Shareholder proposals that address environmental, social, and governance (ESG) issues are down sharply this year, according to a new report from U.S. shareholder advocacy group, As You Sow, and Proxy Impact.
As of Feb. 21, there were 355 ESG proposals filed with U.S. public companies for the 2025 proxy season, which is down by about one-third (34%) from the same point last year, the report said.
This decline in ESG-related filings is being driven by the shifting political climate, and particularly the changes at the U.S. Securities and Exchange Commission (SEC), it suggested.
“Proponents have largely taken a ‘wait-and-see’ approach, electing not to file resolutions until they were able to assess the direction of the new SEC,” the report said. “This approach was validated as it quickly became clear that some proposals that had been allowed by the SEC for decades, began to be omitted.”
Indeed, after many resolutions had already been filed, the SEC sharply altered its approach to shareholder proposals, changing its guidance on the kinds of proposals that can be excluded.
“Another factor in the drop in filings is that more companies engaged in dialogue with shareholders in order to avoid both the need for proposals and the related publicity that could draw attention to them given the current political attacks on DEI and climate,” the report said.
And, it noted that proposals have been withdrawn at a much higher rate this year. So far, there have been 78 proposals withdrawn this year, about 22% of the total, compared with 7.7% at this time last year.
“March and April often see a flurry of withdrawals before proxy statements are sent out, so it will be interesting to see if more companies elect to privately come to an agreement with or engage their shareholders in this incendiary political climate to avoid the public spotlight and how many resolutions are withdrawn to avoid being omitted under the new rules,” it said.
Looking ahead, the report said that the number of filings is expected to eventually rebound as shareholders adjust to the new climate, and revise their proposals to meet the new rules.
“Yet the larger political and legal attacks on sustainable investing, institutional investors, and proxy analysts does raises concerns that the SEC will take further actions to curtail shareholder rights and hinder shareholder proposals,” it said.
Of the ESG proposals that have been filed this year, climate change remains the top issue (85 proposals), with the majority focused on asking companies to report on climate transition plans and greenhouse gas reductions, the report said.
Climate issues were followed by proposals on corporate political influence (77), environmental management (52), human rights (37), and workplace diversity (36).
At the same time, the number of anti-ESG proposals also continues to grow, the report said.
“Most of these proposals are on social issues, targeting diversity, equity, and inclusion (DEI); political involvement; and corporate political influence,” it said, adding that anti-ESG proposals from state treasurers are a new development this year.
Yet, shareholder support for anti-ESG proposals remain very low, it said.
“That is particularly true for anti-DEI proposals which are overwhelmingly defeated by about 98% of the vote, putting investors at odds with the current anti-ESG political campaign and the executive orders issued by the White House that moved many companies to pull back on their DEI commitments and disclosure,” it said.
At the same time, ESG shareholder resolutions have seen declining support too, the report noted, with average support for pro-ESG proposals declining to 19.6% in 2024, down from 21.5% in 2023.
“Much of the decline in votes is attributable to the large asset managers no longer supporting ESG proposals and the attacks on taking material ESG risks into account,” it said.