A Christian investment firm announced it will submit shareholder proposals to 38 large companies this year in a campaign aimed at “moving away from controversial social issues” and “focusing on shareholder value.” Board members of targeted companies (and others) need to determine whether their companies are addressing controversial social issues and develop strategies to prevent their business policies from being labeled as “woke” or, worse, illegal.
Inspire Investing, which manages more than $4 billion in assets, plans to submit separate shareholder proposals to 38 companies, including Costco, McDonald's, Nike, Nvidia, Oracle, Mastercard, Alphabet, Meta and Microsoft, according to a report from Fox Business. The proposals target corporate policies related to access to abortion pills, the use of artificial intelligence, debanking, diversity, equity and inclusion (DEI), and more.
“What we're asking companies to do is return to neutrality, and the purpose of these proposals is for companies to treat all customers and employees fairly, focus on their core business, and avoid getting drawn into divisive political issues that could expose companies to customer backlash and legal and financial risks,” Robert Netzly, CEO of Inspire Investing, told Fox Business.
Inspire Investing plans to submit shareholder proposals regardless of whether the target company is profitable or not.
Corporate board members can expect Inspire Investing to not be the only investor submitting anti-ESG proposals in 2026. Last year, the Trump administration signaled it would file anti-DEI lawsuits against companies, which could contribute to an increase in anti-ESG shareholder proposals this year. Nike was recently the subject of a federal investigation by the administration over its DEI policies.
Boards of companies currently targeted by Inspire Investments, or of other companies that may be targeted in the future, may need to consider the following:
• Conduct careful legal review of the language used in all business policies. Protecting businesses from legal risks must be a top priority. How policies and strategies surrounding business operations are written can be used against your company. A company's board of directors must determine whether the company is violating federal, state, or local laws regarding DEI, environmental issues, employee rights, and more. Keep in mind that organizations like Inspire Investing are focused on ending what might be considered a “progressive” or “aberrant” agenda. Even after a company's policies pass a thorough review by the legal team, they still need to be strategically defended with the help of investor relations.
• Seek support for management policies from other shareholders. If your company receives a shareholder proposal that opposes your business practices, it may be helpful to have other shareholders who publicly support your business practices. If your directors can demonstrate that most shareholders believe that what the board is doing is good for the business and that the company is profitable, your shareholder proposal is more likely to be defeated.
• Ensure the company's current D&O insurance is appropriate to the evolving nature of ESG risks. As what constitutes political and social risk has expanded, corporate board decision-making has come under increased scrutiny. D&O insurance must provide protection that reflects an expanded interpretation of those risks. In today's politically charged environment, shareholders and others may seek to hold directors personally liable for certain board management decisions. Members of a company's board of directors must remain vigilant to prepare for such an eventuality. We will increase your D&O insurance accordingly.
