Large corporations reject a historically high number of shareholder resolutions
In a significant shift, the US Securities and Exchange Commission's (SEC) new guidance has had a profound impact on the 2025 proxy season, leading to a substantial decline in the number of Environmental, Social, and Governance (ESG) shareholder proposals reaching a vote.
The SEC's new guidance, particularly the Staff Legal Bulletin (SLB) 14M issued in February 2025, has lowered the bar for companies seeking to exclude such resolutions. This has resulted in a substantial decline—about one-third—in the number of ESG proposals being voted on in the 2025 proxy season.
The 2025 proxy season saw 422 ESG shareholder resolutions voted on, a significant drop from previous years. Social and environmental proposals each saw marked declines — social proposals dropped from 416 in 2024 to 333 in 2025, and environmental proposals fell from 197 to 146. Meanwhile, governance proposals remained relatively stable in number and support.
The average shareholder support for ESG proposals stabilized just above 20%, but environmental and social proposals received lower average support than in previous years. Environmental proposals fell from about 18% support in 2024 to 13% in 2025, while social proposals declined from 15% to 12%.
The SEC's new guidance has also influenced proposal themes and investor behavior. Proponents are now tailoring ESG proposals more precisely to company-specific issues and industry dynamics, with a broader shift of investor focus back towards traditional governance fundamentals rather than broad environmental and social issues.
Institutional investors have reduced direct engagement, partly due to regulatory uncertainties, which affects visibility into shareholder expectations.
Anti-ESG proposals increased in number but generally had very low support and higher withdrawal rates, reflecting companies’ preferences to negotiate rather than face public scrutiny of contentious topics.
The rise in omissions contributed to a decline in shareholder proposals this year. Shareholders filed 574 proposals this year at S&P 500 companies, down from 746 the previous year. The US Securities and Exchange Commission granted 195 "no-action" requests for companies to exclude a shareholder proposal from its proxy materials this year, a 33% increase from 2024.
The new rules may limit the types of issues addressed through shareholder proposals, potentially leading to the use of other tools like proxy filings or PR campaigns. For instance, a proposal requesting pharmaceutical company AbbVie to report on the legal and reputational risks of advertising puberty blockers was scrapped.
However, some believe that well-crafted proposals will still get through. Luke Perlot, associate director at the National Legal and Policy Center, expects to adjust to the new rules.
Some ESG advocates, such as As You Sow, believe that they will adapt to the 2026 proxy season as the SEC's new rules resemble those under the first Trump administration. Ariane Marchis-Mouren, senior researcher at the Conference Board's ESG centre, stated, "Once a proposal has been omitted, it sets a precedent and makes that type of complaint more difficult to move forward."
The SEC's new rules have led to more omissions of environmental and social proposals compared to previous years. ISS-Corporate found that 21% of environmental and social proposals were omitted this year, compared with only 9% last year. Approximately 57% of the proposals that were omitted were related to environmental and social topics.
Amazon shareholders did not vote on a proposal to assess the company's commitment to workers' collective bargaining rights this year. Amazon and Tesla had proposals requesting an assessment of workers' freedom of association and collective bargaining omitted.
In February, the SEC rescinded guidance issued by the Biden administration that made it easier for shareholders to submit environmental and social proposals that raised issues with a "broad societal impact." The SEC also allowed Constellation Brands to omit As You Sow's request for greenhouse gas emissions reduction disclosure, citing micromanagement.
In summary, the SEC’s new guidance in 2025 has sharply decreased the number of ESG shareholder proposals reaching a vote while stabilizing or slightly lowering support levels for environmental and social issues. Governance proposals have remained steadier in volume and support, reflecting a regulatory and investor pivot towards governance fundamentals.
- The influence of the SEC's new guidance has extended to various aspects of business, such as finance, investing, and wealth management, as companies are now more inclined to exclude ESG shareholder proposals.
- In the realm of personal finance and career development, job seekers may need to prioritize skills training in governance fundamentals due to the increased focus on traditional governance issues.
- The decline in ESG proposals has resulted in fewer opportunities for education and self-development in environmental and social matters, potentially impacting the future of businesses and their approaches to ESG.
- The shift in investor behavior and proposal themes can also be observed in the job market, with an increased demand for professionals who fully understand and can navigate governance-focused issues.
- The rise in omissions of environmental and social proposals and the rescission of specific guidance issued by the Biden administration could potentially impact the trajectory of businesses' long-term commitments to ESG, as they may adjust their strategies to align with current regulatory practices.
