Increasing numbers of anti-ESG resolutions are behind a rise in ESG shareholder proposals at US company AGMs, according to new research.

ESG proposals grew by 3% in the 2024 proxy season, according to data provider Morningstar, an increase largely driven by shareholders seeking to challenge pro-ESG policies.

Morningstar figures show that the anti-ESG figure of 87 is almost double the 2022 number of 48.

“For the first time,” Morningstar says in a report for the Harvard Law School governance blog, “the growth in new resolutions was dominated by proposals from anti-ESG filers — those seeking to advance strongly conservative, or net zero skeptic social policy aims.”

ESG has become highly politicised in the US, with Republicans claiming it is part of the “woke mind disease”, while Democrats champion causes such as energy transition and diversity and inclusion policies.

Risk disclosure rules on hold

Earlier this year, the US Securities and Exchange Commission (SEC), was forced to suspend the introduction of new climate risk disclosure rules after they were challenged in court. Since then, environmental groups have filed their own court action, defending the SEC.

Yet while anti-ESG resolutions may be proliferating, they appear to be failing to attract support.

Morningstar says: “Despite their rising volume, shareholders appear uninterested in these proposals. In 2024 they averaged only 2% support, falling from 9% two years prior.

“But, having seen over 200 such proposals voted on in three years, it’s reasonable to conclude that their point is to gain attention rather than shareholder support.”

This echoes observations by leading investors that many ESG AGM resolutions have become frivolous. Larry Fink, CEO of BlackRock, the world’s largest fund manager, said last year that he had stopped using the term ESG because had it become “weaponised” .

Meanwhile, in Europe, support for environmental and social proposals has grown. Average support for E&S proposals is 17.9%, according to research from Diligent, up from 15.2% last year.