Companies Quiet Diversity and Sustainability Talk Amid Culture War Boycotts

Amy Borrus, executive director of the Council of Institutional Investors.
Amy Borrus, executive director of the Council of Institutional Investors.


  • Mentions of social-impact initiatives during earnings calls have declined, reversing a trend that had picked up after the killing of George Floyd in 2020

Companies’ mentions of green and social initiatives during earnings calls have fallen off sharply in recent quarters, reversing a more boastful approach taken over the past few years amid intensifying pressure from some investors and conservative activists.

Take electronic-signature firm DocuSign, where Chief Financial Officer Cynthia Gaylor in March 2022 said the company achieved carbon-neutral status during the year ended that January. Gaylor, who is set to step down as CFO on June 15, at the time said the company was continuing its efforts to reach net-zero emissions no later than 2050.

The company’s executives haven’t mentioned sustainability initiatives, carbon-neutral status or net-zero emissions on its earnings calls since. A DocuSign spokeswoman didn’t comment on why executives haven’t discussed such topics on recent earnings calls, but said the company continues to make investments in its environmental, social and governance programs and regularly updates investors and customers on its initiatives.

Finance chiefs and other executives have significantly quieted down in public settings about their environmental and employee diversity efforts as opposition has mounted from a confluence of interests: investors who want companies to focus on their operations, not the social good, and conservative groups and political leaders who have seized on corporate support of such causes to rally “anti-woke" constituents—for example, calling for boycotts of brands that advertise their support of the LGBT community in the wake of recent disputes with Target and Bud Light.

“The easiest thing to do is just to stay out of the conversation and emphasize other facets of business that are going to be perceived as less controversial and more core to the traditional metrics of the business," said Jason Jay, senior lecturer of sustainability at Massachusetts Institute of Technology.

Executives at U.S.-listed companies mentioned “environmental, social and governance," “ESG," “diversity, equity and inclusion," “DEI" or “sustainability"on 575 earnings calls from April 1 to June 5, down 31% from the same period last year, according to data from financial-research platform AlphaSense. That is the largest such year-over-year decline and the fifth consecutive quarter of year-over-year drops, following a pickup in these discussions and corporate social efforts in the wake of the police killing of George Floyd in May 2020.

Chief financial officers, who often oversee sustainability and diversity efforts, are among the executives who have changed tack. CFOs at U.S.-listed companies mentioned the topics on 93 calls from April 1 to June 5, down 30% from the prior-year period, AlphaSense said.

While such instances of “green-hushing" may be part of a larger strategy for many companies to avoid weighing in on divisive issues, there is little sign that public companies are pulling back from the initiatives themselves, such as DEI employee training and emissions reductions.

Companies still regularly voluntarily issue detailed sustainability reports, disclose greenhouse-gas emissions and tie a portion of their executive compensation to ESG metrics. Businesses are also busy preparing soon-to-be-unveiled new climate-disclosure requirements from the Securities and Exchange Commission by creating systems for collecting data and managing future compliance costs.

What’s more, 70% of U.S. chief executives said that their company’s ESG programs improve their financial performance, up from 37% a year earlier, according to a KPMG survey released last October.

Still, pressure from some investors and advocacy groups appears to have persuaded companies to pivot their messaging with analysts and investors. The National Center for Public Policy Research, a conservative think tank and investor, issued about 55 proposals this year, up from roughly 30 in 2022. The proposals argued that the companies might be abandoning their fiduciary duties to shareholders by not being neutral on social and political issues or acting in accordance with discrimination laws, said Scott Shepard, a fellow at the think tank.

Chip maker Qualcomm last explicitly mentioned ESG topics on an earnings call in February 2022 when CFO Akash Palkhiwala said the company had recently published its annual corporate responsibility and ESG report, which outlines progress against its companywide targets, including environmental sustainability and diversity and inclusion.

The company frequently addressed the topics on previous calls, for example to discuss its net-zero global emissions or purchases of 100% renewable solar energy for its San Diego headquarters. Qualcomm didn’t respond to a request for comment.

Meal-kit provider Blue Apronlast mentioned ESG in November 2022 when CEO Linda Findley said it continued to focus on ESG and had recently launched its inaugural ESG report. Findley and former CFO Randy Greben had previously touted the company’s efforts. “When we increased our starting hourly wages to $18 per hour, we viewed it not only as an investment in our ESG initiatives but also as simply a wise business decision," Greben said on an August 2022 call.

The company in recent months has focused on improving its liquidity and streamlining its operations. On Friday it said it closed on the sale of its production and fulfillment business to FreshRealm, which provides meals to retailers. Blue Apron declined to comment.

Some of the ESG silence on earnings calls could be attributable to corporate efforts to avoid “greenwashing," or touting overly optimistic projections for sustainability, said Rob Fisher, KPMG’s U.S. ESG leader. By being more careful about what they put out in the public domain, he said, companies can avoid running afoul of new and proposed sustainability reporting requirements.

The drop in executives’ earnings-call mentions is ironic because disclosure rules should be putting more pressure on addressing these issues going forward, said John Bajkowski, president at the American Association of Individual Investors, a professional group.

“Generally better standardized disclosure is good for the investor and they are free to consider what they feel is critical," he said. “If CFOs are shying away from discussing ESG issues during conference calls, it is likely a desire to avoid stirring up the extreme voices."

The pullback also has the effect of weakening transparency, which is generally not helpful for investors, said James McRitchie, an individual investor in close to 200 companies, most of which lead ESG programs.

“It would be good if companies fight back and say why this is good," McRitchie said, referring to their ESG initiatives. “I think companies are going to hush it up more, but they’re going to keep on going with the initiatives."

The Council of Institutional Investors, which represents pension funds and other large money managers, doesn’t have a stance on the backlash, but said its U.S. asset owner members hail from “blue and red states," including states where the backlash is in full force. CII has supported standardized disclosures of companies’ climate risk and workforce management metrics.

U.S. institutional investors understand that executives at many of the companies in their portfolios are keeping quiet about their sustainability initiatives, said Amy Borrus, CII’s executive director. Many large asset managers are in the same bind and they too are choosing their words more carefully, she said.

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