defend. Numerous states have added such claims in the Texas lawsuit, and, in March, a federal court ruled for the first time that consideration of ESG factors may violate fiduciary duties under the Employee Retirement Income Security Act.

Florida has yet to articulate a theory by which the proxy advisors under investigation may have violated the law, but its announcement notes their very high shares of the proxy advising market and suggests a view that the consideration of ESG and DEI factors is inherently inconsistent with shareholders’ economic interests.

Crowell’s State AG and Antitrust lawyers are tracking these State AG-related developments closely and are prepared to assist in navigating the growing and evolving ESG and DEI landscape.