Coalition Formed to Coordinate Pushback on ESG Activism
The Main Street Investors Coalition was launched in response to the recent shift of institutional investor focus to environmental, social and governance (ESG) issues. The Coalition was formed by National Association of Manufacturers and other conservative-leaning organizations. The Coalition states that its aim is to protect retail investors from the growing influence of index funds and other institutional investors.
The Coalition’s formation comes after the announcement in BlackRock’s annual letter to shareholders that it would become more assertive regarding engagement with its portfolio companies, with a focus on ESG matters. Vanguard has similarly indicated that it will act on ESG risks and opportunities in its investment. Backing from BlackRock and Vanguard has led to an increase in the passage of ESG shareholder proposals during the current proxy season.
A recent The Wall Street Journal blog post cites the Coalition’s founder, George David Banks, as stating, “So few of these votes have any credible connection to improving financial performance. … It’s just not the way the system was set up to work, and if it’s allowed to get even further off the rails than it currently is, it’s bad for retail investors and it’s bad for corporate governance.”