A recently released report has determined that investor support for environmental, social and governance (ESG) proposals is declining, especially in America. These proposals are usually introduced by activists and campaigners urging companies to address issues including possible human rights abuses, their climate impact, diversity and inclusion policies. Despite not being legally binding, they can influence the board to employ measures to address these issues.
The report was compiled by ShareAction, an investment campaign group focused on improving corporate behavior on ESG issues. According to the report, only four out of 279 resolutions tabled at AGMs in the past year in the United States, Europe and the United Kingdom got majority support.
This is a significant decrease from the 21% in support recorded in 2021 and reflected a serious decline in support for issues related to ESG in America, where rightwing politicians and activists are targeting financial companies in an attempt to eliminate support for diversity, equity and inclusion (DEI) as well as climate policies. Trump’s administration, led by the president himself, is calling for firms to abolish their environmental policies in favor of companies in oil and gas.
As a result, major U.S. banks such as Goldman Sachs, Wells Fargo, Citigroup, Morgan Stanley, and Bank of America have withdrawn from the Net Zero Banking Alliance.
President Trump has also issued executive orders that overturn DEI policies in the federal government. As a result, companies like Meta, Alphabet, Goldman Sachs, and Deloitte have begun reversing their own diversity policies.
The report also found that only 2 resolutions centered on climate change got enough support to be approved. In addition to this, it points to the increasing divide between asset managers in the U.S. and those in Europe and the United Kingdom, with the former supporting 25% of shareholder ESG resolutions while the latter support of over 80% of resolutions.
Furthermore, it called attention to the inadequate support by the biggest asset managers globally, namely, Vanguard, State Street Global Advisors, Fidelity Investments, and BlackRock. These companies manage $23 trillion in assets collectively and are all headquartered in America. Despite this, they only supported 7% of shareholder proposals last year.
In its report, ShareAction noted that if asset managers lent their support to shareholder proposals, they’d drive climate action and help improve conditions for low-paid workers who are struggling with the cost-of-living crisis. This is because asset managers have a great impact through firms they invest in.
While investors could be getting wary of openly supporting ESG initiatives under the current polarized environment in the U.S., entities like Energy and Water Development Corp. (OTCQB: EAWD) implementing ESG practices are increasing in number and it may be hard to convince them to abandon ship since they see the benefits of the path they have chosen.
NOTE TO INVESTORS: The latest news and updates relating to Energy and Water Development Corp. (OTCQB: EAWD) are available in the company’s newsroom at https://ibn.fm/EAWD
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