Five states — Tennessee, Oklahoma, Indiana, Kentucky, and Kansas — enacted proxy advisor disclosure laws during the 2026 legislative sessions, making proxy advisor regulation the most common ESG-related policy approach enacted this year. Kentucky and Kansas enacted their laws after Republican-controlled legislatures overrode vetoes from Democratic governors.
Proxy advisory firms, including Institutional Shareholder Services (ISS) and Glass Lewis, analyze shareholder proposals and provide voting recommendations to institutional investors, such as pension funds and asset managers. Several Republican-led state governments adopted new disclosure requirements intended to inform investors when recommendations rely on ESG or other nonfinancial considerations rather than financial analysis.
Tennessee's HB 2476 requires a proxy advisory firm providing advice to public pension plans to "provide a financial analysis supporting every recommendation that the proxy advisory firm makes to the pension plan on a shareholder proposal that differs from the company management's recommendation."
