www.lexpert.ca 17
targets and other ESG metrics. On the other
hand, different stakeholders and advocates
disagree with the strategy and demand that
they hit pause.
Ramchandani advises clients on financ-
ings, mergers and acquisitions, and corpo-
rate governance, among other things.
"It's definitely more dominant in the
states than in Canada," she says. "But I
think we're seeing a creep into Canada."
e US has seen an uptick in anti-ESG
shareholder proposals, with one in Canada
last year. Ramchandani says this year's
proxy season will reveal if the trend has legs
in Canada. "What happens in the states
tends to be a good precursor of what we'll
see up here."
"We don't necessarily have the same
dynamics in Canada," says Bains. "But that
is certainly something that is developing
and evolving."
e focus of the anti-ESG movement has
primarily been the climate, says Ramchandani.
With the emphasis on net-zero targets and
greenhouse gas emissions reduction targets,
there is a feeling in high-emitting sectors
that they are being prejudiced. Diversity is
another focus, she says. In October, a US
appeals court upheld the board diversity rule
at Nasdaq, which required companies listed
on the exchange to have women and people
from minority communities on their boards
of directors or explain why they are absent.
"I suspect that as there are more legal and
constitutional challenges to some of those laws
and some of those rules in the states, we'll start
to see a bit of creep up here too."
Ramchandani says that the anti-ESG move-
ment has led some companies to temper their
statements and exercise more caution on ESG.
However, the foundational drivers of ESG
have not changed. She says companies are still
focused on it because ESG is a competitive
advantage and imperative for business.
"ere's that push and pull that companies
are having to navigate," says Ramchandani. "I
don't believe that, at the end of the day, the
fundamentals of the strategy have changed
as a result of it. It's just a heightened sensi-
tivity around the communications you make,
the disclosures you make, and how you talk
about this. You have to manage both sides of
these constituencies.
"It's just been so politicized."
US ANTI-ESG MOVEMENT
165 bills and resolutions
against ESG criteria
Source: S&P Global Market Intelligence
Introduced in 37 states
between January and
June of 2023
