Dive Brief:

• Groups opposed to environmental, social and governance initiatives at U.S. companies have stepped up their activism early in the 2025 proxy season, submitting 20% of all shareholder proposals, a 5 percentage point increase compared with the same period last year, the Conference Board said.
• Last year, among Russell 3000 companies, the number of anti-ESG proposals more than quadrupled to 112 from 23 in 2021, and “this trend is likely to further intensify in 2025,” the Conference Board said in a statement.
• “The volume of anti-ESG proposals will continue to increase steadily as the topic remains highly politicized,” the Conference Board predicted in a report on the 2025 proxy season co-written with ESGAUGE, Russell Reynolds Associates and the Rutgers Center for Corporate Law and Governance.

Dive Insight:

Political opposition to the push for measuring and promoting ESG performance has grown in recent years, culminating in an executive order by President Donald Trump last month.

The president on Jan. 20 required federal agencies to shut down diversity, equity and inclusion initiatives and end DEI performance requirements for federal contractors or grantees. Trump also called for a list of all federal contractors who have provided DEI training to government employees.

Both the opponents and champions of DEI have filed numerous shareholder proposals early this proxy season, “specifically calling for the elimination of DEI programs or targeting companies that have already scaled back on their DEI efforts,” the Conference Board said.

“This sustained scrutiny on corporate DEI is likely to intensify,” the Conference Board said, noting Trump’s order quashing federal DEI programs and a decision by a U.S. appeals court in December overturning a Nasdaq board diversity rule.

The Nasdaq standard, approved by the Securities and Exchange Commission, required listed companies to have at least one female board member and one director from an underrepresented group. Companies that did not align with the rule were required to publicly explain their noncompliance.

The Trump administration’s DEI order has sparked concern among U.S. companies that they may come under federal scrutiny for such programs, the Conference Board said.

Meta, Walmart, McDonald’s, Ford and other companies have publicly altered their inclusion programs.

Citi on Feb. 20 said it abandoned its DEI initiatives, pointing to pressure from the White House behind a decision to drop “aspirational representation goals,” except where required by local laws, according to a memo posted on the company’s website.

The New York City-based bank is also dropping rules requiring diverse rosters of candidates for job interviews, or panels of diverse interviewers.

In contrast, Apple shareholders on Tuesday followed the advice of company management and overwhelmingly rejected a proposal aimed at scuttling the company’s DEI programs.

Before the vote the company said in an SEC filing that the anti-DEI proposal “inappropriately attempts to restrict Apple’s ability to manage its own ordinary business operations, people and teams, and business strategies.”

Also, shareholders at Costco last month voted down a proposal that the company report on the risks stemming from its DEI program.

Costco’s board unanimously recommended that shareholders reject the proposal, saying that the company’s “commitment to an enterprise rooted in respect and inclusion is appropriate and necessary.”

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

“We already expected this number to continue to increase before the new [Trump] administration took over,” Marchis-Mouren said. “Anti-ESG proposals have been surging since 2021, with anti-ESG proponents becoming more assertive in recent years.

“It’s too soon to determine the level and scope of impact the current administration will have on anti-ESG and anti-DEI proposals, especially since most of these proposals were likely filed before or shortly after the election,” she said in an email response to questions.