Last year, anti-ESG proposals attracted support of less than 4 percent on average, according to the Proxy Preview report, published last week.
Many were also excluded through the US Securities and Exchange Commission’s “no action” process, the mechanism by which companies seek assurance from the regulator that it will not act if they do not allow shareholders to vote on it at their next annual meeting. For instance, six proposals put forward by US conservative think tank the National Centre for Public Policy Research (NCPPR) were excluded in 2022.
At least nine NCPRR proposals have fallen foul of the “no action” process this proxy season, with the majority being excluded over procedural errors. Others were omitted because they were deemed to breach the SEC’s ‘ordinarybusiness’ rule, meaning they delve too deeply into matters relating to the day-to-day running of the company. Among the proposals excluded on the grounds of Ordinary Business was one at JPMorgan Chase asking the financial heavyweight to report on any practices that “prioritise non-pecuniary factors when it comes to establishing, rejecting, or failing to continue client relationships”.
JPMorgan Chase, the NCPPR wrote, “has a history of cancelling the accounts of those who hold opinions and political views that deviate from hard-left political orthodoxy”. Its proposal at Bank of America, seeking a “congruency report” into the bank’s partnership with “globalist organisations”, failed because it did not meet the SEC filing requirements. That proposal raised concerns with the bank’s links with groups with “radical agendas” such as the Business Roundtable, the influential association of US CEOs, and the World Economic Forum (WEF).‘Anti-ESG proposals’ up 60 percent this year, despite low support in 2022
In an RI interview, NCPPR’s Scott Shepard admitted that the proposals had two purposes. One is blocking “left-of-center” proposals by submitting their own proposals on the same subject. The other is to give notice to boards “so that when lawsuits come later,” they cannot deny that they were aware of the issue. He also said that “The only way we’re anti-ESG is if ESG only means left-wing goals, and he companies and activists who are calling us anti-ESG, every time they do it, what they illustrate is that they’re not acting with regard to risk, or legality, or anything.”
Sourcewatch notes that NCPPR has ties to ALEC, got in trouble for diverting charitable contributions from indigenous peoples tribes collected by disgraced lobbyist Jack Abramoff and sued Starbucks and NASDAQ over their DEI policies, calling them racist. They claim their “Free Enterprise Project is the nation’s leading program for confronting liberal shareholder activism.” (We note that shareholders’ oversight is an essential element of free enterprise capitalism.) One of their top funders is Donors Trust, the “right-wing ATM” with the Kochs as key contributors.