Andrew Behar, CEO of As You Sow, discusses the surge of lawsuits against shareholder activism and the pushback faced. Topics include Exxon lawsuit, challenges in transitioning to sustainable energy, and strategies to counter anti-ESG actions.
Shareholder activism is a crucial aspect of protecting protest and fundamental rights in the ESG landscape.
Anti-ESG campaigns aim to restrict shareholder resolutions focusing on social justice and environmental concerns, hindering progress towards responsible corporate practices.
Deep dives
ESG Investing and Shareholder Activism
ESG investing, standing for environmental, social, and governance, evaluates company risks beyond financial performance. Environmental risks to supply chains and diversity in workforces are key considerations. A backlash against ESG has emerged recently due to increased shareholder activism and Securities and Exchange Commission (SEC) initiatives for consistent climate risk reporting. Scope 3 emissions, representing emissions across supply chains, became contentious for many companies, sparking resistance.
Shift to Shareholder Capitalism and Anti-ESG Movement
In 2019, companies shifted from a focus on short-term profit maximization to stakeholder capitalism, considering wider impacts. This change triggered resistance against shareholder activism and ESG initiatives. Figures like Leonard Leo orchestrate anti-ESG campaigns, aiming to restrict shareholder resolutions focusing on social justice and environmental concerns. Lawsuits aim to limit shareholder rights and hinder corporations from addressing risks beyond profit.
Challenges and Advocacy Against Anti-ESG Movements
States like South Dakota rejected anti-ESG bills due to potential economic harm. Initiatives like the Haggerty bill seek to hinder shareholder rights by penalizing diverse workplaces. Notable figures like Edward Blum drive legal challenges against ESG actions, aiming to undermine diversity and inclusion efforts. Efforts like the ASU So Foundation's shareholder resolutions challenge anti-ESG movements and advocate for responsible corporate practices.
Market Forces and Path Forward for Responsible Investing
Responsible investing aligns with long-term success, prompting stakeholder activism for better corporate practices. Initiatives like pass-through voting empower individuals to vote in line with ESG goals. As the anti-ESG movement faces pushback, progress in fostering sustainable investing continues. Advocacy for shareholder rights and corporate accountability contributes to a transformative shift towards stakeholder-focused business models.
The backlash against ESG is continuing, with a string of lawsuits aimed at shutting down shareholder activism. We don't often talk about shareholder activism in the vein of protecting protest, but it's absolutely part of the story. Andrew Behar, CEO of shareholder advocacy group As You Sow, joins us to explain what's going on, and why anyone who cares about basic rights needs to be tuning into the ESG fight.