Big Labor may be down, and it may be sorely reduced in membership, but this societal sector — so adept at deploying political alliances, brainstorming envelope-pushing regulations, leveling dues, spending them on elections, and leveraging intimidating financial resources — is not going quietly into any night. Not as long as Joe Biden is president, anyway.

A recent study by the Institute for the American Worker assessing the labor movement’s exploitation of environmental, social, and governance requirements (ESG) — strategizing to browbeat investment-fund managers and, through shareholder activism, public companies with an endgame of replenishing diminished ranks (despite the financial harm this scheming causes union pension funds) — that “this emerging ESG threat” is something the “next president,” should he be someone other than the current POTUS, must take seriously.

Written by I4AW’s Sam Adolphsen and F. Vincent Vernuccio, the study warns that the initial “Environmental” focus of ESG is being supplanted by labor leaders, who are focusing on the leftist acronym’s “social” component in order to intimidate companies and force membership growth:

With help from the whole of Biden’s big government, Big Labor is replicating the ESG strategies used by environmentalists and other activists. These groups aim to cajole fossil fuel-producing companies and other businesses they consider socially unacceptable into abandoning profitable business ventures. The tactics of the Big Labor plan call for hijacking the shareholder resolution process through proxy voting and shareholder activism to force pro-union policies. Unlike typical shareholder proposals, those supported by Big Labor do not seek to advance shareholder value. Instead, they seek to increase union membership and strengthen Big Labor’s power.

Collective American nostalgia may believe unions exist for their members’ financial interests and benefits, with a special focus on the fiscal strength of their retirement plans. But in Joe Biden’s America, nostalgia has given way to ideology: In 2022, the Department of Labor rendered its controversial rule, Prudence and Loyalty in Selecting Plan Investments and Exercising Shareholder Rights, which deprioritizes the once-paramount fiscal interest of members and their union pension funds, permitting

plan fiduciaries to consider climate change and other environmental, social and governance factors when they select retirement investments and exercise shareholder rights, such as proxy voting.

Meaning? Through, per the I4AW analysis, “a calculated combination of executive rulemaking, agency enforcement, and vigorous campaigns of shareholder activism,” the consequence of diminished returns on pension funds are tolerable in order to squeeze public companies into accommodating and expanding union membership. Indeed, President Biden first deployed his veto power in order to block legislation that would have undone his ESG regulation to make investment fund’s financial returns subservient to ideology.

Move over “E,” because it’s “S” time: In fact, “social” campaigns are now vastly outpacing “environmental” efforts when it comes to activity on the “shareholder rights” front, a favorite battleground for leftist causes trying to cow public companies. A new analysis by Diligent Markey Intelligent reports that Big Labor — whose funds hold massive amounts of stocks — has increased and focused shareholder efforts to promote “Workers’ rights initiatives”:

Labor unions are playing a bigger part in driving companies to enhance workers’ rights and freedoms, both launching proxy contests and filing shareholder proposals this season. In Q1 2024, seven social campaigns were launched globally involving labor unions, the same number as in the entirety of 2023, according to Diligent Market Intelligence’s (DMI) Activism module.

With annual corporate meetings serving as high-profile platforms for activism, union leadership, in cahoots with Biden administration regulators, have embraced and implemented the ESG opportunity, focusing on the middle initial:

In Q1 2024, 181 campaigns were launched at U.S. companies inclusive of social demands, more than double the 71 environmental campaigns in the same period. Just 234 social campaigns were launched throughout 2023 at U.S.-based companies.

For all the sound and fury, however, the targeted Big Businesses seem less cowed by Labor’s aggression. Indeed, the biggest of them all, Exxon Mobil, is crowing about the lopsided defeat of an intense campaign led by CalPERS — the financial colossus (worth $485 billion) controlling the pension and health-benefit dollars of California’s public-employee retirees — which stage-managed an effort to bounce the energy giant’s CEO and board members. The battlefield — Exxon Mobil’s annual shareholder meeting — saw 95 percent of its stockholders side with the company, whose chairman, Darren Woods, said the vote

. . . signals a belief that we are on the right track by overwhelmingly re-electing our directors and soundly defeating all four proposals that would have hampered our ability to create long-term value by providing the world with the energy and products it needs while investing billions to reduce carbon emissions in our own business and others’.

We expect the activist crowd will try and claim victory on today’s vote, but common sense should tell you otherwise in light of the large margin of the loss.

With even the wishy-washy Business Roundtable — which genuflected to “stakeholder capitalism” several years ago — allying itself with Exxon in its fight, it appears corporate America may have come off the canvas to exchange blows with ESG union activism.

As for the political front of that battle, involvement of Capitol Hill and the White House is also in demand.

The I4AW’s ESG analysis, holding the Biden administration to be hopeless, argues, “The next American president can immediately reverse course on the decades-long back-and-forth battle over whether fiduciaries can use nonfinancial considerations in managing retirement funds” by returning to “the Trump-era rule that clarified the principle that fund managers must prioritize pecuniary, or financial, factors in their investments.”

The analysis also recommends the executive ditching of the “all things being equal” rule. Applied to the ESG prequel known as “economically targeted investments, this 1994 Clinton Labor Department invention blessed the making of pension-fund investment decisions via proxy shareholder resolutions and the consideration of policy and political factors.

Meanwhile, the Republican-led House of Representatives is now putting Big Labor’s ESG stratagems under public scrutiny. “In light of recent high-profile proxy votes pushed by unions,” Representative Virginia Foxx, chairwoman of the House Committee on Education and the Workforce, has written the leaders of the Teamsters, AFL-CIO, and SEIU unions to inform them that her panel

is investigating shareholder activism activities that involve assets held by union pension plans, the impact on the value of the pension plan investments, and the expenses incurred by the plans in pursuit of these activities. As part of this investigation, the Committee is making this inquiry to understand the practice of proxy voting by your union.

Foxx’s letter — which charges “shareholder activism may not increase investment returns and may impose expenses on a plan” — lists multiple questions that the Committee wants answered by June 12.

They include: “How do you vet shareholder proposals with your membership?” “Has your union targeted shareholder proposals at companies it is attempting to organize?” and “Has your union used shareholder meetings as a means of encouraging companies to sign statements of neutrality or willingness to accept card check organizing?”

If one might suggest an additional question of the AFL-CIO’s leadership: “Why does the union’s Better Pay and Benefits website page fail to list ‘investment policies that maximize our members’ pension fund holdings’ as a priority?”