Environmental, social, and governance (ESG) shareholder proposals have seen a significant decline this year, dropping by 34 percent compared to the previous year. This decrease has been attributed to the Trump administration’s efforts to combat what they refer to as “woke investing.” According to a recent report by shareholder advocacy groups As You Sow and Proxy Impact, only 355 ESG-related proposals were filed as of February 21, down from 536 proposals filed by the same time last year.
The report suggests that the uncertainty surrounding potential changes at the Securities and Exchange Commission (SEC) has led many investors to hold off on submitting resolutions until the implications of new SEC leadership become clearer. Andy Behar, CEO of As You Sow, described the current situation as a “pause mode,” with investors grappling to navigate the evolving political landscape shaped by a right-wing backlash against socially responsible investing.
ESG investing, which prioritizes environmental, social, and governance considerations, has gained traction in recent years as investors seek to support companies that demonstrate a commitment to sustainable practices. Shareholder resolutions play a crucial role in promoting ESG principles, with investors proposing resolutions during companies’ annual meetings to address various operational aspects such as greenhouse gas emissions and diversity policies.
Critics of ESG have argued that the concept lacks a clear definition and may serve as a distraction from broader systemic reforms needed to address societal challenges. However, the most vehement opposition to ESG principles has emerged from the political right, which perceives corporate diversity and environmental initiatives as unwelcome interference in free-market capitalism.
The anti-ESG movement gained momentum during the Biden administration, with red-state regulators targeting financial institutions for their alleged boycott of fossil fuel companies and scrutinizing big banks for their ESG practices. Last year, 17 red states passed laws restricting corporate decision-making based on ESG priorities, while institutional investors like BlackRock dialed back their support for ESG proposals.
President Trump’s anti-ESG stance further exacerbated the challenges facing ESG efforts, prompting major banks to withdraw from climate initiatives ahead of his reelection. Experts cited in the report emphasized that attempts to curtail ESG investing represent an assault on shareholders’ rights to make policy recommendations through proxy voting, a practice protected under the Securities Exchange Act of 1934.
The SEC, tasked with safeguarding investors and enforcing market regulations, introduced new policies in February that could complicate the filing of shareholder resolutions in the future. These policies include tighter deadlines and reporting requirements for large investors advocating for climate risk disclosures and gender equality initiatives. Additionally, the SEC made it easier for companies to exclude shareholder proposals deemed unrelated to their business, potentially limiting investor influence on corporate decision-making.
Despite these challenges, advocates for ESG investing remain committed to engaging with companies to drive voluntary change through dialogue and negotiation. By persuading companies to take proactive steps towards sustainability, shareholder advocates aim to effect meaningful change without resorting to contentious proxy votes. A recent report highlighted that 22 percent of ESG-related shareholder proposals were withdrawn as of February 21, indicating that companies were engaging in negotiations with investors behind the scenes. This represents a significant increase compared to the 7.7 percent withdrawal rate at a similar time in 2024.
The rise in withdrawn proposals suggests that companies are more willing to address ESG concerns raised by shareholders. However, it also points to a trend where companies are becoming bolder in ignoring shareholder proposals altogether. This is evident in the increasing number of “no action” requests submitted to the SEC by companies seeking confirmation that they can omit certain proposals from their proxy statements. Despite a decrease in the overall number of filed proposals this year, there were 221 no-action requests as of early March, compared to just 94 requests around the same time last year.
The report by As You Sow and Proxy Impact noted a decrease in the number of climate- and environment-related shareholder proposals filed this season. However, the content of these proposals remained consistent with previous years, focusing on decarbonization strategies, greenhouse gas emissions reductions, clean energy investment targets, climate pollution reporting by insurance companies, and deep-sea mining policies by mining companies.
Frances Fairhead-Stanova, a shareholder advocate at Green Century Capital Management, expressed concerns raised by the report, particularly in relation to shareholder interests. Despite potential changes at the SEC following the presidential election, Green Century continued to file resolutions at a similar rate. The organization observed an increase in no-action requests but remains uncertain about the SEC’s response to these requests.
Green Century has withdrawn six out of the 27 climate- and environment-related resolutions it filed, following negotiations with companies. For instance, Starbucks agreed to provide more information on its transition to reusable cups and address misleading recycling labels, while TD Bank committed to improving climate risk management through board governance audits.
While five companies filed no-action requests, the SEC has rejected two of them, with the remaining requests pending review. Fairhead-Stanova emphasized that Green Century remains committed to its advocacy work and is prepared to navigate any potential changes in the regulatory landscape.
Overall, the report sheds light on the evolving dynamics between companies and shareholders in addressing ESG issues, highlighting the importance of continued engagement and dialogue to drive meaningful change. “A Brief History of the Internet”
The internet has become an indispensable part of modern life, but its origins can be traced back to the 1960s. The concept of a global communication network was first proposed by J.C.R. Licklider, a computer scientist who envisioned a system that would allow researchers to share information and resources. This idea was further developed by the Advanced Research Projects Agency (ARPA), a branch of the United States Department of Defense, which created the ARPANET in 1969.
The ARPANET was the first network to use packet switching technology, which allowed data to be broken down into smaller packets and sent across multiple nodes before being reassembled at the destination. This made the network more robust and flexible, as it could automatically reroute traffic in the event of a failure.
Over the next decade, the ARPANET grew rapidly, connecting universities, research institutions, and government agencies across the United States. In 1973, the first international connections were established, linking the ARPANET to networks in the United Kingdom and Norway.
In 1983, the ARPANET was split into two separate networks: ARPANET and MILNET, the latter of which was used exclusively by the military. This division allowed for greater security and reliability, as military traffic could be isolated from civilian traffic.
The 1980s also saw the development of the Domain Name System (DNS), which allowed users to access websites using human-readable names instead of numerical IP addresses. This made the internet more user-friendly and accessible to a wider audience.
In 1990, Tim Berners-Lee, a computer scientist at CERN, created the World Wide Web, a system of interlinked hypertext documents that could be accessed over the internet. This revolutionized the way information was shared and accessed, paving the way for the modern web as we know it today.
The 1990s also saw the commercialization of the internet, as companies like AOL and CompuServe offered dial-up internet access to consumers. This led to a rapid expansion of the internet, with millions of new users coming online every year.
In the early 2000s, broadband internet became widely available, offering faster speeds and greater bandwidth than dial-up connections. This enabled the development of rich multimedia content, such as streaming video and online gaming, which further transformed the internet into a multimedia platform.
Today, the internet is an essential tool for communication, commerce, and entertainment. From social media to e-commerce, the internet has fundamentally changed the way we live and work. And with the advent of new technologies like 5G and the Internet of Things, the internet is poised to become even more integral to our daily lives in the years to come.
