‘ESG Hasn’t Gone Away’: Group Urges Trump, SEC to Rein In ‘Big Three’ Asset Managers’ Voting Power Long Term

Social activism among corporate elites isn’t going away, but the Trump administration and the Securities and Exchange Commission have a solution to curb the influence of Wall Street’s largest asset managers, a conservative policy group argues.

The Bull Moose Project says that, in the past, the investment firms BlackRock, Vanguard, and State Street amassed significant control over shareholder votes through their dominance of passive index funds and used that influence to advance environmental, social, and governance initiatives and diversity, equity, and inclusion policies while wielding outsized power through shareholder proxy voting. However, the group contends that current decision makers at these investment firms are likely to steer these initiatives in the future if they remain in positions of influence.

“Many executives at these firms are major Democratic donors, and that’s their right. They may be cozying up to the current administration. But ESG hasn’t gone away,” Aiden Buzzetti, president of The Bull Moose Foundation, told the Daily Signal.

The firms collectively own about one-quarter of the U.S. stock market and are the largest single shareholder in about 90% of S&P 500 companies, according to a Bull Moose Project report titled “The Corporate Voting Cartel: How to Stop Wall Street Weaponization of Americans’ Retirement Plans.”

“[F]earing scrutiny from the Trump administration and Republican Congress, the Big Three have temporarily backed away from much of their overtly pro-ESG and pro-DEI voting behavior,” the report says. “But the same biased personnel remain entrenched within the firms’ stewardship teams, with the same conviction that they have every right to weaponize their customers’ investment dollars to advance radical agendas when the time is ripe.”

President Donald Trump signed an executive order in December on “Protecting American Investors from Foreign-Owned and Politically-Motivated Proxy Advisors.” The order largely targeted proxy advisory firms such as Glass, Lewis & Co. and Institutional Shareholder Services, which offer voting recommendations to shareholders in public companies. It did not address direct asset managers, and more action should be taken, The Bull Moose Project says.

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Buzzetti said he is “fairly confident” the Trump administration and the SEC will take action. 

“Just as some Republican state legislatures have banned DEI and critical race theory long term, we think it’s important to block ESG for the long term,” Buzzetti said.

The report names Tanya Levy-Odom, BlackRock’s head of investment stewardship of the Americas, who has authored articles focused on ESG and DEI. It also names State Street’s Americas head of asset stewardship, Holly Fetter, who discussed “wealth redistribution, economic and racial justice” in a 2018 podcast and is an advisory council member with the Clayman Institute of Gender Research at Stanford University.

The firms have countered that they focus on getting the best return on investments for their customers, not on political concerns.

“Vanguard does not have a house view on corporate governance nor do our funds vote in a uniform manner,” Netanel Spero, a spokesperson for Vanguard, told the Daily Signal in a written statement. “Proxy voting for Vanguard funds is managed, depending on the company in question, by the respective third-party managers, separate stewardship teams representing the two internal Vanguard investment managers, and via Vanguard Investor Choice.”

BlackRock declined to comment for this story, but referenced its annual report, which said it is “legally required to make proxy voting determinations on behalf of clients who have delegated voting authority to us in a manner that is consistent with their investment objectives.” It further states proxy votes are cast on a “financial materiality-based approach and are focused solely on advancing clients’ long-term financial interests.”

BlackRock also points to a report by the Committee to Unleash Prosperity, a conservative economic group that opposes ESG. The report examined 600 investment management companies on 50 ESG proposals in 2024. BlackRock was among the 11 that received an “A” rating.

A State Street spokesperson declined to comment.

The Bull Moose Project report recommends the SEC issue guidance encouraging or requiring “mirror voting,” in which passive index fund managers would vote their shares in the same proportion as active investors at shareholder meetings.

“Asset managers are signaling they are backing off ESG and social activism for now, but the reason we are pushing for mirror voting is because when a Democratic administration eventually takes power, they will eventually utilize that power,” Buzzetti said.

The report explains under “mirror voting,” if active shareholders supported a proposal by a 55%-45% margin, passive funds would automatically cast their votes in the same ratio.

“Mirror voting simply holds passive funds to their own sales pitch: mirroring the market, not distorting it,” the report notes.

The topic of mirror voting came up at an early June SEC Investor Advisory Committee meeting.

Among the examples cited in the report is the 2021 proxy fight at Exxon Mobil. All three asset managers voted to back the environmental hedge fund Engine No. 1’s successful effort to add two members to the Exxon Mobil board of directors.