theguardian.com
ESG Shareholder Proposals Hit Record Low Amid US Political Backlash
Shareholder support for environmental and social governance (ESG) proposals hit a record low of 1.4% in 2024, driven by a decline in the US where six major banks left a climate initiative and companies rolled back diversity policies amid political pressure; asset managers collectively backed only 7% of resolutions.
- What is the most significant impact of the record low support for ESG shareholder proposals in 2024?
- Shareholder support for ESG proposals plummeted to a record low of 1.4% in 2024, down from 21% in 2021. This decline is particularly sharp in the US, where political pressure and policy shifts have led six major banks to withdraw from the UN's net-zero banking alliance and several companies to roll back DEI initiatives.
- What regulatory or leadership changes are needed to overcome the obstacles to greater ESG integration in corporate decision-making?
- This trend suggests a significant challenge to integrating ESG considerations into corporate governance. The lack of support from major asset managers, combined with political opposition, signals a potential slowdown in environmental and social progress, potentially hindering efforts to mitigate climate change and improve worker conditions.
- How do differing political climates in the US and Europe contribute to the contrasting levels of support for ESG shareholder resolutions?
- The drop in support reflects a growing divide between US and European asset managers, with European firms supporting 81% of ESG proposals compared to 25% in the US. The four largest asset managers, collectively managing $23 trillion, supported only 7% of resolutions, indicating a lack of commitment to addressing ESG issues.
Cognitive Concepts
Framing Bias
The headline and introduction immediately highlight the record low support for shareholder proposals, setting a negative tone. The use of phrases like "worrying retreat" and "severe drop" further emphasizes the decline and implies a negative judgment. The sequencing of information, placing the negative statistics before any potential counterarguments, also influences the reader's perception.
Language Bias
The report uses language that leans towards a critical perspective. Words and phrases like "worrying retreat," "severe drop," and "overreaching" carry negative connotations. More neutral alternatives could be used, such as "decrease in support," "decline," and "lack of clear economic benefit." The repeated emphasis on the negative aspects of the situation could subtly influence the reader.
Bias by Omission
The report focuses heavily on the decline in support for shareholder proposals, particularly in the US, and the actions of major asset managers. However, it omits discussion of the arguments against these proposals, the potential negative consequences of mandating certain actions, or the perspectives of companies targeted by these resolutions. While acknowledging space constraints is important, the lack of counterarguments might leave the reader with a one-sided view.
False Dichotomy
The report presents a somewhat simplistic dichotomy between asset managers supporting ESG proposals and those who do not, without fully exploring the nuanced reasons behind investment decisions. It frames the lack of support as a "worrying retreat" without considering that investors might have legitimate concerns about the financial viability or effectiveness of certain proposals.
Sustainable Development Goals
The report highlights a record low in support for shareholder proposals tackling environmental and social risks, including climate change. This indicates a slowdown in climate action driven by the financial sector, as evidenced by the withdrawal of major US banks from the UN-sponsored net-zero banking alliance and the lack of support from major asset managers for climate-related shareholder resolutions. The quotes directly link the decreased support to a hindering of climate action and the devastating impacts of climate change already being felt globally.