Key Takeaways

  • Groups in the U.S. corporate world opposing environmental, social, and governance (ESG) initiatives have intensified their efforts early in the 2025 proxy season, with their shareholder proposals accounting for 20% of all proposals, up 5 percentage points from the same period last year, according to data released by The Conference Board.
  • Among Russell 3000 index companies, the number of anti-ESG proposals increased from 23 in 2021 to 112 in 2024, more than quadrupling. The Conference Board stated in a release that "this trend may further intensify in 2025."
  • In its 2025 proxy season report, released jointly with ESGAUGE, Russell Reynolds Associates, and Rutgers University's Center for Corporate Law and Governance, The Conference Board predicted: "As the issue remains highly politicized, the number of anti-ESG proposals will continue to grow steadily."

In-Depth Analysis

In recent years, political opposition to measuring and promoting ESG performance has grown, culminating last month in an executive order signed by U.S. President Donald Trump.

On January 20, the President ordered federal agencies to terminate diversity, equity, and inclusion (DEI) programs and end DEI performance requirements for federal contractors or grantees. Trump also requested a list of all federal contractors that had provided DEI training to government employees.

The Conference Board noted that early in this proxy season, both opponents and supporters of DEI have submitted a significant number of shareholder proposals, "some explicitly calling for the elimination of DEI programs, while others target companies that have scaled back DEI efforts."

"Ongoing scrutiny of corporate DEI is likely to intensify," The Conference Board said, citing Trump's executive order ending federal DEI programs and a December ruling by a U.S. appeals court overturning Nasdaq's board diversity rule.

That Nasdaq rule, approved by the U.S. Securities and Exchange Commission, required listed companies to have at least one female board member and one director from an underrepresented group. Companies failing to meet the rule had to publicly explain why they were non-compliant.

The Conference Board said Trump administration's DEI executive order has raised concerns among U.S. companies that such programs could invite federal scrutiny.

Companies such as Meta, Walmart, McDonald's, and Ford have publicly adjusted their inclusion programs.

Citigroup announced on February 20 that it was abandoning its DEI initiatives. According to a memo posted on the company's website, under pressure from the White House, Citi decided to drop "aspirational representation goals" unless otherwise required by local law.

The New York-based bank will also eliminate requirements for diverse candidate slates or diverse interviewer panels.

In contrast, Apple shareholders on Tuesday followed management's recommendation and overwhelmingly rejected a proposal aimed at abolishing the company's DEI programs.

Before the vote, Apple said in a filing with the U.S. Securities and Exchange Commission that the anti-DEI proposal "inappropriately attempts to restrict Apple's ability to manage its own day-to-day business operations, personnel, teams, and business strategies."

Additionally, Costco shareholders last month voted down a proposal requiring the company to report on risks posed by its DEI programs.

Costco's board unanimously recommended shareholders reject the proposal, stating that the company's "commitment to an enterprise rooted in respect and inclusion is appropriate and necessary."

Ariane Marchis-Mouren, senior governance researcher at The Conference Board, said the increase in anti-ESG shareholder proposals is not surprising.

"We expected this number to continue rising even before the new (Trump) administration took office," Marchis-Mouren said. "Since 2021, anti-ESG proposals have surged, and anti-ESG advocates have become more determined in recent years."

"It is too early to determine the extent and scope of the current administration's impact on anti-ESG and anti-DEI proposals," she said in an email response, "especially because most such proposals were likely submitted before or shortly after the election."