Trump's Criticism of "Activist Investing" Stifles Voices of Climate-Oriented Stockholders
In the realm of investments, the approach prioritizing Environmental, Social, and Governance (ESG) issues has seen a significant change in the past few years. This transformation, influenced by regulatory shifts and political administrations, has led to a decline in ESG-related shareholder proposals.
The year 2022 marked a turning point, with the Securities and Exchange Commission (SEC) announcing two new policies that complicated ESG shareholder resolutions and made it more difficult to file resolutions the following year. This move was a response to the anti-ESG movement, which had gained momentum, promoting shareholder proposals critical of traditional ESG policies and supporting regulatory changes that limit the ability of shareholders to bring forward ESG resolutions.
The decline in ESG proposals is attributed to wariness over anticipated changes at the Securities and Exchange Commission. The composition and support of ESG proposals have shifted since then. Governance ("G") proposals, focusing on board structure and shareholder rights, remain more frequent and enjoy higher average support. In contrast, environmental and social ("E&S") proposals have decreased both in volume and shareholder backing.
The first use of the term ESG was in 2004, but it wasn't until the Biden administration took office in 2021 that ESG initiatives gained initial support. However, recent data from 2025 shows a substantial decline—about 30% fewer ESG shareholder proposals are being voted on at U.S. companies compared to previous years.
The decline in ESG proposals is not just a numbers game. The nature of the proposals that are being filed has also changed. Some new ESG-related shareholder proposals ask financial institutions to set investment ratio targets for clean energy infrastructure compared to fossil fuels. Others request insurance companies to report and reduce the climate pollution associated with their underwriting. Some even ask mining companies to disclose their policies for deep-sea mining, in the absence of international rules governing this activity.
Despite the challenges, some institutions like Green Century, an environmentally responsible mutual fund, are still pushing for change. They have withdrawn 6 of the 27 climate- and environment-related resolutions they filed, in exchange for some sort of action or reporting.
The Securities Exchange Act of 1934 guarantees shareholders' right to make policy recommendations through proxy voting. However, some argue that government attempts to limit ESG investing are infringing upon this right. Critics argue that ESG is vague and a distraction from systemic reforms, while the political right sees it as "woke" interference with capitalism.
This evolving regulatory and shareholder landscape reflects a complex interplay of political administrations, investor preferences, and the anti-ESG movement. As the debate continues, it's clear that the future of ESG investing remains uncertain.
| Administration | Regulatory Stance | ESG Shareholder Proposal Volume & Support
- In response to the political administrations' shifting stances, the Securities and Exchange Commission (SEC) implemented two new policies in 2022, complicating ESG shareholder resolutions.
- The year 2022 marks a turning point, with the anti-ESG movement gaining momentum, critical of traditional ESG policies and promoting regulatory changes to limit ESG shareholder resolutions.
- The decline in ESG proposals, both in volume and shareholder backing, is significantly noticeable, as shown by data from 2025, with about 30% fewer ESG shareholder proposals compared to previous years.
- Governance ("G") proposals, focusing on board structure and shareholder rights, continue to be frequent and enjoy higher average support in comparison to environmental and social ("E&S") proposals.
- New ESG-related shareholder proposals now focus on areas like clean energy infrastructure, climate pollution control, and deep-sea mining policies due to the decline in traditional ESG proposals.
- Green Century, an environmentally responsible mutual fund, is among those still pushing for changes, even exchanging 6 of their 27 climate- and environment-related resolutions for action or reporting.
