(NZAM) initiative. Te committee accused them of colluding to impose radical environmental, social, and governance goals on American companies. Firms including BlackRock, State Street, JPMor-


gan, and others received a letter from the committee. Facing increased pressure from those opposed to ESG measures, in January 2025 the NZAM initiative pulled its signatory page of more than 325 companies managing $57.5 trillion in assets and suspended all activity to undergo a review of its program. Tis hap- pened just days after BlackRock, the world’s largest asset manager by AUM, pulled out of the initiative. Similarly, Bank of America, Citigroup, Goldman Sachs, JPMorgan, Morgan Stanley, and Wells Fargo pulled out of the Net Zero Banking Alliance. Just a few weeks later on February 11, 2025, Acting


SEC Chairman Mark Uyeda directed the SEC staff to notify the 8th Circuit Court of Appeals of “changed circumstances” regarding the SEC’s final ruling on certain climate change disclosures. He noted the rule was “deeply flawed and could inflict significant harm on the capital markets and our economy.” Te increasing polarization of ESG is creating a


tug-of-war between greenwashing and greenhushing. In greenwashing, a business is seen as exaggerating its commitment to sustainability with limited or no material financial metrics to back up its claims. On the other side of the spectrum, greenhushing refers to companies purposely staying silent on their sustain- ability goals for fear of being labeled a greenwasher. Companies are becoming increasingly fearful of


setting climate goals amidst the changing political climate and are concerned that putting forth lofty greenhouse gas emission reduction objectives could leave them a target for anti-ESG investor proposals during the proxy season. Marchis-Mouren explains that we are seeing “proposal fatigue growing among institutional investors, so companies can strengthen their investor support by providing detailed cost- benefit analyses of shareholder proposals.” What about carbon emissions? “Companies are


walking away from their Scope 3 ESG commitments. It’s a broader sectoral shift,” Moote says. Reporting on Scope 3 and setting goals to reduce such emis- sions has been a hot environmental topic, as Scope 3 emissions are indirect emissions and much harder


ni ri .org/ irupdate


for a company to manage and in turn reduce. Interestingly, this shift away from setting net-zero


goals and reporting on Scope 3 emissions may be less about anti-ESG sentiment and more about shifts in technology. Tere is significant growth in energy usage worldwide as a result of the use of artificial intelligence (AI). Georgeson tracks companies that have walked


“Any company


not actively looking at AI is doing a disservice to their business given


the rapid adoption of the


technology.”


Courteney Keatinge, Glass Lewis


back or reassessed their climate-related goals, noting supply chain challenges. Alphabet is no longer claiming to be carbon


neutral with AI causing its greenhouse gas emissions to rise by 13% in 2023 alone. Microsoft saw a 29% increase in emissions since 2020 due to growing AI demand and the infrastructure needed to meet it. HSBC ditched its net-zero by 2030 goal, pushing it back 20 years to 2050. Te Science Based Target initiative, one of the


world’s foremost frameworks for carbon reduction, removed more than 200 companies from its list of net zero commitments. Te world is evolving not just from a political standpoint but from a technology perspective, and companies will need to navigate competing stances on ESG issues.


Artificial Scrutiny: The Genuine Ethics of AI AI proposals are expected to be front-and-center this proxy season. Keatinge explains that it’s not just the environmental impact of AI, but also the ethical implications of its usage, board oversight of AI, and board skillsets around AI. Keatinge says she often speaks to companies


about how they are training their directors to be conversational in AI and reminds us that the “AI models of today are different than they were two months ago.” She recommends not making one board director the AI expert, but rather ensuring that the entire board is well-versed on the evolving topic. She adds, “Any company not actively looking at AI is doing a disservice to their business given the rapid adoption of the technology.” Jun Frank, Managing Director of Compensation


and Governance Advisory at ISS Corporate, agrees. He has leveraged AI to create fictional investors to illustrate potential approaches. “Let’s say your AI is a persona that represents a differing perspective or


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