Morningstar’s assessment of the anti-ESG shareholder proposals filed by the National Legal and Policy Center has produced a whiny non-rebuttal, by the non-profit described by SourceWatch as “a front group and industry funded right-wing political and policy lobbying organization. NLPC was founded in 1991 by Peter Flaherty and Ken Boehm, who previously worked for ‘Citizens for Reagan.'” SourceWatch notes that NLPC’s predominate sources of funding are the ultra-right, ultra -anti regulation Scaife Foundations.
This year also saw the rise of what we have been calling anti-ESG shareholder proposals. These proposals use various tactics to get on the ballot, many of which obfuscate the real intent behind them, and are usually submitted by groups that oppose the work of “pro-ESG” investors.
The anti-ESG movement has gotten a lot of attention this past year, particularly from prominent U.S. politicians. Some examples include former U.S. Vice President Mike Pence’s op-ed in The Wall Street Journal, Florida Gov. Ron DeSantis’ ESG financial fraud initiative, and Gov. Greg Abbott’s anti-ESG bill in Texas …Morningstar’s proxy database has tracked 43 anti-ESG proposals filed by the National Legal and Policy Center, the National Center for Public Policy Research, and Steven J. Milloy during the 2022 proxy season. In the six months from January to June, proposals filed by these groups received only 7% support on average, and only 12 received over 5% support. In contrast, resolutions filed by other shareholders achieved an average of over 30% support across the board.
In other words, the anti-ESG proposals, like wolves in sheep’s clothing, copied language from legitimate ESG proposals to achieve the opposite purpose. That is why they are called anti-ESG. Some were filed by Steven J. Milloy without disclosing his connections to the fossil fuel industry and various anti-science groups.
They did not fool anyone who was paying attention. Their look-alike proposals got less than a third of the level of support of the legitimate ESG proposals.
But NLPC’s feelings are hurt at being called anti-ESG. Who could think that? Why, according to their rebuttal, even the SEC said, “Many of the [NLPC] proposals found language and phrasing that the Securities and Exchange Commission finds acceptable by copying earlier approved pro-ESG proposals.” Yep. That’s the part that’s the sheepskin hiding the wolf. How, they ask, with faux innocence, could anyone doubt their good intentions for increased transparency?
Answer: because we can read. It’s what they actually propose that reveals the wolf spirit behind these proposals, which are designed to be close enough to legitimate ESG proposals to crowd them off the proxy (harder to do following the SEC’s recent reforms) and to give corporations cover for ignoring ESG goals or falsely claiming to have met them.
Morningstar quotes one analyst: “So, we’re seeing that these so-called ‘anti-woke’ proposals—such as those requesting reporting on the impact of corporate DEI initiatives on groups with no history of socioeconomic exclusion—are getting almost no traction with voting shareholders.”
NPLC concludes: “Ruth Saldanha and Morningstar hoped we would be demoralized by the failure of our resolutions to pass, and I’m sure they wish we would just go away,” Chesser said. “But we are just getting started. See you next year!”
Bring it on. We’re not going anywhere.
ValueEdge Advisors 