November 1, 2023

Senator Schmitt Introduces the Stop Woke Investing Act

WASHINGTON – Today, Senator Eric Schmitt introduced the Stop Woke Investing Act to protect Americans from ESG-related policies put forth by the SEC and prevent the SEC from empowering woke activists:

“Woke activism has no bearing on the fiduciary duties of a company and has no place in the corporate boardroom – the SEC shouldn’t be used as a political weapon by the Biden administration to browbeat corporations into woke investing. The Stop Woke Investing Act will restore fiscal sanity and ensure that companies are focused on financial returns to their customers and shareholders, not on ESG quotas. I will continue to fight to root out woke investing and shield Americans’ hard-earned dollars from hyper-partisan investment practices,” said Senator Eric Schmitt.

“Allowing ESG to invade corporate America is tremendously damaging not only to the companies themselves, but the entire prospect of American capitalism and a growing economy. A company’s first duty is to provide value to its customers and shareholders. Any attempt to undermine this fundamental truth should be stopped, and that’s why I’m proud to support Senator Schmitt’s bill,” said Senator Ted Budd.

“Under the Biden Administration, the SEC has encouraged an increase of frivolous and politically motivated shareholder proposals in corporate boardrooms across the country. The Stop Woke Investing Act protects businesses by empowering them to better manage harmful activist proposals,” said Senator Mike Braun.

“Over the years activist investors have increasingly proposed shareholder resolutions to compel American companies to consider ESG-related priorities that have nothing to do with financial performance. The focus on ancillary environmental and social factors is putting businesses’ management at odds with their fiduciary duty to maximize financial returns to shareholders,” said Grover Norquist, President of Americans for Tax Reform. “That is why I am proud to support Sen. Schmitt’s Stop Woke Investing Act, which would limit the amount of extraneous shareholder resolutions that can be included on a company’s proxy ballot. The shareholder resolutions submitted must also have a material effect on the financial performance of the company. This bill preserves the true meaning of fiduciary duty and ensures American companies can continue to focus on job creation, financial performance, and economic growth.”

“With the ESG movement infiltrating corporations and threatening Americans’ financial independence, it’s more important than ever to ensure that asset managers are upholding their fiduciary responsibilities. Senator Schmitt’s bill restores integrity of investment decisions, promoting recommendations based solely on financial factors. We encourage all senators to support this latest effort to stop ESG in its tracks,” said Ryan Walker, Executive Vice President, Heritage Action.

“In an economy where Americans are feeling the pain of Bidenomics, the SEC under Gary Gensler continues to worsen matters for Americans’ retirement accounts by promoting ESG and non-material disclosure mandates onto businesses. The Stop Woke Investing Act aims to prioritize shareholders over stakeholders, focusing on requiring ballots to be material to a company’s financial performance. We applaud Senator Schmitt for his work in this critical area,” said James Czerniawski, Senior Policy Analyst, Americans for Prosperity.

Heritage Action, Americans for Prosperity, Americans for Tax Reform, the Heartland Institute and Heartland Impact, and the National Taxpayer Union support this legislation.


  • Rule 14a-8 of the Securities Exchange Act governs the content of public shareholder ballots. It provides for 13 categories public companies can use to exclude shareholder proposals. These 13 categories are inexact concepts requiring interpretation, such as “ordinary business operations of the issuer” or “a personal claim…or grievance.” The SEC interprets these categories through Staff Legal Bulletins (SLB).
  • In effect, the SEC has broad power to move the goalposts on what shareholder ballots a public company must include or exclude.
  • Most recently, in November 2021, the SEC issued SLB 14L, which includes a “significant social policy exception”.
    • SLB 14L prevents companies from excluding a proposal that “transcend[s] the day-to-day business matters and raise[s] policy issues so significant that it would be appropriate for a shareholder vote.” In this interpretation, the SEC forces businesses to include shareholder ballots that do nothing other than serve a woke social agenda and stifle the desire businesses may have to go public.
    • Actions like SLB 14L create an environment where companies are forced to include controversial ballots that are trivial to their business operations.
  • In light of the SEC fostering an activist proxy ballot environment, this legislation would:
    • Create a new 14th category for businesses to exclude frivolous ballots by requiring that shareholder ballots must be material to the financial performance of a company.
    • Limit the amount of proxy ballots a company is required to vote on. 
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