By Mary Minette
Mercy Investment Consultant

In proxy year 2025, shareholder proposal filings decreased from the previous year due to a variety of factors, including successful withdrawals in 2024; rising sentiment against the environmental, social, and governance (ESG) criteria for determining an organization’s social impact; and uncertainty about the Securities and Exchange Commission’s (SEC) approach to shareholder proposals in a new federal administration. 

The Interfaith Center for Corporate Responsibility (ICCR) estimates that member-filed shareholder proposals decreased 15 percent from the 2024 proxy season, with a 43 percent drop in climate proposals, a 38 percent decline in human rights and worker rights proposals, and a 25 percent drop in health-related proposals.

The rate at which companies challenged shareholder proposals at the SEC has also increased compared to previous years, due in part to a mid-year policy revision that included significant changes in how SEC staff interpreted the rules for the permitted content of proposals. In addition, the SEC invited companies to submit challenges even if the deadline to exclude a proposal from their proxy had expired at the time the new rules were issued.  

According to ICCR, about 17 percent of member filings were challenged in 2024, and nearly 47 percent of filings were challenged in 2025. The SEC allowed companies to omit 25 percent of the challenged proposals. 

In addition to these changes to the proposal process, the new SEC chair, Paul Atkins, has indicated that he would like to restrict or even eliminate the shareholder proposal filing process. A recent report from the Business Roundtable also supports substantial restrictions on shareholder proposals, claiming that they are time-consuming and costly to companies and often concern issues with no material financial impact. Finally, the legislature in Texas recently passed a law that will allow companies incorporated in that state to amend their by-laws to opt out of allowing shareholder proposals.

Companies are removing public disclosures on ESG programs and performance objectives to avoid being targeted by anti-ESG proponents. Other companies have announced rollbacks of climate commitments and diversity programs. Through dialogue, we have learned that many of these companies remain committed to progress in these areas, showing the importance of ongoing dialogue and strong relationships with companies to maintain progress on environmental and human rights issues.

The news is gloomy, but the Portfolio Advisory Board remains committed to our work in shareholder advocacy, engaging in dialogues with 42 companies and filing 10 shareholder proposals in the 2025 proxy season. We will continue to support the rights of shareholders to bring critical issues to the attention of the companies they own and to push companies to be transparent about their efforts to address issues such as human rights and climate change that pose a risk to their business, as well as to our communities and the Earth.

 

Feature image at top: "Shareholder" by 2210178venushree, CC BY-SA 4.0