Shareholder Activism Threatens DEI Initiatives In The Anti-Woke Uprising

By Nina Atimah

  • Anti-woke shareholder activism has been gaining momentum over the past year with 57 anti-ESG proposals being submitted in 2023 up from 7 in 2020
  • Although these groups are gaining traction, actual success remains limited, with most anti-ESG proposals receiving less than 2% of shareholder votes

Multiple conservative groups across the country are filing proposals to challenge environmental, social, and governance (ESG) initiatives. That includes Diversity Initiatives, hard fought to get established in the first place. The main argument put forth by anti-woke activists is to return the focus to what really matters – the financials, the profit, the green. They also claim to be taking on the politics and partisan influence in these companies. The most prominent player in the anti-ESG movement is the National Center for Public Policy Research; filing 57 anti-ESG proposals in 2023 alone.

Why This Matters:  Shareholders activists are leveraging their financial influence to push back against what they perceive as the politicization of business and the embrace of left-leaning social causes. The recurring themes underpinning these proposals are as diverse as they are contentious. A staggering two-thirds challenge corporate efforts to foster racial and ethnic diversity, asserting that such DEI programs discriminate against conservative White individuals. However, as these proposals continue to gain traction, their success rate is extremely low standing at 2%. According to a Diligent Market Intelligence report, average support for U.S. ES proposals dropped from 27.7% in 2022 to 19.6% in 2023.

It would be easy enough to dismiss these early efforts, but while the trend has not gained significant traction yet, persistence could potentially impact employees, investors and shareholders. If successful, these proposals could lead to the scaling back or elimination of equity and inclusion initiatives, as well as environmental and social responsibility programs. Lack of diverse representation could hinder innovation and harm organizational culture while companies may continue to face pressure to scale back both diversity and sustainability commitments.

In the wake of all these setbacks with added to current macro and geopolitical challenges, the Global ESG market with assets is predicted to touch the $40 Trillion mark by 2030. A study found that a majority of investors 85% support ESG leading to better returns and more resilient portfolios. It just goes to show that while there may be dissenting voices, the broader investor community perceives ESG considerations as beneficial.

What’s Next: While most anti-ESG proposals currently receive low shareholder support, their persistence warrants ongoing vigilance. There is a growing consensus on the need for increased transparency and accountability from corporations. Even though the proposals haven’t seen the light of day, these issues are being magnified. Stakeholders, including shareholders, employees, and the broader public will continue to demand clear and consistent communication around a company’s values, priorities, and the rationale behind its decisions. Advocacy groups may need to mobilize to protect DEI and sustainability gains.

CBX Vibe:Baby Don’t Change Your Mind” Gladys Knight & The Pips

Welcome to CultureBanx, where we bring you fresh business news curated for hip hop culture!