Environmental-, social-, and governance-related shareholder proposals are down 34 percent this year as the Trump administration galvanizes the movement against “woke investing,” according to an annual report by the shareholder advocacy groups As You Sow and Proxy Impact.
The report counted 355 such proposals as of February 21, compared to 536 proposals filed by the same time last year. Wariness over anticipated changes at the Securities and Exchange Commission contributed to the decline, the authors said, as many investors opted to postpone resolutions until it became clear whether they would be blocked by new SEC leadership.
“We’re a little bit in a pause mode,” said Andy Behar, As You Sow’s CEO. He said a “right-wing crusade” against socially responsible investing has left shareholders in limbo as they figure out how to navigate the shifting political climate.
The term ESG — shorthand for an investment approach that prioritizes environmental, social, and governance issues — dates to 2004 and doesn’t have a fixed definition. Generally, it represents the idea that investors should buy shares in companies that factor social and environmental issues into their decision-making on the theory that such companies are more likely to prosper in the long run.
Investors promote ESG principles via shareholder resolutions, brief proposals that are put up for a vote by everyone who owns stock in a company during their annual meeting. These resolutions typically ask a company to issue a report about how some aspect of its operations, like its greenhouse gas emissions, may affect the company’s future profitability. All of the shareholder proposals submitted to a company during a given year are compiled onto a “proxy statement,” and the time of year when voting occurs — usually around May — is called proxy season.
Progressive critics of ESG have argued that the concept is so vague as to be meaningless, and that exaggerated claims of corporate responsibility are a distraction from the systemic reforms needed to address societal problems. But the more aggressive criticism has come from the political right, which sees corporate diversity and environmental policies as “woke” interference with capitalism.
These criticisms escalated during the Biden administration. In 2022, red-state regulators began naming and shaming financial institutions for an alleged “boycott” of fossil fuels companies and investigating big banks for their ESG practices. Last year, 17 red states passed legislation restricting corporate decision-making based on ESG priorities, and institutional investors like BlackRock grew more tepid in their support for ESG proposals.
President Donald Trump’s broad attacks on climate policy and diversity, equity, and inclusion initiatives have further chilled ESG efforts, inspiring several major banks to withdraw from a climate initiative in the lead-up to Inauguration Day.
Experts quoted in the As You Sow and Proxy Impact report said government attempts to limit ESG investing amount to an attack on shareholders’ right to make policy recommendations through proxy voting, guaranteed under the Securities and Exchange Act of 1934. “An anti-shareholder movement — often mislabeled as ‘anti-ESG’ — is silencing the voice of everyday investors in the U.S.,” reads one statement from Rick Alexander, CEO of the nonprofit The Shareholder Commons.
Behar said ESG opponents are unduly manipulating the market. “They don’t like capitalism, they don’t like free markets, they don’t like democracy,” he said. “This is problematic for all the shareholders who are trying to keep our companies proceeding into the future.”
Trump’s reelection has also prompted changes at the SEC, the federal agency charged with protecting investors and enforcing laws against market manipulation. It normally has five commissioners, no more than three of whom may belong to the same political party, but two of its Democratic members voluntarily stepped down after Trump was elected, and their seats are currently vacant. Two of the three sitting commissioners — one Republican and one Democrat — were nominated by Trump. The third, a Republican, was nominated by former president Joe Biden.
In February — after the majority of the ESG shareholder resolutions included in the report had been filed — the SEC announced two new policies that complicated these resolutions and could make it more difficult to file resolutions next year. First, the agency placed tighter deadlines and more onerous reporting requirements on large investors asking companies to, for example, disclose their climate risks or boost gender equality on their boards.
Second, the SEC made it easier for companies to exclude shareholder proposals from their proxy statements if those proposals were deemed not “significantly related” to their business. The SEC gave companies an extra opportunity to convince regulators to allow specific proposals to be excluded on the basis of this new policy, but it has not afforded investors a similar opportunity for additional explanation.
“It was clearly a biased decision stacked against shareholders,” said Michael Passoff, CEO of Proxy Impact and a co-author of the report.
In light of the growing anti-ESG movement, Behar said some companies have grown more willing to engage in dialogue with investors, perhaps hoping to avoid the publicity generated by a proxy vote. This, he said, is how shareholder advocates prefer to make change — by persuading companies to take action voluntarily in exchange for the withdrawal of a proposal. According to the report, 22 percent of ESG-related shareholder proposals were withdrawn as of February 21, compared to 7.7 percent at a similar time in 2024, suggesting that companies were negotiating behind the scenes with investors.
However, companies have also been emboldened to ignore shareholder proposals. One way to measure this is by looking at the number of “no-action” requests prompted by shareholder resolutions. These are requests companies make to the SEC asking for confirmation that the agency will not take action against them if they omit a proposal from their proxy statements. Even with fewer proposals filed as of early March this year, 221 had prompted no-action requests, compared to just 94 around the same time last year.
While the As You Sow and Proxy Impact report identified fewer climate- and environment-related shareholder proposals filed this season, the nature of those that were filed did not change much from previous years. The largest chunk ask companies for information about the decarbonization strategies or to reduce greenhouse gas emissions. Some new ones ask financial institutions to set investment ratio targets for clean energy infrastructure compared to fossil fuels; for insurance companies to report and reduce the climate pollution associated with their underwriting; and for mining companies to disclose their policies for deep-sea mining, in the absence of international rules governing this activity.
Frances Fairhead-Stanova, a shareholder advocate for the environmentally responsible mutual fund Green Century Capital Management, said the As You Sow and Proxy Impact report raises concerns that affect many shareholders. However, she reported that the presidential election results and anticipated changes at the SEC did not prompt her organization to file fewer resolutions. She noticed more no-action requests, but said it’s unclear whether the SEC will grant a greater proportion of them compared to previous years.
So far, Green Century has withdrawn 6 of the 27 climate- and environment-related resolutions it filed, in exchange for some sort of action or reporting. Starbucks, for example, agreed to share more information about its transition to reusable cups and to remove any recycling labels it deems misleading, following an internal assessment. TD Bank agreed to an audit of its board of governance policies with the aim of improving climate risk management.
Five companies filed no-action requests, and the SEC has rejected two of these. The others are still pending.
“We’re not panicked about any changes,” Fairhead-Stanova said. “We are just continuing to do our work.”
This story was originally published by Grist with the headline How Trump’s war on climate and equity is impacting ‘woke investing’ on Apr 9, 2025.
This content originally appeared on Grist and was authored by Joseph Winters.