August 17, 2022

Anti-ESG: ’22 Shareholder Proposals Fell Flat

Out of this year’s 797 shareholder proposals, 43 were submitted by so-called “anti-ESG” proponents who are trying to push for things like “non-discrimination audits” and reports on the impact of DEI initiatives on groups that do not have a history of under-representation. That’s according to this Morningstar article, which also says that these proposals averaged only 7% support this year. Only 4 received support of 20% or more, and none passed.

Emily flagged this emerging issue back in March. Because the actions for which these proposals advocate often twist what investors are trying to support through voting policies, it’s forcing stewardship teams to read resolutions & supporting statements even more carefully. For that reason, companies may want to give more context in the proxy statement by including the proponent’s identity, as John noted more recently.

Morningstar says that the anti-ESG proposals primarily have been submitted by the National Legal and Policy Center, the National Center for Public Policy Research, and Steven J. Milloy. The article gives a full breakdown of who received the proposals, what topics they covered, and the level of support they received.

It’s likely that these proponents will keep at it next year – and they may get savvier. Sometimes, the resolutions and supporting statements do actually match what “mainstream” investors tend to support and, as has always been the case, are just a way for the proponent to speak their mind at the meeting. The part that’s harder to swallow is that many of the proposals appear to be motivated more by gamesmanship, attention-seeking and calling out “Corporate America” than by a sincere view that the requested action promotes business success.

Liz Dunshee