Morningstar reporter does ax work on NLPC shareholder activism • National Legal And Policy Center

Last week, a reporter from the influential financial ratings and research firm Morningstar, Ruth Saldanha (picture above), reported results of a proxy season analysis of a so-called “anti-ESG explosion” of shareholder resolutions at the annual meetings of several major companies.

Without contacting the National Legal and Policy Center about its 25 proposals this year, Morningstar incorrectly characterized them as measures contrary to the environmental, social and governance (“ESG”) focus that has been widely adopted by Corporate America.

“In [Saldanha’s] apparent zeal to disparage NLPC’s participation in the stock ownership process, Morningstar dismissed the fact that nearly everything of our resolutions were about governance issues – that’s right, the “G” in “ESG,” said Paul Chesser, director of the Corporate Integrity Project for NLPC. “It makes them pro-ESG!”

Indeed, NLPC’s proposals on several occasions have been proposed in the past, with very similar language, by progressive shareholders who would be identified as “pro-ESG”. Of the NLPC’s 25 proposals, six sought to split the roles of president and CEO; Eleven of them called for greater disclosure of charitable donations; Four of them called for greater disclosure of lobbying expenses; and the other sought greater diversity on the board. The other three could also have been proposed by progressives: one asked for transparency from Alphabet on the requests it received from the government to remove content from its platforms, and two of them addressed the rights rights and slave labor (Disney and General Motors).

“What about any of these proposals that make them ‘anti-ESG?’ asked Chesser. “Why is good transparent governance ‘pro’ when progressives pitch the idea, but ‘anti’ when conservatives pitch it? Morningstar can’t even point to anything in the statements of support for our resolutions that scream “conservative” or “anti-ESG”.

Curiously, Morningstar unwittingly admitted that NLPC’s proposals were really pro-ESG, reporting, “A lot of [NLPC] the proposals have found language and wording that the Securities and Exchange Commission deems acceptable by copying previously approved pro-ESG proposals. Morningstar also said one of NLPC’s many proposals – to split the roles of chairman and CEO – was “reasonable, and many stakeholders, Morningstar Sustainalytics included, recommended that investors vote for the proposal.” .

Nevertheless, Saldanha – in his general effort to portray resistance to “woke” corporate policies as a failure – misled his readers, subscribers and the business media about the nature of the NLPC resolutions. Worse – and without contacting the NLPC to find out more about its proposals – Saldanha smeared the NLPC by calling its intentions “dishonest” and “insincere”.

“If shareholders had approved any of our resolutions and companies had implemented their measures, they would not have done so in a way that benefits political conservatives or so-called ‘anti-ESG’ advocates – because that’s not what we asked for in our resolutions,” Chesser said. “Greater transparency and accountability is good governance for everything customers and investors – and again, these are measures that have been requested repeatedly in the past by progressive shareholders.

Chesser added that Morningstar is not the objective research and rating company – influencing hundreds of billions of dollars in investments – which many take for granted. The finance company is investigation by Missouri Attorney General Eric Schmitt under the state’s consumer protection and anti-“boycott, divestment, and sanctions” laws.

“I suspect what really bothers Morningstar and the ESG advocates is that we showed up on what they considered their turf at annual shareholder meetings,” Chesser said. “I’m sure they don’t like competition.”

Chesser called the proxy season as a whole an amplified first step for conservatives and noted that nearly every “pro-ESG” resolution presented to shareholders in recent years has also been voted down. Nevertheless, progressive shareholders have won the global “battleground” by showing up year after year, thanks to pro-ESG sympathizers who have invaded the boardrooms and executive suites of every major company.

“Ruth Saldanha and Morningstar were hoping we would be demoralized by our resolutions failing to pass, and I’m sure they wish we were gone,” Chesser said. “But we are just getting started. See you next year!”

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