State Street still using DEI to curry favor with leftist state officials — despite Wall Street clampdown
Woke investing has been under a tightening no‑go on Wall Street, yet if you listen to critics, big asset manager State Street is still riding that wave to win favor with progressive city officials who keep a huge swath of pension dollars under their thumb.
The New York Post has traced State Street’s deep‑level involvement in controversial “Diversity, Equity and Inclusion” (DEI) and green‑energy policies—working behind the scenes to push voter decisions on behalf of its large, public‐pension clients. This has sparked flurries both in the financial press and in Washington. The drama kicked off last month when New York City Comptroller Brad Lander moved to oust rival BlackRock as a manager of the city’s pension fund.
Alabama GOP senator Tommy Tuberville took to X to say State Street, which runs about $8 billion of Lander’s pension money, is “already caving to the WOKE Mamdani climate agenda before he has even taken office.” Lander, a key backer of the soon‑to‑be NYC mayor, Zohran Mamani, who champions DEI and green initiatives, is at the center of this tussle.
State Street argues that the backlash it faces is unfair—and it has data to back that up. The firm offers nearly a dozen proxy‑voting frameworks for pension funds, even one that caters to conservative officials who keep woke agendas off their radar. Instead of lobbying U.S. companies to adopt DEI or green‑energy mandates outright, State Street acts as a conduit: it arranges shareholder votes for progressive pension‑fund clients during the so‑called “proxy season,” when major investors decide on corporate governance matters.
Of course, controversy remains. Lander isn’t pulling the plug on BlackRock because of mismanagement; in fact, he’s upset that BlackRock, led by Larry Fink, has moved away from explicitly woke stances in recent years. After embracing ESG commitments, the firm no longer insists on strict carbon‑neutral pledges or race‑ and gender‑based board quotas.
State Street’s own “Sustainability Stewardship Service Proxy Voting and Engagement Policy” – which the Post examined – details how the firm will drive votes on a range of governance issues for its woke clients. Critics allege that some of these demands are legally shaky, from tracking deforestation targets to ensuring companies disclose human‑rights risks in their operations. Perhaps most contentious is the firm’s “Diversity” standards, which argue that effective board oversight hinges on gender diversity and, in certain markets, racial or ethnic representation.
Even as big players like JPMorgan and BlackRock dial back strict DEI requirements—especially after a Trump executive order aimed at curbing private‑sector DEI practices—State Street maintains it simply follows client requests. The firm says it never pushes DEI or sustainability battles to U.S. portfolio companies; rather, it supports both left‑leaning and conservative pension officials throughout the United States.
State Street’s spokesperson, Mark LaVoie, told the Post that the firm’s sustainability policy is optional for clients and fully compliant with U.S. law. He declined to comment on Tuberville’s tweets.
An insider from a rival money‑management firm added that State Street’s approach feels like imposing client‑driven mandates on the companies they invest in. In response, State Street has recently refined its policies to make it clear that it won’t bring hot‑button topics such as DEI or sustainability into discussions with U.S. portfolio companies.
Part of the reason for the new clarification is that State Street is a federal contractor and a primary target of Trump’s DEI‑ending executive orders. It manages a sizable slice of the Thrift Savings Plan, the $1 billion retirement fund for federal employees.
The White House offered no comment on State Street’s DEI activities.
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