by Jason Cohen
Center/right groups are gaining ground in pushing corporations back to the center, representatives for the investors and activist organizations told the Daily Caller News Foundation.
These center/right investors and activists are fighting back against diversity, equity and inclusion (DEI) and environmental, social and governance (ESG) policies that do not provide the best returns for investors, and result in discrimination, according to the groups who spoke to the DCNF. The groups do not want to impose their political beliefs on corporations, but rather want them to simply stop adopting policies they consider radical, they said.
Ethan Peck, associate for the National Center for Public Policy Research’s Free Enterprise Project (FEP) told the DCNF that his organization does not seek to push a political agenda. Its main purpose is to “depoliticize radically left-wing corporations,” he said.
“Pro-ESG shareholder resolutions still far outweigh the efforts to move corporations back to neutral, but the momentum is starting to shift,” Peck added. “For a long time, FEP had been the sole dissenting voice at shareholder meetings. It’s encouraging to see more and more groups and individual investors joining us in opposing the ESG scam.”
However, he said much more work remains to be done in the fight against “corporate wokeness.”
Shareholder proposals that were “anti-E&S” (environmental and social) garnered under 3% support in 2022 at shareholder meetings, making them ineligible for resubmission in 2023 due to the SEC’s 5% threshold requirement, according to The Harvard Law School Forum on Corporate Governance.
David Bahnsen, founder and managing partner of the Bahnsen Group, proposed a resolution demanding a review of banking giant JPMorgan Chase’s discrimination policies relating to religious and political views. His proposal was in response to media reports suggesting the company has “debanked” customers because they were Christian or conservative, Bahnsen wrote in The Wall Street Journal.
JPMorgan denied debanking customers due to these factors in their opposition statement to Bahnsen’s resolution. “We would not exit a client relationship due to their political or religious affiliation,” a spokesperson for JPMorgan Chase told the DCNF. “We serve 50,000 religious nonprofits throughout the country, among our more than 50 million households and 4+ million small business clients. These allegations are inconsistent with our business model that serves Americans in all 50 states, of all political stripes and religions.”
When asked why he chose to get involved with this shareholder proposal to JPMorgan, Bahnsen told the DCNF: “Because I believe in this company as an investment and want the companies I own in my portfolio to avoid decisions that harm the value of my investment.”
Pension funds with a state mandate for social investing had worse returns than other funds from 2001-2018, according to the Center for Retirement Research at Boston College in 2020. Having a fund with a state mandate for one year resulted in returns that were almost two basis points lower.
“[Corporations] believe – and I mean, sincerely believe – that the only people animated by a belief system in this country are the left,” Bahnsen said. “They are petrified of upsetting ESG groups and DEI groups and other radical environmentalists and woke equity inclusion groups… as companies find out that many shareholders won’t put up with it, we will move the needle, and we will win this debate.”
There has been a rise in anti-ESG proposals as they have quintupled since 2019, according to ISS Corporate Solutions. Alliance Defending Freedom (ADF) created a Viewpoint Diversity Index that Bahnsen’s proposal to JPMorgan Chase cites. It evaluates “corporate respect for free speech and religious freedom,” according to the ADF.
Senior counsel and senior vice president of corporate engagement for ADF, Jeremy Tedesco, described the index to the DCNF as “a counterweight that called on these corporations to go down a different path, one that respects the free speech and religious freedom rights of all people, regardless of their political or religious leanings, and calling these corporations to build a business culture that demonstrates that they respect those foundational freedoms.”
He said its purpose is not to humiliate the corporations or transform them into activists for ADF. “What David [Bahnsen] was asking was eminently reasonable,” Tedesco said. If no religious or ideological discrimination led to debanking, then they should explain what occurred in those situations, he added.
“Americans shouldn’t have to be worried that they’re going to lose their bank account or access to payment processing because of their religious or political beliefs,” he said. “We’re about making sure that they’re providing services to all legitimate customers that are out there without regard to their religious or political views.”
FEP put forward a resolution at BlackRock’s shareholder meeting calling for an audit to be conducted to analyze the affects BlackRock’s “Diversity, Equity & Inclusion (DEI) policies have on civil rights, non-discrimination and returns to merit” and its affect on business. “Across the political spectrum, all agree that employee success should be fostered and that no employees should face discrimination, but there is much disagreement about what non-discrimination means,” the supporting statement says.
It states companies like BlackRock have implemented DEI programs that have resulted in merit devaluation. BlackRock responded by saying that its “multi-year, multi-faceted Global DEI Strategy” is strongly connected to its core business goals, the board of directors wrote in its opposition statement. Their DEI strategy is structured to benefit clients and lure and keep skilled employees from every background. A spokesperson for BlackRock told the DCNF that FEP’s resolution only received 1% support at its annual shareholder meeting.
FEP also proposed a resolution at Amazon’s shareholder meeting calling for an audit to perform “a cost/benefit analysis of its Diversity, Equity & Inclusion programs,” and targets a racial equity audit Amazon has planned, which will be headed by former Attorney General Loretta Lynch, according to Securities and Exchange Commission filings.
“Racial equity calls for potential discrimination by race,” FEP’s supporting statement says. “Amazon’s proposed audit may jeopardize Amazon’s value by elevating divisive identity politics above its commitment to excellence, while also raising serious legal and commercial risks for the company.”
“Diversity, equity, and inclusion are cornerstones of our continued success and critical components of our culture,” Amazon responded in its opposition statement. “We believe these values are not only good for business; they’re simply right. We have risk management processes to protect against risks to the Company, including our Board’s oversight of risks related to our diversity, equity, and inclusion policies and initiatives.”
Peck told the DCNF that BlackRock and Amazon’s DEI policies “are morally abhorrent” and “violate both civil rights law and fiduciary duty.” He also said FEP faces significant obstruction. “Corporate boards do everything they can to minimize the influence of shareholders,” Peck said. “They use every little trick to keep us out of meetings, shut us up, ignore our questions and keep our proposals off ballots.”
“If the large allocators of capital in the United States achieve their goal, they will have sold out on long term American prosperity, which has profound consequences for American sovereignty,” Justin Danhof, executive vice president, head of Corporate Governance at Strive Asset Management, told the DCNF. “It should be noted that companies including BlackRock, JPMorgan and Amazon have invited the current social justice campaigns to their respective doorsteps.”
“For example, under activist pressure all three conducted racial equity audits,” Danhof said. “Is there any wonder the proponents are going further?”
– – –
Jason Cohen is a reporter at Daily Caller News Foundation.
Photo “JPMorgan Chase Tower” by Joe Mabel. CC BY-SA 3.0.
