• Facing broad unpopularity in its wider messaging, the anti-ESG movement has turned to weaponizing corporate inclusivity
  • The anti-ESG movement is actively seeking to undermine positive advances in companies’ diversity, equity and inclusion
  • Anti-ESG proponents are seeking to outlaw racial equity initiatives, including targets set by Fortune 100 companies to improve their hiring, retention and promotion of a racially diverse workforce and initiatives to work with more Black-owned businesses
  • Using lawsuits to threaten companies, the anti-ESG movement is attacking trans and queer representation and body-affirming apparel

By supporting companies’ initiatives to promote inclusivity, equity, and strong corporate governance, responsible investors can support social cohesion and ethical business practices–and they can demand better from companies. A clear example is the case of the Dakota Access Pipeline, where the banks financing the project received a request from over 130 investors with more than $685 billion in assets under management to respect the request of the Standing Rock Sioux Tribe to reroute the pipeline and avoid their treaty territory. A survey found that 76% of Americans feel that companies “play a vital role in society and should be held accountable to make a positive impact on the communities in which they operate.”

But the anti-ESG movement is actively seeking to undermine such efforts by targeting positive advancements in companies’ diversity, equity, and inclusion efforts.

How does the anti-ESG movement undermine Black, brown, and marginalized communities?

In the wake of the summer 2020 uprisings following the murder of George Floyd, companies began making promises about improving racial equity and the way their business practices and other activities impact  Black communities. To hold companies accountable to that, investors started filing shareholder resolutions calling on companies to conduct racial equity audits These are third-party assessments of how corporate policies, practices, and products either ameliorate or exacerbate racial inequalities. These received unprecedented levels of support from investors for two years, and are a helpful example of the different types of tools that responsible investors can use to support Black communities.

But concerted efforts against diversity, equity and inclusion (DEI) are seeking to undermine advancements made in 2021 and 2022. In July, 14 Republican Attorneys General sent letters to the CEOs of Fortune 100 companies asking them to “refrain from discriminating on the basis of race, whether under the label of ‘diversity, equity, and inclusion’ or otherwise.” This letter directly targeted racial equity initiatives, such as a target Microsoft set to work with Black-owned suppliers, and targets set by a number of companies to increase racial diversity in their hiring, retention, and promotion practices. It’s important to note that Democratic AGs have said corporate diversity efforts are legal.

Some companies have faced direct backlash over partnerships and advertising featuring prominent figures who have taken a stand against systemic racism. As the anti-ESG movement—facing unpopularity within both the business community and broader public in its wide anti-ESG messaging—has focused increasingly on politicizing diversity and inclusion, companies have spoken up less about racism and their DEI efforts. Meanwhile, large asset managers—major targets of the anti-ESG movement—have backtracked from their support of shareholder racial equity proposals, undermining further positive advancements. (See “Anti-ESG impacts” above)

How have anti-ESG efforts harmed queer representation?

The LGBTQIA+ community is a significant stakeholder in responsible investing with close to $1.4 trillion in spending power as of the last government census. Companies that are developing inclusive products for their consumers, regardless of sexual orientation or gender identity, show that they are able to adapt to a changing consumer base, which means being a successful company in the long term. 

But companies have faced conservative backlash and boycotts aimed at undermining queer representation and queer-affirmative messaging, as well as inclusion of product lines providing trans individuals access to body-affirming apparel.

Brewer Anheuser-Busch was targeted after transgender influencer Dylan Mulvaney promoted its most popular beer brand, Bud Light, on social media. And Target, which introduced a wide range of products as part of its Pride Collection in May 2023, removed some items from its collection following similar censure. Other popular retailers and consumer goods brands, from Cracker Barrel to Kohl’s to the Oreo cookie brand, have faced similar backlash.

Vocal anti-ESG proponents utilized these incidents to attack companies’ ESG and diversity, equity & inclusion (DEI) initiatives, filing or threatening lawsuits against companies including Target and Anheuser-Busch in an effort to get them to backtrack from not only LGBTQIA+ but also other DEI advancements.

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