We start with one of the hottest issues in the financial community – the role of environmental, social and governance (ESG) factors in the investment process. Investors have considered ESG shareholder proposals for decades and ESG considerations are now routine in the financial world because companies and investors understand that environment and society affect financial results.  On the other hand, today’s deeply partisan divide is driving an influx of many more proposals from proponents who believe the business world has lost its way and ESG hurts business and investors.

Three Democratic Senators help introduce this topic, and then we take a look at the anti-ESG proponents.

For this week’s votes we highlight two issues under the radar where shareholders don’t often have a chance to vote: animal welfare and animal testing in particular; and the link between plastics and oil.

Anti-ESG Proponents

Shareholder proponents have raised corporate and general investor awareness of how ESG issues affect financial performance, and how companies affect society and the natural world. Proposals from anti-ESG groups are not new, but starting last year many more have flooded onto proxy statements, reflecting the current “culture wars.”  Support for these proposals has always been low, averaging in the single digits.  To pick up traction, some anti-ESG groups use a ‘Trojan Horse’ strategy to mimic pro-ESG resolutions.  The expanded slate of anti-ESG activity appears to be funded from far-right political organizations.  However, a whisper of bipartisanship might come from proposals about ties to China, where all sides are concerned about repression.

• Learn more: Republican Efforts to Limit ESG Investing are Anti-Capitalist

• Learn more: The Anti-ESG Shareholder Proponents

Animal Welfare

Animal welfare resolutions rarely receive the support earned by other ESG resolutions, but they nonetheless have helped prompt a lot of corporate action.  This year, resolutions at Charles River Laboratories and Laboratory Corporation of America ask about the number, species and origin for imported nonhuman primates.  Proponents believe many are endangered species and that the U.S. animal testing market is a major driver pushing these primates to extinction, but they also raise concerns about primates as disease vectors. A different animal testing resolution at Ford Motor asks for an annual report on the number and species of animals used and/or euthanized in car crash studies.

• Vote due date: Charles River Laboratories, May 8; Laboratory Corporation of America, May 10; Ford Motor, May 10

• Learn more: Illegally Captured Primates Used in Animal Testing Pose Health and Investor Risks

Petrochemicals and the Plastic Pollution Crisis

Many people are surprised to learn of links between oil and gas companies and the plastics industry. Petrochemicals are used to make plastic resin and companies such as ExxonMobil, Chevron, Phillips 66 and chemical company Westlake are expanding operations.  They project that plastics and other petrochemical outputs will overtake the transport sector as the largest driver for future oil and gas demand. Proponents believe these plans disregard growing international efforts to combat the plastic pollution crisis; they think large investments now will produce stranded assets as well as unacceptable harm to the environment.   The proposals ask for audited reports on the demand for virgin plastics and how a reduction would impact companies’ financial assumptions.

• Vote due date: Phillips 66, May 9; Westlake, May 10, ExxonMobil, May 30

• Learn more: Petrochemical Companies' Unsustainable Production Policies Drive Plastic Pollution Crisis