Anti-ESG proposals have quadrupled in the past 3 years

Boards can expect to feel the effects of the ESG and DEI backlash this year, a new report from the Conference Board predicts. The number of anti-ESG shareholder proposals among Russell 3000 companies nearly quadrupled between 2021 and 2024, research by the Conference Board and partner organizations found. In 2024, 112 anti-ESG proposals were filed, versus 23 in 2021.

The percentage of anti-ESG proposals, however, has remained steady, at around 13% in both 2023 and 2024. That’s because the overall number of proposals increased over that time.

Meanwhile, around the same number of pro-climate proposals were filed in 2023 and 2024. Support for those proposals is down slightly, from 21% to 19%. And it’s far below the 41% support environmental proposals enjoyed in 2021.

Anti-DEI proposals rise as well: The number of anti-DEI proposals remains small, but is growing: Thirteen anti-DEI proposals were filed in 2024, compared with just 1 in 2021. But support for such proposals is very low, typically hovering around 1.7%.

The Conference Board predicts that investors will continue to see many such anti-ESG and anti-DEI proposals in 2025, given the current political climate.

“Proposal fatigue” grows as the number of them surges: The number of shareholder proposals hit a record high of 1,015 in 2024, the Conference Board found—that’s 27% more than the 798 filed in 2021. Unfortunately, many of those proposals seem, well, rather half-baked.

Both pro- and anti-ESG proposals often suffer from quality issues, the Conference Board suggested. Some pro-ESG proposals don’t give boards and management enough leeway to make changes, or set unrealistic targets for timelines, actions, or requirements. And some anti-ESG proposals seek to ban reporting or initiatives in ways that could hurt financial performance.

The influx of weak proposals has led to “proposal fatigue” among some investors. Support for proposals in general has dropped from 35% in 2021 to 23% in 2024.

“With ‘proposal fatigue’ growing among institutional investors, companies can strengthen investor support by providing detailed cost-benefit analyses of shareholder proposals,” Umesh Chandra Tiwari, executive director of ESGAUGE, said in a press release on the report. “They can do this by presenting more information in the proxy statements on the costs, unintended consequences, and limited benefits of implementing shareholder proposals.”

Companies are expecting (hoping?) to see fewer proposals this year as both shareholder communications and stock market performance have improved, the Conference Board reports.