In May 2023, the National Association of Manufacturers (NAM) successfully filed a motion to intervene in a federal case brought by the anti-ESG group the National Center for Public Policy Research (NCPPR) against the Securities and Exchange Commission (SEC), challenging a shareholder resolution No Action determination. The NAM motion opened a broader challenge to the SEC’s authority to provide guidance regarding whether shareholder resolutions could be allowed on a company’s proxy for a vote, claiming that this process violates principles of corporate First Amendment rights enshrined in the Citizens United ruling.
Read morePrudent Climate Action by Shareholders is Legal and Necessary Despite Anti-ESG Rhetoric
Over the past decade, the investor community has worked with hundreds of companies, regulators and investment organizations to address climate change. Why? Because cutting emissions is a prudent and effective business management strategy that reduces a host of risks
Read moreSmall Cap Companies have a role to play on Climate
In the United States alone, 23 different billion-dollar weather and climate disasters occurred, incurring more than $90 billion in damages in just the first eight months of the year. With these impacts cascading through corporate value chains, the business case for action on climate risk has never been clearer.
Read moreCorporate State Lobbying Remains a Black Hole
Good Corporate Governance Requires Active Board Monitoring of ESG Risks
In today’s marketplace, companies are under increasing scrutiny regarding their public impacts—and their governance of these matters. This has serious material implications for all stakeholders.
Read moreESG Triggers the Right
Republican politicians are placing ESG on the list of grievances and conspiracies they serve up to their base as they try to turn ESG into the next critical race theory (CRT). One activist who was instrumental in convincing the Republican base that CRT is an ominous threat to their existence is heavily involved in the anti-ESG effort.
Read moreWar on ESG Highlights the Need for Lobbying Disclosure
For 2023, proponents have filed at least 30 proposals asking for lobbying disclosure reports that include federal and state lobbying amounts, payments to trade associations and 501(c)(4) social welfare groups used for lobbying, and payments to tax-exempt organizations that write and endorse model legislation.
Read moreThe Path to a Peaceful Settlement in the ESG Culture Wars
It is healthy to have a debate about ESG: What it is, and what it isn’t; what it can’t do, what it can do, and what it was never meant to do. The term has probably run its full life cycle, and it is time to address the underlying issues of what is being debated.
Read moreESG Data Helps Assess Value, Potential Returns and Manage Investment Risk
Institutional investors have been paying attention to environmental, social and governance risk factors long before it was “ESG.” Without fanfare or agenda, these long-term investors took notice of weak governance practices that led to corruption, friction with workforces that led to strikes and factories that spewed toxins into rivers leading to lawsuits from those who lived downstream.
Read moreRepublican Efforts to Limit ESG Investing are Anti-Capitalist
There is a cohort of elected officials in the United States presently engaged in an anti-capitalist crusade against free-market principles. No, they are not socialists. They are congressional Republicans, and they are attempting to prevent financial institutions from allocating capital in accordance with investor preferences and risk management principles. This attempted crackdown is purely ideological in nature — it is an exercise in political pressure to force a gross government overreach into U.S. capital markets.
Read moreThe Anti-ESG Shareholder Proponents
Shareholder proponents who oppose most of the ideas supported by ESG investors have been around for a long time, but in the last two years they have filed many more proposals and a few new players have emerged.
Read moreMcDonald's Breaks Animal Welfare Pledge - Now Faces Board Battle
On February 20, 2022, McDonald’s confirmed that Carl Icahn nominated both Maisie Ganzler and me for the company’s board of directors in response to McDonald’s failure to meet a public pledge it made ten years ago to end the egregiously cruel and controversial practice of pig gestation crates by this year.
Read more2022 Proxy Legal Overview: ESG Proposals in Ascendance
The 2022 proxy season reflects the ascendance of support for ESG shareholder proposals, along with policy changes at the SEC that both support and undermine these proposals.
Read moreA New Investment Theory for Dealing with Systemic Risks
The definition of what it means to invest is changing. Today, investors are looking beyond their trading terminals and tackling investing risks in the real world, where value is created, as well as in the capital markets, where it is priced.
Read moreCost Externalization: A Bad Trade for Diversified Shareholders
The Shareholder Commons has filed or otherwise supported 19 shareholder proposals in 2022 that focus on systematic risks, including mis/disinformation, climate change, and antimicrobial resistance. The common thread running through these proposals is how a company’s externalized costs affect shareholders by reducing the value of other assets in their portfolios.
Read moreHow to Make ESG Pay Links More Effective
Shareholder resolutions requesting companies disclose plans to achieve net zero emissions by 2050 received increased support in the 2021 proxy season. While this is a positive development, companies must do more to cut emissions in half by 2030 to meet the Paris climate treaty goals. The way to make this work is to have a direct link to executive compensation packages. If the board sets a real financial incentive then executives will make it happen.
Read moreNet Zero Asset Managers Initiative: Transparency and Accountability on Climate
In July 2021, ClearBridge Investments announced it had joined the industry-leading Net Zero Asset Managers Initiative (NZAM), an international group of asset managers committed to supporting the goal of achieving net-zero greenhouse gas emissions globally by 2050. We are proud to be part of a community of over 200 asset management peers, representing over $50 trillion, in this commitment.
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