Taking ‘woke’ out of Wall Street

OPINION:

The Securities and Exchange Commission just reversed the policy that leftists have been using to hijack corporate shareholder meetings with their business-destroying agenda. President Biden’s minions created the “universal proxy card,” diluting restrictions on absentee voting so liberal activists could run wild in shareholder meetings.

Diversity, equity and inclusion and environmental, social and governance spread like wildfire under the Biden-era rule. Companies were compelled to advertise any left-wing proposal meeting a certain threshold. This enabled radicals who had the organization to round up the votes necessary to tie companies to destructive but fashionable schemes.

This was all disguised under benign-sounding banners such as “social responsibility,” “climate justice” and “racial equity.”

Lured into this trap, Anheuser-Busch InBev hired a man in a dress to showcase its premier offering, Bud Light. Beer drinkers across the country were so disturbed by this tone-deaf marketing campaign that sales plummeted. Budweiser went from the market’s No. 1 brand to also-ran status within months, vaporizing $27 billion in stock value.

The Bud Light incident was very public, but the behind-the-scenes embrace of DEI and ESG at management firms such as BlackRock, J.P. Morgan and Franklin Templeton obliged otherwise sensible companies to bend to the activists’ will.

With trillions of dollars under management, these outfits wield undue voting authority at annual meetings. Their power emanates from customer cash, which management firms used without consent. Fund managers had the luxury of championing every in-vogue, virtue-signaling fad that leftists dreamed up.

Thus empowered, these firms bullied some of the biggest corporations into promoting political causes that had nothing to do with serving consumers. FedEx was asked to lobby in favor of climate activism. A proposal insisted that IBM stop emitting carbon dioxide. PepsiCo was to be subjected to a “racial equity” audit.

Most small-time investors buy into the big funds, assuming managers take seriously their legal obligation to maximize shareholder returns. It wasn’t until the economists at Unleash Prosperity put the spotlight on proxy voting in 2022 that the little guys began objecting to the frittering away of their capital on shareholder proposals unrelated to business needs.

“If ESG was not driven by left-leaning ideology, it would consider the consequences of other scenarios, such as the risks associated with energy shortages, or the costs of complying with workplace mandates associated with race, ethnicity, and sexual identity,” the group wrote in its recent report on the topic.

Establishing corporate divisions devoted to slogans such as “diversity” and “equity” does nothing to improve the bottom line. Studies confirm that ESG is a money-loser because every dollar wasted on greenwashing is a dollar that wasn’t spent enhancing products and services.

Around 275 investment management firms were graded in the new Unleash Prosperity report based on their responses to activist maneuvering. They earned a solid B last year, which is quite an upgrade from the D they posted in 2022. Woke is no longer chic.

“Unleash Prosperity has been exposing the ESG racket for 3 years. Votes for bad ESG resolutions are down 50%. Now President Trump is moving to end the proxy advisory scam for good,” the group’s co-founder, Stephen Moore, said on X.

ESG and DEI aren’t dead yet, but the administration’s latest initiative will make it easier for smart executives to suppress liberal plots to inject politics into their business plans. Expect even more improvement in the year ahead.