Shareholder Activism, Corporate Social Justice, and the Fate of LGBTQ+ Liberalism

• In Event: Law and Political Economy

Abstract

How have conservative think tanks, legal organizations, and industry trade associations challenged the promotion of “environmental, social, and governance” (ESG) and diversity, equity, and inclusion (DEI) corporate governance policies and investment principles? How are collaborations between religious liberty and self-styled libertarian advocates and their partners in “faith investing” currently reshaping the authority of the Securities and Exchange Commission (SEC) and eroding the ideology and practice of corporate social justice? How do these developments inform theories of neoliberalism and social conservatism?
The paper begins by mapping the success that LGBTQ+ rights organizations like the Human Rights Campaign have enjoyed with its signature Corporate Equality Index since the early 2000s, the paper examines the Christian liberty legal organization the Alliance Defending Freedom (ADF) and its faith-based investor allies’ introduction of a competing Viewpoint Diversity Score Index and related campaigns against “debanking” and so-called “woke” proxy advisory firms that support many DEI and ESG measures. The paper notes when and why the ADF has received support from anti-regulatory organizations like the Cato and Manhattan institutes as well as powerful trade associations for the fossil fuels, firearms, digital assets, and banking industries.
Turning to the courts, the paper then reviews Alliance for Fair Board Recruitment v. SEC (5th Cir. 2024), which challenged the SEC’s diversity disclosure rule for boards of directors that was developed by NASDAQ leadership during the height of the 2020s corporate social justice era. That challenge was brought by climate change skeptic groups like the National Center for Public Policy Research, the anti-administrativist New Civil Liberties Alliance, and the anti-affirmative action activists Richard King and Edward Blum and their new group, the Alliance for Fair Board Recruitment. The paper then examines the Trump-aligned American First Legal’s partnering with the country’s largest faith-based exchange-traded fund, Inspire Investing, against Target’s LGBTQ “Pride Campaign.”

Author

• Joanna Wuest, Stony Brook University