Shareholders have gotten better at getting anti-ESG proposals into company proxy statements for a vote but they remain widely unpopular, two analyses of the 2024 proxy season show.

Between January 1 and June 30, shareholders filed 108 proposals that in some way reject environmental, social and governance goals in the boardroom, an analysis by The Conference Board and ESGAUGE shows.

Just under 90 of the proposals made it onto the proxy statement for a vote, but none of them passed, each receiving on average fewer than 2% of the vote. 

The poor performance shouldn’t obscure the broader success of anti-ESG interests in getting their proposals onto the proxy statement, says Heidi Welsh, executive director of the Sustainable Investments Institute, in an analysis she published in the Harvard Law School Forum on Corporate Governance.

“Proponents have gotten more proficient with the filing process … and fewer are getting omitted after challenge under SEC rules — on both procedural and substantive grounds,” she said. 

Under Securities and Exchange Commission rules, companies that don’t have adequate justification for keeping shareholder proposals off their proxy statement could face legal action by the agency. To help companies avoid that possibility, the SEC has a process through which they can check with the agency first and get a non-binding staff opinion about keeping the proposal off the ballot. 

Almost all of the anti-ESG proposals originated from a handful of organizations, including the National Center for Public Policy Research and the National Legal and Policy Center, which together accounted for three-quarters of the proposals, Welsh’s analysis shows. NCPPR says its mission is to push corporate leadership to the right. NLPC is focused on small government.  

As in previous years, most anti-ESG proposals target diversity initiatives, with almost half of the proposals in one way or another trying to discourage them. 

“These resolutions … explicitly posit that straight white men with right-wing political and/or religious viewpoints face disadvantages in corporate America,” Welsh says.  

Corporate political engagement is another big area. Sixty-five proposals relating to political giving or other types of engagement made it to a vote, up from 56 in 2023, according to The Conference Board. 

Supporters say “companies are abrogating their fiduciary responsibility to investors” by putting ideology over company profitability, Welsh says in her analysis.  

Of the almost 90 proposals that made it to a vote, four passed the 5%-support threshold that would allow them to be resubmitted for another vote in the future. Three of the four were originated by NCPPR and call for a report on the risks to Boeing from its anti-discrimination policies, with 5.3% of shareholders voting support; a board committee to look at the impact of its political advocacy agenda on Kohl’s, which received 5.7% support, and a report on the risks to United Parcel Service from its carbon reduction goals, with 8.1% support.

In the fourth, originated by Eichhold Trust, the proposal calls for a report on Kroger’s charitable contributions. It generated 6% support. 

A decade ago, only 20% of anti-ESG proposals made it to a vote. With this year seeing almost 90 of them reaching that point, fielding these proposals is likely to consume more corporate leadership resources, the two analyses suggest.