Between January and May 2024, anti-ESG shareholder proposals attacking carbon reduction and corporate social responsibility policies increased by 133% compared to 2022 and 900% compared to 2020, according to new data from ISS-Corporate, a leading proxy research firm for institutional investors. Despite the stark increase – mostly driven by the Exxon-backed National Center for Public Policy Research (NCPPR) – all measures failed to pass a majority vote, with the most successful proposal reaching just 7% shareholder support. The architects of the proposals have largely argued that ESG initiatives expose companies to public relations crises.
The uptick in extremist shareholder proposals are part of a broader campaign across the private and public sectors against ESG, led by well-funded advocacy groups and billionaires at the helm of Big Oil.
- NCPPR is one such organization and is responsible for nearly all of the 70 anti-ESG proposals put forward through the end of May this year.
- NCPPR receives significant funding from ExxonMobil – which is currently suing its own shareholders for introducing proposals aimed at holding the company accountable for its emissions. A federal judge in Texas just dismissed the frivolous lawsuit on Monday.
- In 2014, NCPPR published a report claiming that “the world isn’t warming” and currently employs Steve Milloy, a former coal executive who has been described as “the nation’s most influential climate science contrarian” and “has a long history of working on behalf of industry-led scientific misinformation campaigns.”
Despite shaky threats, executives at Fortune 500 companies and investors are moving forward with ESG policies and responsible investing – and Americans overwhelmingly back them.
- More than half of Fortune 500 CEOs say that focusing on climate change will “open up new markets” and nearly 60% of CEOs reported that by focusing on climate change they expect to “open up new markets.”
- Research continues to show that sustainable funds have comparable, if not better, financial returns to traditional funds with less downside risk, with nearly 80% of impact investors reporting that their financial performance meets or exceeds their targets.
- Companies with good ESG scores also tend to have higher returns. Studies show that, similar to global findings, “the relative performance by top-rated ESG companies was nearly 50% stronger than their lower-rated counterparts.”
- Most Americans support DEI-focused policies in their workplaces and factors like board gender diversity have been shown to improve returns for investors.
- Research has consistently shown that attacks on responsible investing endanger the financial well-being of everyday Americans, especially in the form of higher taxes and lower returns on retirement savings.
- Despite divisive rhetoric from these extreme investors, ESG is not a partisan issue. Americans overwhelmingly and across party lines support standardized climate risk disclosures and responsible investing more broadly.
