Proponents have filed 600 shareholder resolutions this year, with up to 400 possibly going to votes. Meanwhile, the political and corporate attacks on shareholder rights reaches a fever pitch.

For those new to our proxy season alerts, over the next several weeks we will highlight a handful of upcoming environmental, social and sustainable governance (ESG) proxy votes at both well-known and lesser-known companies. This is not meant to be a comprehensive list of upcoming proxy votes – nor is it a solicitation of votes. Instead, our goal is to help educate shareholders about new resolutions and critical issues being raised by shareholders.

This week we start with the ongoing political attack over the use of ESG metrics in financial investment decisions. This issue overshadows all the shareholder resolutions going to a vote this year, so to help put this in context, we will hear from Michael Frerichs, Illinois State Treasurer and Danielle Fugere, President, As You Sow.

Our two topics this week include a new climate-related resolution from the New York City Comptroller’s Office that looks at the link between clean energy investments and climate transition plans. Climate change continues to be the largest area of concern for shareholder resolutions. Last year’s anti-ESG political pressure was one reason why large institutional investors and proxy advisors including BlackRock, Vanguard and Glass Lewis pulled back their support for these resolutions, although the mix of proposals also shifted. That has led to much speculation about what will happen this year.

One portent came quickly in the first climate resolution to be voted on this proxy season, asking Jack in the Box to adopt greenhouse gas reduction targets. The result was a 56.5% vote in favor of the resolution.

This week we also look at resolutions raising questions on one of the most controversial issues today – the battle over reproductive rights and reproductive health.

The Political Backlash Against Sustainable Investing and ESG

For several years, ESG reporting and sustainable investing have been quickly expanding, and large investors have added their voice to increase pressure for change, particularly on GHG emissions, political spending disclosure and promoting diversity. The investment world dodged the political buzzsaw of current American politics for a short time, but the backlash is now clearly visible.

The anti-ESG campaign is well-funded and multi-pronged. Three lawsuits aim at the SEC’s role to protect investors and require appropriate risk disclosure. The House Judiciary Committee has opened anti-trust investigations of 14 banks, proxy advisors, asset managers and non-profits. Last spring, 21 GOP state Attorneys General sent a letter warning major asset managers to vote against ESG initiatives. More than 145 anti-ESG bills are being considered in 27 states, and seven states have passed laws boycotting select banks and asset managers. But the attack seems more party-political than investor-based.

Expert Insight from:

Michael Frerichs, Illinois State Treasurer. Mir. Frerichs is the state’s Chief Investment and Banking Officer. His office manages approximately $56 billion, including state funds, college savings and retirement plans, and pooled money on behalf of local and state governments. He also serves as a Trustee on the Illinois State Board of Investment, which manages approximately $28 billion in pension assets on behalf of over 230,000 beneficiaries.

• Learn more: Sustainable Investing Is Just Common Sense. Don’t Believe The Demagogues

Danielle Fugere, President and Chief Legal Counsel, As You Sow
Ms. Fugere has spearheaded numerous shareholder advocacy and legal initiatives on sustainability, climate change, clean energy, and environmental health, among others. In 2023, TIME magazine named Danielle on the inaugural "TIME100 Climate" list, which recognizes the 100 most innovative leaders driving business climate action.

• Learn more: Prudent Climate Action by Shareholders is Legal and Necessary Despite Anti-ESG Rhetoric