Being identified as ESG-compliant may eventually be synonymous with being woke. You can ask Anheuser-Busch how well the woke identification has worked out for them.
The last time we discussed Environmental-Social-Governance (ESG), Biden had just issued the first veto of his presidency, rejecting a Republican-led measure that would overturn a regulation allowing retirement-plan managers to consider ESG-based climate change in their investment decisions.
ESG has always been about grabbing power through the “E” and the “S,” which are more about serving political agendas on climate and social issues demanded by “stakeholders.” Often, the “stakeholders” concerns are in contrast with and in opposition to those of actual shareholders.
It appears that shareholders are actually regaining their power. Exxon Mobil and Chevron’s shareholders recently struck down a long list of “stakeholder” demands for companies to cut greenhouse-gas emissions derived from fossil fuel use and release new climate benchmark reports.
The votes were abysmal for climate activists. All but two of the 20 shareholder proposals for the two companies garnered less than 25% of investors’ vote, according to preliminary results, with some performing much worse than similar proposals put forward last year.
Among the most controversial proposals were those that would have had the companies adopt targets for reducing emissions including those from third-party consumption of their products, such as when drivers burn gasoline in their cars, also known as Scope 3 emissions. Those received only 11% and 10% of the vote among Exxon and Chevron investors, respectively, compared with 27% and 33% for similar proposals last year.
In recent weeks, similar climate proposals failed to win over most shareholders at annual meetings of British oil and gas giants BP and Shell in London.
But there is even more! European insurers are now retreating from eco-activist policies.
European insurers are pulling out of the UN-convened Net-Zero Insurance Alliance over concerns that red states’ antitrust allegations could hurt their businesses. Bloomberg reported Wednesday that the group was holding a meeting to discuss recent departures, a week after 23 Republican attorneys general sent letters to members of the group raising antitrust concerns.
…[It] makes sense that insurers would be spooked in the same vein as Vanguard, which pulled out of the Net Zero Asset Managers initiative last year in the wake of similar threats. They may be worried about jeopardizing their business in the U.S., one lawyer said.
“There’s a new cost to these initiatives that I think people are now starting to factor in and wonder if they are worthwhile,” said Lance Dial, a partner with K&L Gates’ asset management and investment funds practice. “There was a thinking three years ago that this was a great Good Housekeeping seal of approval…. But now there’s a downside that’s become very apparent with the U.S. state actions.”
It is great seeing the fossil fuel companies finally taking the threats to their industry seriously. And while the GOP at the national level has been questionably effective, the state-level attorneys general have spearheaded a significant effort to roll back senseless policies that have been built on climate cult hysteria.
James Freeman, a journalist specializing in economics and assistant editorial page editor at The Wall Street Journal, noted a few months ago that we had achieved peak ESG:
Up until recently, ESG was just growing and growing, meaning it was more and more of a focus. It was a focus of investors of funds like ours. It was a focus of corporate chieftains, some of whom spent a lot of effort virtue signalling, you know, [BlackRock Chairman] Larry Fink, et cetera. Other corporate executives were simply kind of run over…
My belief is that ESG has peaked. That doesn’t mean at all that it’s going to disappear. But I sense a spirit in the investing community of a little bit of courage, where even a year ago there wasn’t courage. There was dancing. There was wiggling, wriggling, trying to deal with this amalgam of stuff because clients were saying that it was important to them. Funds and investment managers were trying to deal with it without disrupting their strategy, their approach, their ability to make money.
As more companies have had to endure the senseless requirements under ESG-based demands, they have concluded that the exercise hurts the bottom line. Additionally, being identified as ESG-compliant may eventually be synonymous with being woke.
You can ask Anheuser-Busch how well the woke identification has worked out for them.
1- “Bud Light sales show no signs of recovery as the Dylan Mulvaney controversy continues to bite, and now parent Anheuser-Busch Inbev .. may be unleashing a beer price war that could depress profits industrywide this summer.”
Price wars won’t happen. People will gladly pay… pic.twitter.com/r3TN6vDsxy
— IT Guy (@ITGuy1959) May 23, 2023
It is clear many companies, investors, and insurers are now recalibrating their decisions based on reality.DONATE
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