Rulemaking Petition-Factsheet

Formal Petition Regarding Amendments to Rule 14a-8

Under the Securities Exchange Act of 1934, Filed with the U.S. Securities and Exchange Commission, July 23, 2026

WHAT THE PETITION REQUESTS

The petition is filed under an SEC rule that invites shareholders to recommend changes to an SEC rule. The Petition asks that, if the SEC conducts a rulemaking on Rule 14a-8, it recalibrate rather than dismantle the rule. If the Commission proceeds with rulemaking, the petition reminds the SEC of its obligation under the Administrative Procedure Act to rigorously evaluate less harmful alternatives before any wholesale change. 

NO ACTION PROCESS RECOMMENDATIONS

The no-action process be retained with reforms to sharpen the review process machinery—clarifying timelines, promoting direct engagement between issuers and proponents, and thereby reducing unnecessary demands on Commission staff:

• establish a two-week engagement period after an issuer submits a notice of intent to exclude a shareholder proposal, during which the issuer and proponent may seek an agreement that potentially eliminates the need for a staff advisory opinion

• provide specific timeframes for proponents to respond to exclusion notices, and confirm that the staff will consider any timely proponent response when issuing an advisory opinion;

• extend the deadline for filing exclusion notices from 80 to 90 days, and clarify that the deadline runs from the earlier of the issuer’s proxy print deadline or its EDGAR filing deadline for the definitive Form DEF 14A; and

Set clear timeframes for a proponent to respond if a company requests a staff advisory opinion.

• Allow 14 business days for responses to procedural objections such as proof of ownership, and 30 calendar days for responses to substantive exclusions

Eliminate outdated paper copy submission requirements.

• Excise obsolete language in the existing Rule requiring the submission of six paper copies, reflecting the modern reality that all submissions are processed electronically.

RECOMMENDATIONS ON EVALUATING LESS HARMFUL ALTERNATIVES

In the event that the SEC proposes reforms to the shareholder proposal rule beyond the no action process, the petition reminds the SEC of its obligation to consider less harmful alternatives that would do less to disrupt the expectations and systems that the market has come to rely upon.  Such less harmful alternatives could include retaining the federal framework while leaving dispute resolution to the courts and evaluating the related cost of litigation that this approach would impose. Such evaluation would also consider approaches for reducing the subjectivity of the rules to reduce disputes between proponents and issuers.

Signatories of the petition

The signatories include New York State Comptroller Thomas P.  DiNapoli and organizations:  Ceres,  For the Long-Term, the Interfaith Center on Corporate Responsibility, Shareholder Rights Group, and US SIF

Rulemaking Petition regarding Amendments to Rule 14a-8 Under the Securities Exchange Act of 1934

July 23, 2026

Vanessa A. Countryman, Secretary

U.S. Securities and Exchange Commission

100 F Street, NE, Washington, DC 20549-1090

I. Introduction

The undersigned submit the following pursuant to 17 CFR § 201.192(a) (Rule 192(a) of the Commission’s Rules of Practice) and Section 553 of the Administrative Procedure Act.

Petitioners request that the Commission, in any rulemaking to amend Rule 14a-8 under the Securities Exchange Act of 1934 (“the Rule”), largely retain the Rule, which has, over the course of many decades established and refined a balance among issuers, proponents, and the voting shareholders whose capital is at stake.

The petition addresses both the no-action process as well as the underlying exclusion and procedural rules. We urge that both be retained and staff review be restored effective immediately.

In particular, in any rulemaking we urge that the no-action process be retained with consideration of reforms to sharpen the review process machinery—clarifying timelines, promoting direct engagement between issuers and proponents, and thereby reducing unnecessary demands on Commission staff. The amendments would:

• establish a two-week engagement period after an issuer submits a notice of intent to exclude a shareholder proposal, during which the issuer and proponent may seek an agreement that may obviate the need for staff review of the notice;

• provide specific timeframes for proponents to respond to exclusion notices, and confirm that the staff will consider any timely proponent response when issuing an advisory opinion;

• extend the deadline for filing exclusion notices from 80 to 90 days, and clarify that the deadline runs from the earlier of the issuer’s proxy print deadline or its EDGAR filing deadline for the definitive Form DEF 14A; and

• update the Rule to eliminate the archaic requirement that submissions be filed in paper copies.

Petitioners also recognize that Chairman Paul Atkins has signaled his intent for the Commission to abandon its role as an informal “referee” of the excludability of individual shareholder proposals and that the Division of Corporation Finance has paused review of most no-action requests. Therefore, while the petitioners believe that the no-action process should be retained and fully reinstated, the petition urges that any rulemaking not seek to limit the Commission’s role via a heavy handed wholesale rescission or other aggressive modification to the Rule without first rigorously evaluating less harmful alternatives including (a) limiting no-action letters to contested exclusion notices or significant policy matters or using other mechanisms, including those recommended in the petition to reduce the role of the staff or (b) retaining or refining the federal procedural and exclusion rules but leaving consideration of the validity of exclusion decisions to the courts. In the event it proposes substantial modifications or rescission of the no-action process or other elements of the Rule, the Commission should evaluate the impacts and costs associated with increased litigation already evidenced during the 2026 proxy season suspension, and how the existing substantive exclusions and procedures would function in the absence of Commission staff engagement on a proposal-by-proposal basis.

II. Statutory Authority

The Commission’s authority to adopt the requested amendments derives principally from Section 14(a) of the Securities Exchange Act of 1934 and the Commission’s broad authority to regulate corporate proxy statements in the public interest and for the protection of investors. The Commission has repeatedly affirmed its authority to establish and refine Rule 14a-8 in its various rule-making releases including Proposed Amendments to Rule 14a-8 Under the Securities Exchange Act of 1934 Relating to Proposals by Security Holders, Exchange Act Release No. 34-12598 (July 7, 1976), 41 Fed. Reg. 29,982 (proposed July 20, 1976) (to be codified at 17 C.F.R. pt. 240); Amendments to Rule 14a-8 Under the Securities Exchange Act of 1934 Relating to Proposals by Security Holders, Exchange Act Release No. 34-20091 (Aug. 16, 1983), 48 Fed. Reg. 38,218 (Aug. 23, 1983) (codified at 17 C.F.R. pt. 240); Shareholder Proposals Relating to the Election of Directors, Exchange Act Release No. 34-56161 (July 27, 2007), 72 Fed. Reg. 43,488 (proposed Aug. 3, 2007) (to be codified at 17 C.F.R. pt. 240); Substantial Implementation, Duplication, and Resubmission of Shareholder Proposals Under Exchange Act Rule 14a-8, Exchange Act Release No. 34-95267 (July 13, 2022), 87 Fed. Reg. 45,052 (proposed July 27, 2022) (to be codified at 17 C.F.R. pt. 240).

III. Interest of Petitioners

Petitioners include pension trustees and asset owners and organizations whose members or funds include individual investors and institutional fiduciaries—with long investment horizons and legal obligations to beneficiaries that make active stewardship not merely a choice but a duty. Many have filed shareholder proposals, and not all take the same perspective. All have relied on the proposal process as a practical tool for engaging companies on material risks, including through voting on shareholder proposals.

IV. Shareholder Proposals and the Rule 14a-8 Framework

Shareholders of public companies can submit proposals for consideration at annual meetings, providing a formal mechanism to influence corporate governance, strategy, and risk oversight. This process, which provides investors with important information about issues being raised by fellow shareholders, is made effective through the SEC’s proxy rules, particularly Rule 14a-8 (“the Rule”), which requires disclosure of eligible proposals in a company’s proxy statement so that shareholders are apprised of matters under consideration during the upcoming meeting and have an opportunity to vote on them through the proxy process. 

To qualify a proposal under the Rule, shareholders must meet specified ownership thresholds, hold shares for a defined period, and comply with procedural requirements such as submission deadlines and proof of ownership. Rule 14a-8 also establishes thirteen enumerated grounds on which companies may exclude proposals, designed to screen out proposals that would not be likely to be significant to investors. The exclusions include, among other things, proposals that fall outside proper shareholder authority under state law, relate to ordinary business operations, contain misleading information, duplicate or conflict with other proposals, lack relevance, have already been substantially implemented, or fail to meet resubmission thresholds. The burden of justifying exclusion of a proposal falls on the issuer receiving the proposal, which must submit to the Commission an explanation of its reasons. Rule 14a-8(g), Rule 14a-8 (j)(2)(ii).

V. Removing a “Cornerstone” would Destabilize Corporate Governance in the US

The Commission’s Spring 2026 Unified Regulatory Flexibility Agenda includes a rulemaking to modify Rule 14a-8.[1] The petitioners are aware that Chair Paul Atkins and Commission members have articulated that the rulemaking may severely circumscribe or even rescind Rule 14a-8. Such changes may include allowing state law or corporate bylaws to delineate whether and when a shareholder proposal would be included on the corporate proxy statement or even eliminating entirely the ability of shareholders to submit proposals for the corporate proxy statement. Moreover, Executive Order 14366 (issued December 11, 2025),[2] while focusing on the role of proxy advisors, also asked the SEC to evaluate curtailing environmental, social and governance shareholder proposals through an SEC rulemaking.

Rule 14a-8 creates value and manages risk for shareholders and their companies, and provides structural integrity for investor-company relationships.

The Commission has previously recognized in its July 2022 Proposing Release that:

The shareholder proposal process has become a cornerstone of engagement between shareholders and company management. Shareholder proposals provide an important mechanism for investors to express their views, provide feedback to companies, exercise oversight of management, and raise important issues for the consideration of their fellow shareholders in the company’s proxy statement. Moreover, investor support for shareholder proposal campaigns over the years has helped to shape many current corporate practices and policies, such as annual director elections, majority vote standards for director elections, and proxy access rights for shareholders.[3]

The petitioners believe that eliminating that cornerstone would destabilize corporate governance in America, removing a critical tool for board and management accountability to shareholders that investors rely upon in their investment and stewardship strategies.

The result would be the silencing of many shareholder proposals—and with them, lost value and risk management benefits—followed by an era of uncertainty and chaos in corporate governance, with more litigation, more opposition to director elections and pay packages, and a more adversarial relationship between investors and their companies.

The Commission has honed the Rule over the course of decades to balance the interests of issuers, proponents, and shareholders who vote on the proposals. The Commission should respect that balance, instead of upsetting market norms and expectations. This petition proposes modest adjustments to the shareholder proposal exclusion process to increase predictability and efficiency and limit demands on SEC staff resources. It also proposes that, if the SEC considers radical changes to the Rule, it first consider less harmful alternatives.

VI. The No-Action Process and Its 2026 Suspension

Since 1947, disputes over whether a proposal could be excluded have been addressed through the SEC’s no-action process. The process for staff consideration of shareholder proposal no-action requests was extensively described in the Commission’s 1976 release “Statement of Informal Proposals for the Rendering of Staff Advice with Respect to Shareholder Proposals.”[4]

When a company seeks to exclude a proposal, it submits a request to the SEC’s Division of Corporation Finance explaining the legal basis for doing so. Shareholder proponents may submit a response.

SEC staff then issue an informal no-action letter indicating whether or not they concur that the proposal may be excluded. Staff reasoning is typically brief often just a few sentences—either finding “some basis” for the company’s arguments and stating that the staff would not recommend enforcement action if the company excludes the proposal, or, if they disagree with the company’s arguments, stating that they are “unable to concur.” Staff need not address all bases for exclusion if they concur with the company on one. If staff concur, the company may omit the proposal from its proxy statement with a degree of regulatory assurance; if staff do not concur, most companies allow the proposal to proceed rather than risk enforcement action.

Only a court can definitively determine whether an exclusion is validly applied. Therefore, the informal staff opinions are nonbinding. Nevertheless, the shareholder proposal no-action process has historically provided a relatively fast and even-handed avenue for guiding company action and developing interpretive guidance under Rule 14a-8.

Provisions promulgated in Rule 14a-8 reinforce fairness in the conduct of this informal process:

• Rule 14a-8(k) provides that the proponent “should try to submit any response to [the SEC staff], with a copy to the company, as soon as possible after the company makes its submission. This way, the Commission staff will have time to consider fully [proponent’s] submission before it issues its response.”

• Rule 14a-8(g) provides that “Except as otherwise noted, the burden is on the company” to persuade the Commission or its staff that it is entitled to exclude a proposal.

November 2025 Announcement

In November 2025, the SEC’s Division of Corporation Finance issued a statement announcing a policy applicable to the 2026 proxy season on how staff will assess and respond to company notifications under Rule 14a-8(j).[5] Under this policy, which was reportedly justified by a 2025 government shutdown that strained SEC staff resources, a company intending to exclude a shareholder proposal was still required to notify the Commission pursuant to Rule 14a-8(j), but the staff would not respond to the request or express any view on the company’s intended basis for exclusion. The Division reserved a single exception: where a company seeks to exclude a proposal under Rule 14a-8(i)(1) as an improper subject for shareholder action under state law.

To the extent that a company wanted a written response from the SEC regarding its exclusion notice, the policy provided for the staff to issue a letter, when requested by a company, stating that, based solely on the company’s or counsel’s unqualified representation and without evaluating its merits, it would not object to the omission of the proposal.

This no-objection process departed from the explicit terms of Rule 14a-8 in two distinct ways:

• In issuing such “no objection” letters staff failed to accommodate and consider the proponent’s perspectives, a clear departure from the intent of Rule 14a-8(k);

• The staff did not place the burden of persuasion on the company, instead accepting the company’s perspective without evaluating its persuasiveness, which is wholly inconsistent with Rule 14a-8(g).

Implementation of Rule 14a-8 by the Commission and the affected parties has historically depended on a combination of administrative oversight, evolving staff interpretation, and iterative dialogue between companies and investors. With the administrative layer removed during the 2026 proxy season interpretive authority shifted directly to issuers and the courts. Dispute resolution over exclusions migrated to litigation and market pressure.

An analysis of the impacts of withdrawing the no-action process during the 2026 proxy season demonstrated that the results were not neutral.[6] Instead:

• Proposals were disadvantaged that sought to surface emerging issues such as the role and risks of AI because there was no applicable staff guidance for application by issuers and proponents.[7]

• Proposals revised in form to comport with historical staff guidance on issues like micromanagement were not honored by receiving companies, leading to the exclusion of proposals that, in the normal course of the no-action process, would have been re-evaluated for consistency with the rules.

• Issuers excluded proposals based on a risk assessment of whether they were likely to be subject to an injunctive suit by the proponent. In particular, issuers assessed that smaller shareholders with fewer resources were less likely to sue, rendering their proposals more easily excludable. Petitioners conclude that the abandonment of the no-action process was neither beneficial, in the public interest, nor consistent with the SEC’s mission to protect investors and maintain fair, orderly, and efficient markets.

• Companies requested and received no-objection letters for proposals on topics for which the staff had consistently over the years refused to concur in a company’s analysis as a basis for exclusion, such as those relating to political spending.

• Six lawsuits were filed by proponents seeking injunctive relief to include proposals on the proxy.

The suspension created chaos, not efficiency. Investors who had satisfied every requirement to file a proposal, but who lacked the litigation budget to fight for inclusion in court, were effectively silenced. Issuers fared no better: stripped of substantive SEC guidance, many chose the path of least resistance and included proposals they might have legitimately excluded, simply to avoid the litigation risk of guessing wrong.

The “no objection” letters that replaced substantive review made matters worse. They permitted companies to exclude proposals without presenting evidence (the exact opposite of what the Rule requires) while proponent submissions went unread. The Division’s policy did not merely or appropriately conserve staff resources dedicated to Rule 14a-8. In effect, it repealed a fundamental element of the rule.

Additionally, issuer behavior and outcomes from the most recent proxy season cannot be treated as determinative or predictive of how a permanent system lacking the no-action process would operate going forward. Companies this season were responding to a temporary suspension under conditions of considerable uncertainty; under an established regime without a neutral referee, issuers would likely grow far more aggressive in pursuing exclusions.

VII. Recommended Reforms to the Exclusion Notice Process

The suspension of the no-action process has highlighted areas in which the Rule can be improved for the benefit of both issuers and proponents—including encouraging the parties to resolve more of these disputes prior to SEC staff review. These improvements would reduce costs, ensure the Rule’s provisions are upheld, and restore an orderly, efficient no-action process.

This petition recommends technical reforms to ensure that Rule 14a-8 procedures and proposal exclusions align with the intentions of the Rule, provide clarity to the parties, and update the exclusion process to reflect common modern practices.

Our recommended changes (set forth in Appendix A) would accomplish the following refinements to the shareholder proposal exclusion process:

1.      Modify the requirements for company submissions of exclusion notices.

a. Change the deadline for filing an exclusion notice from 80 to 90 days. Specify that this deadline must be calculated in advance of the company’s print deadline or proxy filing, whichever occurs earlier. This rectifies a problem that has emerged in recent years where the window for staff review of an exclusion request has been truncated by accelerated company deadlines for printing proxy statements which precede the formal date for submission of the proxy form for EDGAR.  

b. Establish a mandatory two week engagement window for the proponent and issuer to seek a negotiated agreement in the two weeks after submission of the exclusion notice, potentially eliminating the need for a staff advisory opinion.

c. Guarantees that the staff advisory opinions issued after the engagement window continue to place the burden of persuasion squarely on the issuer to present concrete evidence supporting the excludability of the proposal. This procedural safeguard precludes the issuance of “no objection” letters based on the unqualified representations of issuers while ignoring rebuttal evidence from proponents.   

2.      Set clear timeframes for a proponent to respond if a company requests a staff advisory opinion:

a. Allow 14 business days for responses to procedural objections (such as proof of ownership) and 30 days for responses to substantive exclusions.

b. Reinforce that the staff must consider timely submitted proponent perspectives before issuing any advisory opinion.

3.      Eliminate outdated paper copy submissions requirements:

a. Excise obsolete language in the existing Rule requiring the submission of six paper copies. This would reflect the modern reality that all submissions are now processed electronically.

In addition, to the extent that the Commission proposes rescinding the no-action process, we recommend that it consider less harmful alternatives, including our proposed refinements that would reduce the demands on staff time. Other less disruptive alternatives to reduce the resource demand of the no-action process have also been successfully deployed by the staff in prior instances and should be evaluated in lieu of outright rescission of the no-action process. Notably, from 2019 to 2022, the Division of Corporation Finance staff successfully utilized a summary tracking chart[8] to record its perspective on the excludability of individual shareholder proposals for which it had received exclusion notices, but only issuing no-action letters stating a rationale in a limited number of matters where the staff identified a pressing need to clarify a specific interpretive position. This and similar resource saving alternatives must be evaluated as viable options rather than revoking the highly valued no-action process entirely.

VIII. Alternatives to Eliminating the Substantive Framework and Procedures of Rule 14a-8

We are advised that the Commission may also, beyond revoking the no-action process, consider more severe changes to the shareholder proposal rule, such as deferring entirely to state law or corporate bylaws rather than maintaining consistent federal exclusions and procedures. Doing so would severely undermine this cornerstone of U.S. corporate governance, creating unacceptable regulatory uncertainty and litigation risk for both proponents and issuers, and create impediments for access to the Rule for smaller shareholders.

If the Commission issues such a proposed rulemaking rescinding or severely curtailing Rule 14a-8, we urge the Commission to also evaluate alternatives that maintain the federal rules while eliminating the no-action process. This evaluation should include consideration of whether the current rules provide sufficient clarity, or could be refined to be more objective to avoid the need for litigation. It should also consider the potential role of engagement to promote modification or withdrawal of proposals, which would reduce the need for the no-action process.

Outright rescission of Rule 14a-8 would upset a longstanding balance between investors and their companies built around the Rule’s exclusions and procedures for submitting shareholder proposals that appear on corporate proxy statements. For example, the relevance exclusion, Rule 14a-8(i)(5), considered and refined by the Commission over numerous administrations, screens for materiality to the specific issuer, relieving companies of an obligation to respond to, and protecting shareholders from consideration of, trivial or irrelevant proposals. The resubmission exclusion, Rule 14a-8(i)(12), considers the voting outcomes from the previous years and spares shareholders and the board from perennial re-litigation of proposals that have garnered only minimal support. The eligibility thresholds for filing proposals set the entry price, demanding a genuine and durable stake before the Rule may be invoked.

The Rules provide a low-cost and uniform mechanism for proposal access across every public company. Shareholders have an impressive record of deploying this process to elevate corporate consideration of substantial near and long-term risks. Shareholder proposals often raise critical issues that the board or management might otherwise neglect, helping to counteract the natural proclivity of corporate boards and managers to bury issues that could be of concern to investors. As financial economist Michael C. Jensen observed, corporate reporting and market communications are often shaped by incentives to meet or beat market expectations rather than to present a full account of risk.[9] Former SEC Chairman Arthur Levitt similarly warned in 1998 that the drive to satisfy earnings expectations could displace faithful representation with “a game of nods and winks.”[10] Management is often incentivized to short-term profit and setting strategy accordingly, while ignoring long-term risks. These concerns remain salient today, and shareholder proposals play an important role in counteracting positive spin or corporate concealment that can range from mere puffery to greenwashing and securities fraud.[11]

Proposals have called attention to company mismanagement and poor governance, warned of company-related financial collapses, public health crises, environmental failures, labor violations, failure to demonstrate that the interests of investors are being adequately considered and addressed. They have also successfully pushed to improve the governance of emerging technologies that will be central to the 21st century. In doing so, these shareholder proposals identified material risks that management had failed to adequately address before the ultimate costs to shareholders and the company became catastrophic and undeniable.[12]

Eliminating the Rule would harm investors and markets that rely upon consistent standards and procedures for placing proposals on proxies across public companies. It would inevitably create a Tower of Babel comprised of fragmented, conflicting filing and technical requirements spanning disparate state corporate laws and idiosyncratic company bylaws. Interpretation and enforcement would become entirely dependent on the slow, costly machinery of private litigation and evolving inconsistent judicial interpretations. This would suppress the availability of the proposal process and severely reduce transparency on material investor concerns. Costly litigation would permanently destabilize the established working relationships on which issuers and investors rely. Any rulemaking to significantly alter the Rule must fully account for the systemic harm inflicted on the market and exhaustively consider less harmful alternatives, as requested by this petition.

Conclusion

The right to file a shareholder proposal that appears on the corporate proxy statement is not a courtesy extended by management. It is a foundational aspect of corporate ownership. Shares carry voting rights, and under long-established corporate and federal frameworks, those voting rights have long included the ability to put hard questions—about strategy, risk, and disclosure—before fellow owners. Because these proposals are advisory, they do not overrule management. Instead, they inform it, pressure it, and aggregate the judgment of the people whose capital is at risk. This voice is also a source of market efficiency. Engaged owners surface information, press for crucial disclosures that let the whole market price risk more accurately, and discipline managers who would otherwise be insulated from accountability. Empirical evidence on shareholder engagement demonstrates that successful, well-targeted engagements lead to positive abnormal returns at targeted firms, while unsuccessful ones are not value-destructive.[13] Curtailing that voice weakens one of the few mechanisms through which dispersed owners can hold management to account.

The reforms in this petition are narrow, practical, and overdue and will  protect a right that has stood for over 80 years. The Commission should adopt them and reject other ideas that would eliminate or harmfully modify this important SEC rule.

Sincerely,

Steven Rothstein
Chief Program Officer, Ceres

Dave Wallack
Executive Director, For the Long Term

Josh Zinner
Chief Executive Officer, Interfaith Center on Corporate Responsibility

Thomas P. DiNapoli
New York State Comptroller

Sanford Lewis
Director, Shareholder Rights Group

Bryan McGannon
Managing Director, US SIF

[1]https://www.reginfo.gov/public/do/eAgendaViewRule?pubId=202510&RIN=3235-AN47 (“The Division is considering recommending that the Commission propose rule amendments to modernize the requirements of Exchange Act Rule 14a-8 to reduce compliance burdens for registrants and account for developments since the rule was last amended.”).

[2]https://www.whitehouse.gov/presidential-actions/2025/12/protecting-american-investors-from-foreign-owned-and-politically-motivated-proxy-advisors/

[3] Substantial Implementation, Duplication, and Resubmission of Shareholder Proposals Under Exchange Act Rule 14a-8, Exchange Act Release No. 34-95267 (July 13, 2022), 87 Fed. Reg. 45,052 (proposed July 27, 2022).

[4] Statement of Informal Procedures for the Rendering of Staff Advice With Respect to Shareholder Proposals, Exchange Act Release No. 34-12599 (July 7, 1976), 41 Fed. Reg. 29,989 (July 20, 1976).

[5]https://www.sec.gov/newsroom/speeches-statements/statement-regarding-division-corporation-finances-role-exchange-act-rule-14a-8-process-current-proxy-season

[6]https://static1.squarespace.com/static/5d1f9923ca0f4800011d443a/t/69eff37e7fe4671d80fc6256/1777333118857/
SRG+Report+Final+04.27+%2B+website+link.pdf

[7]Id. at 13. Overall, 28% of exclusions in the 2025–2026 season asserted an (i)(7) ordinary business basis. In a majority of those—roughly 64%—companies excluded proposals even though prior SEC staff precedent did not clearly resolve whether exclusion was appropriate.

 That 64% category is not uniform. It consists predominantly of two types of proposals that have historically required staff interpretation: (1) revised proposals that build on earlier models but modify language or scope, often to respond to prior SEC guidance or staff determinations on issues such as micromanagement, and (2) novel or innovative proposals that introduce new topics or structures not previously addressed by staff decisions.

[8]https://www.sec.gov/divisions/corpfin/shareholder-proposals-2019-2020.pdf

[9]https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1894304

[10]https://www.sec.gov/news/speech/speecharchive/1998/spch220.txt

[11]https://business.rice.edu/wisdom/companies-talk-more-clearly-when-business-booming

[12]https://www.iccr.org/reports/shareholder-proposals-an-essential-investor-right/

[13]https://www.researchgate.net/publication/253236822_Active_Ownership

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Appendix A: Proposed Markup

(j) Question 10: What procedures must the company follow if it intends to exclude my proposal?

(1) If the company intends to exclude a proposal from its proxy materials, it must file its reasons with the Commission no later than 80 90 calendar days before the earlier of its print deadline or the date it files its definitive proxy statement and form of proxy with the Commission. The company must simultaneously provide you with a copy of its submission. The Commission staff may permit the company to make its submission later than 80 90 days before the company files its definitive proxy statement and form of proxy, if the company demonstrates good cause for missing the deadline.


(2) The company must file six paper copies of submit the following:

(i) The proposal;

(ii) An explanation of why the company believes that it may exclude the proposal, which should, if possible, refer to the most recent applicable authority, such as prior Division letters issued under the rule; and

(iii) A supporting opinion of counsel when such reasons are based on matters of state or foreign law.

The two calendar weeks after submission of a no-action request is considered the engagement period, in which the parties have an opportunity to engage and converge on an agreement for withdrawal of the no-action request.

If the engagement period ends without agreement, SEC staff may review the parties’ submissions and issue an advisory opinion—including but not limited to all instances in which the issuer and proponent have raised contested issues that require resolution.

(k) Question 11: May I submit my own statement to the Commission responding to the company’s arguments?

Yes, you may submit a response, but it is not required. The staff will consider your submission as well as the company’s. After the company makes its submission you should try to submit any response to us, with a copy to the company, within 14 business days of receipt of the exclusion notice for any procedural objection such as proof of ownership, and within 30 days to respond to any of the enumerated exclusions as soon as possibleafter the company makes its submission. This way, the Commission staff will have time to consider fully your submission before it issues its any response. You should submit six paper copies of your response.

Investor Coalition, NY Comptroller Petition SEC to Fix – Not Gut – Shareholder Proposal Rule

July 23, 2026

For media inquires please contact Esperanza@focalpointstrategygroup.com

 Petition urges Commission to adopt practical reforms that streamline the no-action process and evaluate less disruptive alternatives before considering major changes to Rule 14a-8

WASHINGTON, D.C. — A coalition of investor groups and New York State Comptroller Thomas P. DiNapoli filed a rulemaking petition today urging the SEC to recalibrate, rather than dismantle, Rule 14a-8, the federal rule governing shareholder proposals on corporate proxy statements.

The petition responds directly to SEC Chairman Paul Atkins, who told the Society for Corporate Governance recently that this season's suspension of staff review of company arguments for excluding proposals cut resource demands and suggested he may make that suspension permanent. Atkins has also floated shifting shareholder proposal oversight to state law or company bylaws, and a White House Executive Order suggested SEC consideration of scrapping the rule outright.

The petitioners - DiNapoli, Ceres, the Interfaith Center on Corporate Responsibility, the Shareholder Rights Group, US SIF, and For the Long Term - argue that if the SEC is going to do a rulemaking, there's a more efficient fix that doesn't require abandoning investor protections.

Two core asks:

1. Streamline the proposal exclusion process before it reaches the SEC. The petition calls for a mandatory two-week engagement window after a company issues an exclusion notice, clear response deadlines for proponents, modestly extended filing windows, and an end to obsolete paper-filing requirements — changes meant to resolve more disputes privately and make SEC review faster when it is needed.

2. Require the SEC to test less drastic options first. Before rescinding the no-action process, handing oversight to state law, or otherwise gutting Rule 14a-8, the petition says the Commission is obligated under the Administrative Procedure Act to evaluate less harmful alternatives — including the procedural fixes above.

The petition cites this year's experience as the cautionary tale: with substantive no-action review suspended, costs didn't disappear, they moved — onto investors and companies navigating more uncertainty, inconsistent outcomes, and litigation. As the filing puts it: "The suspension created chaos, not efficiency."

Alongside the petition, investors also filed:

• Citizen petitions with nearly 32,000 signatures opposing rescission of the rule

• A FOIA request (Shareholder Rights Group and Democracy Forward) seeking records on the SEC's reported "previewing" of rulemaking plans with select constituencies

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U.S. Senator Elizabeth Warren (D-MA): “Rescinding SEC Rule 14a-8 would be another giveaway to corporations and their executives at the expense of workers and retirees. From preventing shareholders from bringing lawsuits on company misconduct to rolling back disclosures key to investors, President Trump’s SEC seems more interested in stifling ordinary investors’ voices than protecting their rights.”

Sanford Lewis, Director, Shareholder Rights Group: "Good regulation starts with solving the right problem. If the Commission's objective is to reduce demands on staff resources, there are practical ways to accomplish that without abandoning a regulatory framework that has served investors, companies, and the markets for decades."

New York State Comptroller Thomas DiNapoli: "For more than eighty years, shareholder proposals have been a critical tool for investors to hold boards and management accountable. The right to include shareholder proposals on corporate proxies has driven reforms that strengthened American companies and protected shareholder value. Suspending the no-action process shifted costs onto investors and companies and fostered uncertainty, inconsistency, and litigation. We’re offering the SEC a better option: targeted fixes that ease the burden on staff while keeping a neutral referee on the field. That’s good for shareholders and good for the companies we invest in.”

Illinois State Treasurer Mike Frerichs: "Ultimately, weakening or taking away the shareholder proposal process is not going to make the sustainability risks for companies go away. It’s just going to make it harder for shareholders to raise them," Illinois State Treasurer Michael Frerichs said. "So naturally I am concerned that eliminating the 14a-8 process would reduce the rights of shareholders and limit our ability to engage companies facing material sustainability risks."

Dave Wallack, Executive Director, For the Long Term: "Long-term investors need functioning institutions. The choice before the SEC is not between efficiency and investor rights—it's between thoughtful modernization and unnecessary disruption. Before abandoning a framework that has served our capital markets for decades, the Commission should fully evaluate the practical, lower-cost alternatives already on the table."

The petition calls its recommendations "narrow, practical, and overdue," and comes as the SEC weighs potential Rule 14a-8 amendments on this year's agenda.

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About For the Long Term

For the Long Term (FTLT) is a nonpartisan organization dedicated to strengthening the institutions, leaders, and policies that drive long-term economic growth and prosperity. FTLT works with state financial leaders, institutional investors, and market participants to advance practical solutions that promote long-term value creation, effective stewardship, and resilient capital markets. Through convenings, research, and strategic partnerships, FTLT helps public officials and investors navigate emerging challenges—from technological change and demographic shifts to corporate governance and economic competitiveness—while building the capacity of those entrusted with managing public resources. FTLT believes that strong institutions, informed leadership, and a long-term perspective are essential to ensuring that American markets remain the most dynamic, innovative, and trusted in the world.

Additional Quotes

“Our nation's capital markets system works best when investors and companies work together. The shareholder proposal process is an essential tool that allows investors to have direct dialogue with company management about material risks to the business. Rolling back this process will cause immense harm to our capital markets and will undermine investors' freedom to engage with the companies they own.” Andrew Collier, Senior Director, Freedom to Invest, Ceres. Phone: 202-774-0171. Email: acollier@ceres.org 

About Ceres 

For more than 35 years, Ceres has been at the forefront of building business leadership and supporting innovative market and policy solutions to address the world’s most pressing sustainability issues. We work with investors, companies, and policymakers to advance actions that reduce emissions and build a cleaner, more resilient economy – all in a way that advances justice and equity.

“ICCR has been deeply concerned about the ways this proposed attack on shareholder rights could impact our members and the wider landscape of corporate governance and accountability. These changes being suggested by the administration would undermine a tool that generations of Americans have come to depend upon to safeguard the long-term value and viability of their investments. At a time of growing unease about the condition and direction of the U.S. economy, Chair Atkins should be seeking to strengthen rather than undermine investor protections.”  Josh Zinner, CEO, ICCR email: jzinner@iccr.org 

 About the Interfaith Center on Corporate Responsibility (ICCR)

The Interfaith Center on Corporate Responsibility (ICCR) is a broad coalition of more than 300 institutional investors collectively representing over $4 trillion in invested capital. ICCR members, a cross-section of faith-based investors, asset managers, pension funds, foundations, and other long-term institutional investors, have over 50 years of experience engaging with companies on environmental, social, and governance (“ESG”) issues that are critical to long-term value creation.  ICCR members engage hundreds of corporations annually in an effort to foster greater corporate accountability. Visit our website www.iccr.org and follow us on LinkedIn, Bsky Social, and Facebook. 

"Shareholder proposals help investors identify risks before they become larger problems. Making it harder for shareholders to question management does not make those risks disappear. It simply makes it harder for companies, boards, and investors to see them." Jonas Kron, Chief Advocacy Officer, Trillium Asset Management, LLC email:jkron@trilliuminvest.com

About Trillium Asset Management, LLC

Trillium Asset Management offers investment strategies and services that seek to advance humankind towards a global sustainable economy, a just society, and a better world. For over 40 years, the firm has been at the forefront of ESG thought leadership and draws from decades of experience focused exclusively on responsible investing. Devoted to aligning stakeholders’ values and objectives, Trillium combines impactful investment solutions with active ownership.

“Communication between investors and their portfolio companies is mutually beneficial. Restricting investors' ability to express their preferences directly —through filing or voting on shareholder proposals — will produce votes against directors that convey no clear or constructive signal to the companies." Elizabeth R. Levy, CFA, Managing Director, Clean Yield Asset Management email:liz@cleanyield.com 

About Clean Yield Asset Management

For more than 40 years, Clean Yield Asset Management has used the power of investing to meet the financial goals of our clients while moving society toward a more just and sustainable future. Clean Yield works with individuals, families, family trusts, foundations, and aligned nonprofit clients to implement an investment strategy aligned with their progressive values. Our strategies ensure that our clients' investments are not only financially rewarding but also aligned with their values and contributing to a more sustainable world.

“The shareholder proposal process benefits the entire capital market value chain, not just proponents. Shareholder proposals are one of the few formal mechanisms investors have to raise material governance and risk issues directly with boards. The process is an efficient means to surface existing and emerging risks and increases transparency leading to better investment decision making.” Bryan McGannon, Managing Director of US Sustainable Investment Forum bmcgannon@ussif.org

US SIF Sustainable Investment Forum

They are the preeminent voice advancing sustainable investing. Members, who represent $5 trillion in assets under management or advisement, support US SIF’s mission to rapidly shift investment practices toward sustainability, focusing on long-term investment, the generation of positive social and environmental impacts and supporting the shift toward a more resilient and equitable planet and society. https://www.ussif.org

Shareholder Proposals and Corporate Governance in a Season of Regulatory Uncertainty

Access the full text here.

Executive Summary

In the 2026 proxy season, the Securities and Exchange Commission (SEC) Division of Corporation Finance upended a long-standing practice of issuing informal decisions on whether shareholder proposals are excludable by the companies receiving them.

Although the SEC shareholder proposal rule, Rule 14a-8, remained in force, the SEC’s administrative dispute resolution mechanism—neutral staff review through the no-action process—was gone. The Division cited resource constraints and the sufficiency of existing guidance to justify suspending the no-action process for the current proxy season. As it stated on November 17, “due to current resource and timing considerations… as well as the extensive body of guidance from the Commission and the staff available to both companies and proponents… the Division has determined to not respond to no-action requests…”  How did these changes affect the ability of shareholders to use the proposal process to raise potentially material issues with their companies and fellow shareholders? How did the SEC’s absence as a neutral arbiter of exclusion claims affect how issuers and proponents behaved? How did it affect the efficiency and effectiveness of the shareholder proposal process as a means of placing important questions before shareholders on corporate proxy statements? This analysis examines how the shareholder proposal process functioned during the 2025–2026 proxy season to identify patterns in how companies and shareholders navigated the process in the absence of routine staff review, to assess issues of fairness, balance, and efficiency and to make recommendations based on the lessons from the season.

The data indicate a chilling effect on both proponents and issuers. Shareholders filed approximately 20% fewer proposals for the 2026 season. Companies filed over 100 fewer exclusion notices.

Many companies, it seems, made a prudent judgment: without SEC staff guidance on individual proposals, unilateral exclusion carried too much risk, including proponent litigation, reputational risk, potential fuel for a proxy fight over director elections, and other concerns. Rather than exploit the absence of oversight, many companies receiving proposals let the proposals go to the proxy, sometimes even explicitly citing the lack of SEC guidance as their reason for including proposals they believed might otherwise be excludable. Other companies similarly situated engaged with proponents to produce settlement agreements.

The rate at which proposals were excluded by companies in proportion to the number of proposals filed, in the absence of the SEC’s informal determinations, was similar to the rate excluded last year after SEC determinations. Yet, analysis of these exclusions revealed several important trends.

Comparison of 2025 and 2026 Process Outcomes

One of most common justifications for excluding proposals was the ordinary business rule—a determination that typically turns on subjective factors and has historically benefited from substantive SEC staff evaluation. Unfortunately, the largest portion of these exclusions clearly disadvantaged proponents who were either filing proposals on emerging risks on which staff had not previously opined or had refined a prior proposal’s language to address prior SEC staff concerns about prescriptive language. In both categories, the absence of SEC involvement undermined an orderly process and fair resolution of disputes over excludability, allowing exclusions to proceed despite the lack of staff guidance.

This exclusion trend is particularly troubling for proposals addressing an issue on which the staff has never opined. Even if the proposal concerned a significant emerging risk, exclusion could proceed despite the lack of staff guidance.

For example, at proposal at Amazon requesting company-specific disclosure of workforce risks tied to evolving U.S. immigration policy was excluded despite the absence of prior staff guidance on the topic. Proponents sought analysis of how recent and anticipated changes to immigration rules—particularly those affecting H-1B visa holders, warehouse labor, and truck drivers—could disrupt workforce, logistics capacity, and operating costs. Given the scale of Amazon’s workforce and reliance on these labor segments, this is an issue that a reasonable investor could view as financially material and decision-useful, yet the proposal was excluded without the benefit of any staff position addressing similar subject matter.

Similarly, on a year-to-year basis, the SEC sends signals to proponents and issuers regarding whether proposal language is too prescriptive, allowing proponents to revise proposals accordingly. This iterative feedback loop aligns proposal drafting with evolving staff interpretations. However, in the 2026 proxy season, such revisions were not ratified by staff review. As a result, issuers exercised unilateral discretion, and even proposals that may have been revised in good faith to conform with prior SEC guidance were nevertheless excluded.

For example, at AbbVie Inc., shareholders requested that the board oversee human rights due diligence to produce an impact assessment identifying actual and potential adverse human rights impacts in the company’s operations and supply chain, including effects on the right to health. Notably, this proposal appears to have been drafted to be less prescriptive than a prior 2025 proposal seeking a human rights impact assessment submitted to Eli Lilly, which the staff had permitted to be excluded on micromanagement grounds. The Eli Lilly proposal explicitly mandated the assessment cover “operations, activities, business relationships, and products”. By contrast, the AbbVie proposal narrowed and generalized the request—focusing on board oversight and an impact assessment framework rather than dictating exhaustive coverage parameters. Despite this apparent effort to align with prior staff reasoning and reduce prescriptiveness, AbbVie relied on the earlier Eli Lilly determination to justify exclusion. This illustrates how, in the absence of updated staff review, even materially revised proposals that address prior deficiencies can be excluded based on inapposite precedent.

Thus, an analysis of the ordinary business exclusions reveals that exclusions during this season disproportionately blocked (i) proposals addressing emerging issues lacking precedent and (ii) proposals that had undergone compliance-oriented revisions based on prior staff signals. The absence of no-action letters was therefore not neutral—it both impeded shareholders’ ability to surface new, financially relevant risks and disrupted the established corrective process that typically refines proposal language over time.

In another significant portion of exclusions, the companies claimed that their own activities substantially implemented the proposal. SEC staff is better positioned to provide a neutral evaluation of whether the company activities go as far as a proposal requests. These determinations are not appropriately left to the issuers.

Technical grounds—such as providing inadequate documentation that the proponent owned the necessary shares, or missing filing deadlines—accounted for another meaningful portion of exclusions. Some of these deficiencies seemed clear-cut. But without a structured opportunity for proponents to respond, questions remained about whether some of these technical exclusions rested on incomplete or disputed records that SEC staff would historically have scrutinized.

The disappearance of routine administrative review also caused at least six proponents to bring their disputes into federal court. Three of these cases resolved quickly after the companies agreed to include the proposals or provide the requested disclosure. These cases underscore how, in the absence of staff intermediation, formal legal action began to substitute for what had previously been an administrative and negotiated process. As proponent driven litigation became the primary enforcement mechanism for Rule 14a-8, a structural imbalance also took shape: the ability to defend a proposal increasingly depended on having the financial and legal resources to sue, in contradiction of the rule’s share ownership thresholds—which were designed to give even modest Main Street shareholders a voice.

This shift reflects a broader reconfiguration of how the rule operates in practice. Rule 14a-8 has historically depended on a combination of administrative oversight, evolving staff interpretation, and iterative dialogue between companies and investors. When the administrative layer was removed, interpretive authority shifted to issuers, and dispute resolution migrated to litigation and market pressure.

In that environment, the dynamics between proponents and companies changed materially. Proponents—who typically seek collaborative engagement with the company and dialogue with fellow shareholders—were forced into a position where they must consider escalation, including litigation, to ensure inclusion of proposals on the proxy.

The report concludes with five key recommendations for strengthening Rule 14a-8 and the shareholder proposal framework:

1. Preserve Rule 14a-8. The shareholder proposal mechanism is a vital communication channel between investors and corporate management. Weakening or eliminating it would undermine shareholders’ ability to raise governance concerns and hold management accountable.

2. Restore the no-action process. The SEC should revive its administrative process for resolving proposal exclusion disputes. Without it, conflicts are pushed into costly federal litigation or contentious shareholder campaigns. Some streamlining is possible for clear-cut procedural defects, but contested or fact-dependent claims still require meaningful staff review.

3. Eliminate “no-objection” letters. The practice of issuing no objection letters based solely on a company’s own unverified representations is inconsistent with Rule 14a-8’s intent. It implies administrative endorsement of unilateral exclusions regardless of consistency with the rule, and should be discontinued.

4. Issue clearer, more objective guidance. While appropriately restoring clarity about ensuring that proposals are relevant to the companies receiving them, Staff Legal Bulletin 14M also introduced excessive subjectivity into key exclusion determinations—particularly on “ordinary business” and “micromanagement” grounds. The subjective criteria provide staff with too much discretion; returning to more objective standards would improve predictability and reduce the need for repeated case-by-case adjudication.

5. Protect smaller shareholders’ access. Any reforms should ensure the process remains accessible to individual investors and smaller asset managers, who are unlikely to pursue litigation and who have historically filed some of the most important proposals on potentially material issues for their companies.

The 2025–2026 proxy season ultimately demonstrates both the resilience and the fragility of the shareholder proposal system. Shareholders kept raising concerns about governance, risk oversight, and corporate conduct. Some companies kept engaging constructively. But the absence of consistent regulatory oversight has introduced uncertainty, uneven outcomes, and shifted investor-company relations onto a more adversarial footing, dependent on litigation and escalatory tactics, rather than orderly SEC staff assessment of whether a proposal is consistent with the rule.

Investor Representatives File Lawsuit Challenging Unlawful Restriction of Shareholder Rights

March 19th, 2026

Lawsuit Seeks to Block Change by SEC that Encourages Companies to Exclude Shareholder Proposals from Company Proxy Materials

A pair of investor representative groups dedicated to corporate responsibility and the rights of investors today filed a legal challenge to a new policy from the Securities and Exchange Commission’s (SEC) Division of Corporation Finance. The policy undermines a long-standing rule that governs shareholder proposals, which have been a linchpin for decades of productive engagement between companies and shareholders on matters related to long-term corporate value.  

The Interfaith Center on Corporate Responsibility (ICCR) and As You Sow, represented by Democracy Forward, seek to stop implementation of the new policy, which gives companies an effective rubber-stamp from the SEC to stop investors from presenting and voting on proposals regarding issues directly relevant to a company’s long-term performance and risk profile. 

The SEC’s revised policy allows companies to omit shareholder proposals by filing a simple letter and receiving a “No Objection” statement from the SEC, without benefit of any analysis by the SEC of the company’s claims or proponents’ response. Omitting a proposal from the company proxy prevents shareholders from making and voting on proposals that raise concerns about a company’s long-term performance and risk profile. 

“The SEC’s actions in undermining the shareholder proposal process are a short-sighted departure from decades of precedent in which shareholder proposals, a critical tool in a private ordering process, have led to important improvements in corporate governance and corporate practices that benefit both companies and investors. This long-standing process has given generations of American investors greater voice and power, in turn helping build a stronger and more dynamic economy, and safeguarding the investments that millions of American families depend upon,” said ICCR CEO Josh Zinner.

“Both companies and investors benefit from the give and take provided by the shareholder proposal process,” said Danielle Fugere, President & Chief Counsel of shareholder representative As You Sow. “Eroding shareholders’ right to bring issues of concern to a vote of shareholders weakens an important check on company action and reduces information to shareholders. Since proposals are generally non-binding, the only real benefit of these changes appears to be shielding companies from having to consider hard issues that would be easier to sweep under the rug. This ultimately weakens the fundamentals of capitalism and investor confidence in the market.” 

The SEC has long had an effective process, pursuant to Rule 14a-8, that generally requires companies to include shareholder proposals in a company’s proxy materials unless a company challenged the proposal. Under the prior process, SEC staff exercised its independent judgment by assessing the validity of a company’s claim that the proposal could be excluded. Proponents and companies were not formally bound by the SEC’s decision, but they almost universally respected them as conclusive. Under the new process, a company need not meet Rule 14a-8’s burden of proving that their omission of a shareholder proposal is justified. Now, the SEC accepts at face value a company’s “unqualified representation” and issues a letter stating that the SEC has “No Objection” if the company omits the resolution. 

“The new SEC policy is an undemocratic hall pass to corporate mismanagement that sends a message to investors to ‘sit down and shut up’ about how the company they own is managed,” said Skye Perryman, President and CEO of Democracy Forward. “This policy is inconsistent with existing SEC rules, and was adopted without following the legally-required process to consider a policy change. We are honored to work with corporate responsibility advocates to challenge this new policy and to fight for the rights of shareholders to have a say in how their investments are managed.” 

The case is ICCR et al. v. SEC et al. in the U.S. District Court for the District of Columbia. The legal team at Democracy Forward on this case includes Simon Brewer, Brian Netter, and Victoria Nugent. 

Read the complaint here. Access the full article here.

Democracy Forward Foundation is a national legal organization that advances democracy and social progress through litigation, policy, public education, and regulatory engagement. For more information, please visit www.democracyforward.org.  

US SIF’s 30th Anniversary “Trends Report”

US SIF’s latest “Trends Report” Finds Sustainable Investing Asset Base Holding Amid Political Headwinds

Sustainable assets account for 11% of total market AUM; climate and client customization drive activity, while themes like artificial intelligence (AI), biodiversity, and Indigenous People’s rights gather steam. 

Highlights

• US SIF analysis records the US market size as $61.7 trillion, of which $6.6 trillion (versus $6.5 trillion in 2024) were identified or marketed as sustainable or ESG investments. 

• 53% of individuals expect the sustainable investment market to grow over the next year, compared to 73% in 2024. 

• Political pushback has moderated, not reversed, ESG activity with nearly half (46%) reporting no impact to how their organization approached sustainability, while 29% said they now focus explicitly on demonstrable financial materiality; one in four have stopped using the ESG acronym. 

• Investors are currently prioritizing the areas of the economy with high emissions and investing in the transition including energy, innovation, and transport (with 86%, 76% and 72% invested respectively). 

• When it comes to strategies, ESG integration remains the mainstream default with 77% using this approach.  

• Looking ahead, impact investing showed the strongest growth runway with 46% saying they expect their organization to increase its impact investing activities over the next three years, followed by sustainability-themed investing (43%) and ESG integration (38%).  

Washington D.C., December 9, 2025 – On its 30th anniversary, the US SIF Foundation’s flagship report, US Sustainable Investing Trends 2025/2026, takes the pulse of the US sustainable investing market and finds that assets have remained steady, even amid political pushback.  

Using Securities and Exchange Commission filings, US SIF places the overall US market size at $61.7 trillion, with $6.6 trillion marketed specifically as “sustainable” or “environmental, social and governance” (ESG) investments – a modest increase from $6.5 trillion in 2024, reflecting stable investor commitment. Sustainable assets represent 11% of the overall market size, versus 12% last year, a marginal decline likely due to the increase in the overall value of the market in 2024.

Sixty-nine percent of the US market AUM, or $42.7 trillion, was covered by an active stewardship policy. 

Launched in 1995, the Trends report has provided the foundational data needed to understand the evolving sustainable investing market for three decades. In partnership with SDGlabs.ai, US SIF reviewed SEC disclosure Forms ADV and 13F, public websites and reporting, and 270 survey responses to create the definitive baseline of the US sustainable investment market. 

Political Impact on Sustainable Investing Activity 

The evolving dynamics of US politics are shaping investor sentiment and approaches to sustainability in noticeable, if uneven, ways. Rather than a wholesale pullback, the current moment is characterized by adjustment: investors are holding to their sustainability commitments while recalibrating terminology, stewardship practices, and disclosure framing to fit shifting legal and political conditions.  

When asked whether certain events or issues affected their decision to increase sustainable investments in 2025 and beyond, 62% said the political environment had no effect on their decision, while 22% said they would increase investments.

“What we’re witnessing is that there has not been a retreat from sustainable investing. Over three decades, we’ve seen this industry evolve from a niche concept to mainstream investment approach. The shifts we’re seeing reflect a pragmatic adaptation to the current environment while maintaining focus on the long-term drivers of value and changing market risks and opportunities.”  

Maria Lettini, CEO of US SIF

Climate change (52%), client-driven customized investing (41%), and severity and frequency of catastrophic climate events (38%) were the top issues driving an increase in sustainable investment activities. Loss of biodiversity (34%) and food insecurity (24%) rounded out the top five.  

Notably, 23% of respondents indicated that AI was positively affecting their decision on whether to increase sustainable investments in 2025 and beyond. Heightened attention to Indigenous Peoples’ rights (with 16% increasing and 81% maintaining activity) and migration (11% increasing and 87% maintaining) underscores growing focus on social issues at the nexus of major sectoral trends in the extractive industries, the energy transition, infrastructure, and related sectors. 

Industry Comments

"The continued strength in sustainable investing AUM demonstrates that ESG integration has become a fundamental part of investment strategy, not a passing trend. At G&A, we've tracked thousands of companies increasingly adopting sustainability reporting and disclosure practices in response to investor demand. This alignment between investor capital allocation and corporate transparency is strengthening markets, improving corporate resilience, and creating long-term value for all stakeholders and the broader economy.”

Louis Coppola, CEO & Co-Founder, G&A Institute 

“That this report found that 69% of the entire US market is covered under a stewardship policy underscores the importance of this approach in driving value. Whether through proxy voting, direct engagement or other stewardship strategies, global companies can expect to hear from the investment community about issues that affect corporate resilience.”

Lisa Hayles, Director of Sustainability and Stakeholder Engagement, Trillium Asset Management 

“At a time when the broad expectation was that sustainable investing assets would contract, this year’s Trends report shows that the industry is staying the course and committed to providing long-term value. This aligns with Calvert’s time-tested responsible investment philosophy.”

Anthony Eames, Managing Director, Responsible Investment Strategy, Calvert Research and Management

“The 2025/2026 Trends report underscores that investors remain focused on material sustainability risks and opportunities that affect business resilience and promote value creation over the long term. While approaches to these issues continue to evolve, enhanced corporate disclosure remains essential for investors to mitigate risks and capitalize on opportunities, such as those presented by climate change and emerging artificial intelligence (AI) technologies.”

Amy D. Augustine, Director of ESG Investing, Boston Trust Walden 

Access the full report, here.

ICGN Letter to SEC on Shareholder Proposals

Letter from Jen Sisson, CEO of ICGN on 10th December 2025

Dear Chairman Atkins, and Commissioners Uyeda, Peirce and Crenshaw,

Subject: Comments on the SEC Statement on Rule 14a-8 - No-Action Requests

The International Corporate Governance Network (ICGN) would like to offer its perspective on the SEC Division of Corporation Finance statement, published on November 17, 2025, regarding no-action requests under Rule 14a-8.

Led by investors responsible for assets under management of over US$90 trillion, ICGN promotes high standards of corporate governance globally. Our members – both asset owners and asset managers – have significant exposure to the U.S. market.

We are deeply concerned by the Division of Corporation Finance’s announcement that it will not substantively respond to most Rule 14a-8 no-action requests for the 2025–2026 proxy season. We are concerned that the narrowing of shareholder proposal rights appears part of a broader shift that reduces the avenues through which investors can engage with portfolio companies, compounded by recent changes to interpretations of Section 13D and 13G. Taken together, these developments risk adding tensions between company owners and management, and diminish investor confidence in U.S. corporate governance standards and thereby weaken the appeal of U.S. capital markets globally.

Why shareholder resolutions are an important mechanism

Shareholder resolutions are a vital mechanism for company owners to surface ideas and raise concerns with company management and all shareholders. They have been a key driver of corporate governance improvements in the United States. For example, shareholder resolutions have been successful in promoting annual director elections and establishing simple majority vote requirements. Shareholder proposals helped these good governance practices to become norms, based on a market-led approach, without regulation or standards. Hundreds of constructive dialogues, resulting in increased corporate transparency and improved governance, have been facilitated by shareholder resolutions at minimal cost to issuers and investors.

Each investor has their own approach to decide how to vote on a shareholder resolution. Across the market, resolutions that obtain significant shareholder support tend to be those that are not overly prescriptive for company management and that concern issues investors deem financially material for the success of the company. Shareholders tend to support proposals that can catalyse improvements in governance, reporting, risk management, and long-term strategic thinking. Academic research shows that governance provisions restricting shareholder rights, such as limits on the ability to propose resolutions, are associated with lower firm valuation and weaker stock performance.

Shareholder resolutions can help provide accountability when other mechanisms fail. They also signal investor sentiment to the company. High support levels for a proposal can drive rapid governance improvements, but even modest levels of support can prompt constructive engagement between boards and investors.

Why the SEC No Action Process should be protected

ICGN believes that the ability to file shareholder proposals is a fundamental ownership right.

For decades, issuers and investors have relied on SEC staff guidance, and although purely advisory, it has served as an independent, impartial, trustworthy check that provided procedural clarity and curbed potentially arbitrary exclusion of shareholder proposals by boards of directors.

According to the Statement, a company will be able to obtain an SEC ‘no-objection’ based solely on the company’s unqualified representation that it has a reasonable basis to exclude the proposal based on the provisions of Rule 14a-8, SEC guidance and/or judicial decisions. Without conducting an evaluation of the adequacy of the representation, the SEC’s staff will not object to the company omitting the proposal from the ballot.

By stepping back from the process, the SEC risks significantly diminishing shareholder voice and reducing important checks and balances that exist to protect the long-term interest of the company and its owners. Without the traditional buffer of a staff no-action determination, boards of directors may face increased opposition from investors concerned that relevant shareholder proposals may have been omitted without a valid reason. Furthermore, without SEC staff guidance, companies may be exposed to increased litigation, as proponents of shareholder resolutions that have been omitted by companies may seek judicial clarification in the absence of SEC staff assessment.

We regret to hear that the SEC intends to withdraw from substantive 14a-8 review. Rule 14a- 8 has facilitated a critically important private ordering process - but private ordering only works with regulatory oversight.

A call for the SEC to reconsider its Statement and launch a public consultation

ICGN recognises the resource pressures the Division faces, but the shareholder proposal process plays a vital role in surfacing material risks and enabling constructive investor- company dialogue. We believe that the existing process is well understood and has been supportive of well-functioning markets, and therefore we strongly support the SEC No Action Process being protected.

The Division’s independent review has historically provided transparency, predictability and a neutral reference point for both companies and investors. Removing or significantly narrowing that role risks eroding investor voice, imposing disproportionate burdens on minority and smaller proponents, and increasing costly litigation. As we believe this is not in the interest of efficient and fair capital markets, we respectfully ask that the SEC reconsider its statement.

We are concerned that this shift is occurring through staff announcements and public remarks, rather than through the formal rulemaking process. As highlighted in our 20 October letter, we encourage the Commission to consider returning to public consultation processes on matters that substantively alter policy, following a formal notice-and-comment process under the Administrative Procedure Act. We believe that the absence of public consultations on important announcements which may negatively affect shareholder rights, risks lowering the quality of the highly regarded due process and governance standards in the United States, thereby presenting a risk to the attractiveness of U.S. capital markets and impact the valuation of U.S. companies by investors.

We would welcome the opportunity for further dialogue on these issues. Should you have any question, please contact Severine Neervoort, Global Policy Director at policy@icgn.org.

To learn more, please visit ICGN’s Website.

Legislative Developments in the Shareholder Proposal process

House

On September 18, 2024, the US House of Representatives passed H.R. 4790, the Prioritizing Economic Growth Over Woke Policies Act.110 The legislation is an umbrella bill incorporating a number of other bills that, among other things, significantly increase the ability of companies to exclude shareholder proposals from the proxy statement, including:

• amending the Securities Exchange Act of 1934 to prohibit the SEC from compelling an issuer to include in the proxy statement any shareholder proposal or any discussion related to a shareholder proposal. The bill also expressly states the SEC may not preempt state regulation of proxy materials or shareholder proposals. (Section 2002)

• increasing requirements for resubmission of proposals to require 10% voting support for a first-year proposal, 20% for a second year proposal and 40% for third year proposal, compared to current requirements of 5% voting support the first year, 15% for the second year and 25% for the third year. (Section 3101)

• allowing companies to exclude shareholder proposals where the company already has policies, practices, or procedures that compare favorably with the guidelines of the proposal and address the proposal’s underlying concerns. (Section 3201)

• allowing companies to exclude any proposal relating to environmental, social or political issues from proxy or consent solicitation material. (Section 3301)

• allowing companies to exclude a shareholder proposal under Rule 14a-8(i) without regard to whether the proposal relates to a significant social policy issue. (Section 3401)

• requiring the SEC to conduct a “wasteful and unnecessary” study every 5 years on shareholder proposals, proxy advisory firms, and the proxy process, covering a variety of topics, including the purported costs incurred by the shareholder proposal process and the “risk that shareholder proposals may contribute to the balkanization of the US economy over time.” (Section 3501)

•  providing that an institutional investor may not outsource voting decisions to any person other than an investment adviser or a broker or dealer that is registered with the Commission and has a fiduciary or best interest duty to the institutional investor. (Section 3901)

Senate

On September 23, 2024, S. 5139, the Empowering Main Street in America Act of 2024, was introduced. Among other things, the bill would allow a company to exclude a shareholder proposal from its proxy statement without regard to whether that shareholder proposal relates to a significant policy issue. (Section 305)

Shareholder Proposals and the Freedom to Invest

Investors’ right to file shareholder proposals has contributed to the success of the US capital markets.

Large, publicly traded companies play a dominant role in the U.S. economy: pharmaceutical companies influence the medicines available in our pharmacies and their cost, health insurers influence which treatments will be affordable to patients, and tech companies influence the degree to which consumers are subject to surveillance or privacy in their use of email and social media.

The free market, and the relationship between investors and issuers, is grounded in investors’ rights as company owners to elect directors as well as file shareholder proposals. The job of boards is to oversee the executives who are day-to-day managing the company. The rights to vote upon directors, as well as to present focused issues through shareholder proposals, are part of the bundle of rights investors possess and value as company owners. The unfettered exercise of these rights reinforces the relationship of trust needed for capitalism to thrive.

Shareholder proposals address issues relevant to companies that are neither trivial nor “picayune.” Risks of potential lawsuits against the company, operational disruptions from droughts, floods and fires, and of ethical scandals that shake consumer or investor confidence— these are typical issues in shareholder proposals and raise material concerns for investors. This private ordering process can allow good ideas to proliferate in the market, advancing best practices and reducing the pressure for government regulation or for more confrontational or costly approaches by shareholders, such as voting against the board, or litigation.

Without the right to make proposals, corporate management can more easily ignore the voice of small shareholders, pension funds, and other investors.

The shareholder’s right to place proposals on the proxy, and the freedom to express a collective voice by voting on such proposals, are part of the social and legal compact between investors and companies that maintains the trust needed for capitalism to thrive. This trust has resulted in the US becoming the largest and most envied capital market in the world.

Shareholder proposals are largely non-binding. Non-binding proposals give companies the flexibility to address shareholder concerns without displacing the traditional role of the board of directors to oversee the operations of the company.

What is a Shareholder Proposal?

Shareholders—as owners of a company—have a legal right to offer proposals to appear on the corporate proxy statement to be voted upon at a company’s annual shareholders meeting. Corporations are required to hold these annual meetings in order for shareholders to vote
on matters related to the corporation such as auditor ratification, election of directors, and executive compensation. The Securities and Exchange Commission (SEC) requires public companies to file an announcement ahead of the annual meeting including its items of business called the proxy statement.4 SEC Rule 14a-8 allows shareholders to submit statements of up to 500 words (“shareholder proposals”) to be included in the company’s proxy statement.

The proxy statement is therefore the vehicle by which investors are informed of proposals by other investors. SEC Rule 14a-8 defines a shareholder proposal as a specific request from the shareholder - a “recommendation or requirement that the company and/or its board of directors take action, which you intend to present at a meeting of the company’s shareholders.” The SEC states that the proposal “should state as clearly as possible the course of action” that the shareholder believes the company should follow.

“Shareholder proposals are a crucial tool for investors to engage with their companies. Engagement covers a host of strategies investors use to obtain additional information and influence the policies and practices of their portfolio companies on governance and sustainable value creation.”

Some shareholder proposals seek changes in governance infrastructure, for example, requesting that the CEO and the board chair be separate people to increase the independence of the board and its ability to oversee the company on behalf of shareholders. Or they might request a change in voting standards to allow proposals to be passed by a vote of a simple majority rather than a larger voting threshold of supermajority, thus creating a better balance of power between the company and its investors. Other proposals may address environmental or social challenges facing the company—issues that may also be the subject of a wider social or political debate, but which nonetheless have a potential financial impact on the company or the larger economy on which returns depend.

For example, a proposal may request the disclosure of the company’s assessment of its operations, policies and practices designed to mitigate environmental, regulatory or liability risks associated with its mining operations. In another instance, a proposal may request
that a company report as to its timeline and plan for how it expects to transition to meet its stated objective of net zero greenhouse gas emissions. Some of these proposals might be described as “social or political proposals,” but they must nonetheless be relevant to the company’s business according to SEC rules and comply with more than a dozen strict SEC rules for acceptable proposals and filings.

Most shareholder proposals are non-binding. Non-binding proposals give companies the flexibility to address shareholder concerns without displacing the traditional role of the board of directors to oversee the operations of the company.

Introduction to the Ordinary Business Rule

Ordinary business

A basic principle of SEC Rule 14a-8 is that a proposal should not supplant or attempt to control the day-to-day decision-making of the corporation, referred to as “ordinary business.” The company’s officers are hired to manage the company under the oversight of the board of directors. The board is accountable as an elected representative of the shareholders. As such, the management and board have important day to day discretion in running the company—who to hire, how much to pay them, what kind of products or services the corporation should offer and many other ordinary business matters that it takes to run a business.

While a focus on ordinary business is not appropriate for a shareholder proposal, the courts and the SEC have made a notable exception when shareholder proposals address important policy issues for a company on which it is appropriate for shareholders to weigh in, often referred to as the “social policy” exception. Such proposals are described as transcending ordinary business.

For instance, while the day-to-day lending practices of a bank are ordinary business, when there is evidence that the bank is engaging in predatory policies and practices, shareholders are able to file a proposal asking the company to disclose more about this issue and its current policies. Similarly, policies regarding the amount of compensation paid to employees are generally ordinary business, but proposals coming from shareholders that challenge excessive compensation of the CEO or of directors are appropriate. A pharmaceutical company’s prices for its products are ordinary business, but company policies exploiting a pandemic to exploit vulnerable consumers may be seen to transcend ordinary business. Day to day legal compliance on environmental regulations is ordinary business, but significant pollution incidents or catastrophes that a company may be liable for may be an appropriate topic for a shareholder proposal because it transcends ordinary business.

An important related limitation is for proposals not to micromanage. Even if the topic transcends ordinary business, proponents must not be so granular in their request to the company that they attempt to micromanage the business. The discretion of the board and management is protected in this process. That is why many proposals often ask the board or management to disclose more about their policies and practices, and proposals seeking action are typically advisory rather than a mandatory order.

The History of SEC rules and Shareholder Proposal Regulation

During the United States’ first century, corporations had small numbers of investors and were largely controlled by shareholders through deliberations and voting that took place at in-person shareholder meetings. As the US economy grew, and corporations had to bring in large amounts of capital from thousands of investors, shareholder meetings went from in-person affairs to being conducted by proxy, and management solicited blanket voting authority based on little or no information. Ownership and control were largely divorced, and corporate abuse of the proxy, which frustrated the free exercise of the voting rights of stockholders, was rampant. Section 14 of the Securities Exchange Act of 1934 addressed this concern by authorizing the SEC to regulate proxy solicitation.

The SEC adopted the predecessor to SEC Rule 14a-8 in 1942, recognizing that shareholders need notice of proposals to be made by fellow shareholders. One court explained that, “the rationale underlying this development was the Commission’s belief that the corporate practice of circulating proxy materials which failed to refer to the fact that a shareholder intended to present a proposal at the annual meeting rendered the solicitation inherently misleading.” SEC Staff reiterated this purpose, explaining that “[t]he Senate Banking and Currency Committee recognized the need to provide not only for disclosure of matters management planned to present, but also for shareholders to be given ‘reasonable opportunity to present their own proposals and views to fellow security holders.”

Thus, SEC Rule 14a-8 advances the overall Securities Exchange Act’s goal of shareholder democracy—a central purpose of the 1934 Act in reaction to weakening shareholder control and increasingly concentrated corporate power in professional managers. Shareholder democracy stands for the principle that, in return for access to the securities exchanges, the law provides that corporations would incur a corresponding duty to give the shareholders fair suffrage. Referring to 14a-8, one recent judicial decision noted that “[t]he Commission enshrined this edict in its regulations, believing that “fair corporate suffrage” required that all shareholders receive notice of such matters when their proxies are solicited.”

Governance Proposals

Governance proposals and the role of individual investors

Governance engagements seek to ensure that a well-functioning board can effectively oversee the interests of shareholders. For example, proposals to increase the independence of the audit or risk committee have the potential to reduce accounting fraud risk. Likewise, engagements to increase the holding period of equity-based pay reduce management incentives to manipulate short-term earnings.

Governance shareholder proposals can also increase investors’ ability to engage with companies. It has been shown that it is more costly for investors to engage with companies with entrenched managers.14 The entrenchment of management is principally measured and affected by the corporate governance infrastructure including whether the company has characteristics such as:

• Staggered boards ƒ  

• Limits to shareholder by-law amendments

• Supermajority requirements for mergers ƒ  

• Supermajority requirements for charter amendments ƒ  

• Poison pills ƒ  

• Golden parachutes

Shareholder proposals that improve corporate governance structures on these aspects are frequently part of an overall strategy by investors to provide a better balance of power between investors and a company’s management and board.