Anti-ESG Shareholder in 2025

Companies and investors use information related to environmental, social or governance (“ESG”) factors to provide a company-wide view of sustainability and other priorities.  This includes how the company discloses, reacts to and manages ESG-related risks and policies, such as, for example, risks related to carbon emissions, as well as policies addressing diversity, shareholder rights and corporate social responsibility.  These topics are often the subject of shareholder proposals advocating additional disclosure or policies in furtherance of ESG-related goals.  In contrast, “anti-ESG proposals” are generally critical of, or question the value of, company policies or initiatives related to these topics.  As of the midpoint of the 2025 proxy season, “anti-ESG” proposals have become more common, a trend mirroring that seen in recent years.  In addition, proponents that, in past proxy seasons, submitted proposals on clearly anti-ESG topics, such as opposition to climate change-based initiatives, are now submitting proposals on a broader array of topics.

As of June 3, 2025, conservative proponents that traditionally submitted anti-ESG proposals had submitted an aggregate of approximately 120 shareholder proposals.  This is approximately the same number of proposals as were submitted by the same group of proponents during the 2024 proxy season.  Approximately 50 (45%) of the 2025 proposals have been voted on to date and, notably, just as in 2024, none of these proposals has received a majority shareholder vote.  About 15% have yet to be voted on, while the remaining approximately 40% were not subject to a shareholder vote, generally because they were withdrawn by the proponent or the company was permitted to omit the proposal via the U.S. Securities and Exchange Commission’s (the “SEC”) no-action request process.  Support levels for proposals ranged from a low of 0.20% to a high of almost 12%, with a median support level of 1.4%.  This is similar to the low of 0.03% support received in 2023; however, proposals received as high as approximately 36% support in 2024.  Notably, however, at the midpoint of the 2024 proxy season, anti-ESG proposals had received a median support level of approximately 1.5%, showing that support for these proposals overall remains steadily low year over year.

No-Action Requests Related to Anti-ESG Proposals

Pursuant to Rule 14a-8 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the SEC agrees that it will not take action against companies that omit shareholder proposals that meet certain criteria detailed in Rule 14a-8.  To date, in the 2025 proxy season, companies submitted approximately 55 no-action requests for proposals received from proponents that typical submit anti-ESG proposals.  This represents a significant increase from the approximately 40 requests submitted to the SEC staff (the “Staff”) during the 2024 proxy season. (more…)