Corporations that aren’t basing their ESG/DEI investments on traditional return on investment (ROI) calculations risk being held legally accountable for numerous infractions, warns Free Enterprise Project (FEP) Executive Director Stefan Padfield in a commentary published at RealClearMarkets.

FEP has been filing numerous shareholder proposals this season tackling this issue, and Stefan reports that “the optics for implicated corporations are not good so far.”

Read Stefan’s commentary below.

There are myriad red flags that corporations have been investing in ESG, which includes DEI, without properly assessing net present value (NPV) or return on investment (ROI), even though NPV and ROI calculations should be the starting point for any corporate decision-making. For example, an article in the Harvard Business Review noted a few years ago that “before anyone writes a check, you need to calculate the return on investment (ROI) by comparing the expected benefits with the costs.”

Stefan Padfield

Importantly, if corporations do not base their ESG and DEI investments on traditional NPV and ROI calculations, they have the potential to be held accountable for numerous infractions, including breach of duty of care, breach of duty of loyalty, breach of duty of oversight, breach of duty of candor, securities fraud and consumer fraud. Let’s unpack that.

First, corporate managers have a fiduciary duty to make fully informed decisions, and it is arguably impossible to defend a corporate decision as fully informed if there was not even an attempt to assess NPV or ROI. And the signs that this omission is rampant are everywhere. Read almost any corporate ESG report and there will likely be no mention of ROI. Of course, there are decisions that can’t be boiled down to NPV or ROI. But even in those cases, corporations should be clear about how they concluded NPV and ROI analysis was impossible or too costly.

Second, there are good reasons to believe that if NPV and ROI assessments were made, they would not support the ESG/DEI initiatives. For example, Alex Edmans, Professor of Finance at London Business School, has noted that: “There is no link between demographic diversity and performance, despite many flimsy reports claiming the contrary…. Indeed, the evidence is that quota-driven demographic diversity reduces performance.” (Not to mention setting corporations up for million-dollar discrimination claims.) Meanwhile, net zero commitments may be utterly utopian.

Third, if corporate managers are consciously disregarding their duty to make fully informed decisions when it comes to adopting ESG and DEI initiatives, then they are arguably not only breaching the duty of care that governs information gathering but also acting in bad faith. A breach of the duty of good faith is much more serious than a breach of the duty of care. This is so because breaches of the duty of care can often be immunized or insured while the bad faith conduct typically cannot be similarly protected. And this still leaves potential breaches of the duty of oversight and candor, the former being specifically targeted at the board of directors.

Fourth, a failure to properly inform ESG and DEI decision-making not only implicates corporate law breaches of duty, but also potentially violations of federal securities law disclosure regimes as well as consumer fraud laws. Specifically, if corporate talking heads are walking around assuring investors and consumers that the company’s ESG and DEI initiatives are good for business, they must have a good basis for so concluding or else may be found to have been misleading listeners.

Fifth, all this also implicates the Big 5 asset managers and proxy advisors. If they are pushing corporations to adopt ESG and DEI initiatives (see here and here) without the proper underlying financial analysis, then they may also be liable for breaching duties to their shareholders, or misleading their clients, or even engaging in a conspiracy to defraud others in an effort to boost profits derived from selling ESG funds and ESG consulting services.

All the foregoing explains why this shareholder proposal season my employer, the National Center for Public Policy Research, where I work as the Executive Director of the Free Enterprise Project, plans to file numerous proposals asking or requiring corporations to come clean on the extent to which they have based their ESG and DEI initiatives on NPV and ROI. Without naming names, I can tell you that this process has already begun and the optics for implicated corporations are not good so far. One corporation’s proposed response to our DEI ROI proposal could not even manage to reference ROI in its opposition, preferring instead to handwave the endless empty platitudes we’ve grown so used to hearing in defense of DEI.

So, rest assured, the ESG ROI reckoning is coming.

 

The assassination of Charlie Kirk has truly been a “Turning Point” in American history. Charlie not only represented the faith upon which our nation was founded, but he also carried the spirit of our Founders to forge ahead in the face of adversity and to have brave and intelligent conversations with those with whom he disagreed.

It has been reported that Christian churches and our nation’s high schools and universities are experiencing an amazing resurgence of faith and patriotism as young people grapple with Charlie’s legacy and death. Those in Gen Z are being flooded with social media videos of Charlie’s exchanges that are causing them to rethink what they believe, and to be inspired to stand up for truth and justice.

Project 21 Ambassadors are responding to this phenomenon.

Melanie Collette

Melanie Collette, Project 21 Ambassador:

As we continue to mourn the loss of Charlie Kirk, it is uplifting to see that his leadership has sparked a true turning point for young Americans.

As a former high school teacher and adjunct professor, I worried I would never witness curiosity turn into courage, with students leaning toward civil debate rather than cancellation, and seeking truth instead of groupthink. My hope is that this trend continues and that this generation develops into leaders who are rooted in faith, freedom and civic duty.

May the generations of conservatives before them stay committed to guiding, mentoring and uplifting them every step of the way.

Priscilla Rahn

Priscilla Rahn, Project 21 Ambassador:

As a career educator, I am encouraged to see young Americans awakening to faith, patriotism and the pursuit of truth in the wake of Charlie Kirk’s tragic assassination. Moments like these remind us that even through loss, powerful seeds of conviction can be planted in the hearts of our youth. Gen Z’s renewed courage to ask hard questions and stand firm in their values gives me hope that the next generation will carry forward a legacy of strength, resilience and moral clarity.

In fact, we are witnessing a shift in the Overton window—conversations about faith, freedom, morals and patriotism that were once pushed to the margins are now moving back to the center, giving future generations the courage to build a society grounded in the values Charlie so passionately championed.

Jackee Andrews

Jackee Andrews, Project 21 Ambassador:

On July 28, 2025, Charlie Kirk posted on X: “Gen Z and Gen Alpha are coming to Christ in massive numbers. They don’t want fluff. They don’t want a watered down Gospel. They want the tough, honest Truth. They want the unfiltered Gospel of Christ crucified and the power of the resurrection.”

Then on September 3, 2025, a week before he was assassinated, he sent out another tweet: “Churches are growing. Young people are flocking to faith in God. You do not want to live in a non-Christian country. Even the most hardened atheists or agnostics are blessed by the church’s influence.”

Charlie had his finger on the pulse of America’s youth – and he was right. The revival fires he saw have burst into glorious flames after his martyrdom, and the discipleship work is now in full force. Followers of Christ need to step up and disciple these new believers into maturity. The result will be a mutual strengthening—new believers growing in faith while older saints are renewed—and the Great Commission being carried out with fresh vigor in this generation and into the next.

Terris Todd

Terris E. Todd, Project 21’s Director of Coalitions and Outreach:

The outbreak of revivals and baptisms on college campuses and high schools are just a glimpse of what God is planning with our younger generations. They are choosing faith over fear, and patriotism as their launching pad into the future of making our nation the greatest ever known to mankind. Let’s go, Gen Z!

The unfortunate circumstances as to how we came to this place in our nation’s history are a reminder to believers all across the world that God is still on the throne and He’s just getting started.

The U.S. Department of Education will soon strengthen the right to pray in school, President Trump recently announced. “To have a great nation, you have to have religion,” he said during a meeting of the Religious Liberty Commission at the Museum of the Bible.

Ambassadors with the Project 21 black leadership network are responding to this announcement, as well as the role of faith in both our public and private lives.

Charisma Peoples

Charisma Peoples, Project 21 Ambassador and Howard University School of Divinity Student:

Prayer changes things. The reintroduction of prayer into educational institutions serves as a mechanism to restore the presence of God within our academic frameworks. The removal of prayer precipitated an atmospheric decline marked by heightened violence alongside immoral indoctrination and acceptance of unethical behavior.

Prayer serves as a guiding force for students while it simultaneously fosters good citizenship among them. Consequently students find reassurance in the belief that their day will receive blessings and they have a source of support during times of trouble. The reintroduction of prayer into public spaces will propel this nation forward in educational advancement while simultaneously elevating our collective trust in God as part of our religious heritage.

Our children must understand that their entitlement to religious freedom applies universally across all places and activities without exception.

Ronald D. Gates, Sr.

Dr. Ronald D. Gates, Sr., Project 21 Ambassador and Pastor:

Bringing prayer back into schools restores one of the foundational values upon which our nation was built. The Declaration of Independence and the Constitution both acknowledge the role of divine guidance in securing liberty and justice.

President Trump’s call to protect prayer in schools strengthens the free exercise of religion and ensures that faith is not silenced in the next generation. This move affirms that spiritual freedom is not only a personal right but also a cornerstone of America’s moral fabric. To put it simply: Prayer invokes God’s presence!

Marie Fischer

Marie Fischer, Project 21 Ambassador and Jewish Activist:

I applaud President Trump for constantly taking a firm stand for religious freedom. So many forget our country was founded by those who initially were breaking away from the Church of England.

I feel it would be a blessing if children are given the option to practice their religion in school without being penalized for it by school administrators or teachers, whether it be a moment of silence or children not being penalized for missing school days due to religious holidays.

However, I do worry that this may open the door to other situations such as the one that came up a few years ago when Satanists in Chesapeake County, VA wanted to create a club in a school.  In that case they used the freedom of religion argument, since other religious organizations were using school resources. Do we draw a line as to what religions are acceptable or considered mainstream, and if we do, is there still freedom of religion?

Curtis T. Hill, Jr.

Curtis T. Hill, Jr., Project 21 Ambassador and Former Attorney General of Indiana:

As Indiana’s former Attorney General, I stand firmly in support of President Trump’s America Prays initiative, which rightly defends the God-given rights of our children to pray and practice their faith in schools without fear or interference.

This bold measure recognizes a timeless truth: our liberties flow not from the halls of government, but from the Creator Himself, and any attempt to sever that connection only invites national decline, as we’ve witnessed since prayer was banished from classrooms six decades ago. By championing this revival of faith, we pave the way for America’s restoration, fostering stronger families, communities and a generation equipped with the moral clarity to lead us forward.

Horace Cooper

Horace Cooper, Project 21 Chairman:

Freedom of faith is a quintessential requirement for self-government. By making Freedom of Religion part of the First Amendment, our Founders bestowed on all Americans — then and today — a great protection that has allowed faith to flourish.

Unfortunately the left has eroded that freedom, arguing that religious expression is too bigoted and uninformed. Thankfully the Trump Administration is reversing this trend. A nation filled with faith practitioners is a safer, more moral one in which our children can live and thrive. Our Founders knew this, and President Trump rightly agrees.

Terris Todd

Terris E. Todd, Project 21 Director of Coalitions and Outreach:

Our faith is the cornerstone of a free and moral society that is being challenged on a daily basis by those seeking to carry out an agenda guaranteed to cause our destruction. Thankfully our children and future generations will be able to stand firm, knowing someone in this generation has stood on the faith that was once delivered to the saints, and is paving the way for a more righteous and just way of life.

The president has gotten this right, and should be commended for taking the actions necessary for our nation.

Takosha Swan

Dr. Takosha Swan, Project 21 Ambassador:

Since prayer has been removed from schools, ideologies and indoctrinations of confusion and immorality have stepped in.

President Trump’s new initiative “America Prays” will be the foundation of renewing the minds of our young people and empowering them to bring back peace and unity to our nation.

As we approach Independence Day, ambassadors with the Project 21 black leadership network are reflecting on what America means to them.

Jovani Patterson

Jovani Patterson, Project 21 Ambassador:

As I reflect on the history of our country and the immense bravery of figures like George Washington in declaring independence from the Crown, I am filled with overwhelming gratitude and pride to be an American.

It’s important to take a moment to appreciate how far we have come, and to recognize that the luxuries we often take for granted—such as free speech, the ability to achieve financial independence and the right to protect our families—are not universally guaranteed around the world.

This Independence Day, I am humbled, proud, fortunate and extremely blessed to be an American.

Sabrina Pritchett-Evans

Sabrina Pritchett-Evans, Project 21 Ambassador:

I am profoundly grateful for the freedoms I enjoy as an American. I thank God for the blessings that allowed me to pursue my education, marry, raise my children and run my own business.

I honor the sacrifices made by those who came before me, whose courage paved the way for our liberty. Freedom is not free. God bless America! Happy 4th of July!

Brandon Brice

Brandon Brice, Project 21 Ambassador:

The American flag: A symbol of our freedom, our values and our story. This year marks almost 250 years of the American flag being in existence. The symbol is recognized by millions, and remains a symbol that every American — regardless of your race, gender, orientation or religion — should celebrate.

Throughout history, we have seen many different types of flags flown to express our feelings, our pride, our values, our beliefs and our faith. But in the end, the Stars and Stripes should remind us daily of that beacon of hope for everyone to see, and for the world to emulate.

 

Nicole Bennett

Nicole Bennett, Project 21 Ambassador:

For those of us fortunate enough to be swaddled in the Stars and Stripes and honored to carry our nation’s banner forward across the globe, being an American is a privilege and a blessing. Our birthright cemented by God’s grace is what makes us countrymen, and our love for the United States is what makes us patriots.

While there is no question that our past is marred by the tragedy of American slavery, as a nation we have grown together into the most powerful and influential nation this world has ever known.

Terris Todd

Terris Todd, Project 21’s Director of Coalitions and Outreach:

As we prepare to celebrate the independence of our nation on July 4th, the American story is truly one of God’s grace and redemption that’s still being written today.

A symbol of freedom and opportunity for anyone in the world to emulate, the United States of America remains a beacon of hope for those bound by tyranny.

I remain proud to be the descendant of those who loved our nation enough to pay the ultimate sacrifice to defend our freedoms. Happy July 4th!!!

Linda Lee Tarver

Dr. Linda Lee Tarver, Project 21 Ambassador:

On July 2, 1776, the Continental Congress approved the independence of our 13 colonies from British rule. On July 4, 1776, our nation’s leaders formally signed the Declaration of Independence even though America was at war with England.

The Declaration of Independence preceded the nation’s Constitution and is considered the most profound argument against government tyranny. The Declaration of Independence contains these familiar words: “We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.”