Amazon, Alphabet Targeted as Oklahoma Joins Anti-DEI Investor Ranks
(Bloomberg) -- Oklahoma is poised to become the first Republican state to try to use its influence as an investor to end DEI in corporate America, targeting companies including Amazon.com Inc. and Alphabet Inc. in shareholder proxy proposals.
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Using an increasingly popular tactic among conservative investors who are going after everything from Wall Street banks to health-care giants, Oklahoma Treasurer Todd Russ is planning to confront six companies that the state invests in through its $2 billion Tobacco Settlement Endowment Trust. The other companies are Netflix Inc., Lululemon Athletica Inc., GoDaddy Inc. and Yum! Brands Inc.
Russ is calling for 'political neutrality' in the companies' policies and partnerships, including challenging 'radical' political giving and donations to organizations such as Human Rights Campaign, which advocates for LGBTQ rights. He's also seeking equal treatment for religious employee groups in the workplace.
Although anti-DEI shareholder proposals have historically received only about 2% investor support, the move is designed to raise visibility and combat the power of progressive funds from California and New York, which for years have pushed businesses on everything from disclosing their greenhouse gas emissions to undergoing racial-equity audits.
The conservative assault against DEI (diversity, equity and inclusion) has gathered renewed strength in recent weeks as President Donald Trump sets about keeping his campaign promise to dismantle DEI in the federal government and American companies.
More than 30 companies are facing shareholder resolutions on DEI issues this year thanks to proposals from groups including the National Center for Public Policy Research, Alliance Defending Freedom and the Heritage Foundation. The proposals are non-binding, but resolutions that receive at least 30% support can often inspire changes in corporate behavior.
'The fiduciary obligation of a publicly traded company is to maximize their earnings for their shareholders,' Oklahoma's Russ said in an interview. When boards 'double down on things like DEI, and that ends up in the boardroom, they muddy the waters on real fiduciary obligations,' he said.
A spokesperson for Amazon.com declined to comment. Representatives for Google parent Alphabet, Netflix, Lululemon, Yum! and GoDaddy didn't respond to requests seeking comment.
The rise in anti-DEI shareholder resolutions doesn't mean that they will get any closer to passing, said Michael Passoff, founder and CEO of Proxy Impact, which works with investors supporting environmental, social and governance issues, including DEI.
He said the proposals often fail because they lack a financial argument. 'Many of the resolutions that are filed by these groups are more about their values or viewpoints than the financial materiality of what they're asking,' Passoff said.
--With assistance from Saijel Kishan.
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This has all sorts of ways that this could go south. Given the positive momentum and sentiment among traders, they feel this only warrants modest caution for now. When geopolitics come into play, I prefer to look at commodities and bonds. They're less distracted by narratives. Oil traders are telling us that they are not unconcerned. Maybe not panicking, but clearly not sanguine. Vincent Juvyns, chief investment strategist at ING I'm not expecting a selloff. Possibly the market will be a bit feverish, but I'm not expecting a rout. We don't think there is a need to reduce our equity exposure even if we are neutral on the asset class. At the moment, our base-case scenario is that the conflict doesn't escalate into a major regional crisis. Ben Emons, founder of FedWatch Advisors Financial conditions will tighten on higher oil prices, rising yields and lower equities. So it's likely to be a continuation of what happened on Friday. The key is where oil goes from here. 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