US investors shun environmental proposals

Governance proposals enjoy greater support.

For the first time in six years, no environmental proposal was passed by shareholders in the US, according to a new report by The Conference Board.

Produced in collaboration with ESGAUGE, Russell Reynolds Associates, and the Rutgers Center for Corporate Law and Governance, the "2025 Proxy Season Review: From Escalation to Recalibration" report was based on public disclosure data from Russell 3000 companies as of 30 June. It found that both volume and support saw a decline when it came to climate-related proposals for 2025.

Filings-wise, the decrease stood at 26% whilst average support slipped to 10% from 2024's 18%. Similarly, a downward trend was observed in terms of how much of all the filings related to the environment. In 2024, climate-focused proposals accounted for 65% of filings; the corresponding slice this year was reduced to half.

The deepest dive, meanwhile, was recorded in human capital management proposals. In this area, filings fell by 35% whilst average support was at 9% – a slide from 15% previously. As for social proposals, passage improved despite a 23% shrinkage in filings volume.

Notably, governance proposals enjoyed a slight uptick in volume, from last year's 259 to 261 in the latest proxy season or annual period during which proxy materials are sent to investors ahead of shareholder voting. Governance proposals also posted the highest volume whilst receiving the strongest average support from investors, at 38%.

Overall, shareholder proposals were down 16% from 932 in 2024 to 781 this time around. Average support was at 23%, just a tad higher than last year's 22%.

Matteo Gatti, law professor at Rutgers Law School, commented: "Whilst support levels varied by topic, overall shareholder influence remained steady as many companies acted early to address investor priorities. These dynamics underscore the continuing importance of engagement in an environment of increasing regulatory complexity."

Meanwhile Ariane Marchis-Mouren, author of the report and senior governance researcher at The Conference Board, noted: "The heightened politicisation of ESG (environmental, social, and governance) issues and widespread regulatory uncertainty are making some investors more cautious.

"Rather than backing proposals that seem overly prescriptive or ideological, investors are focusing more on company-specific risks and direct engagement."