US Sustainable Investing Trends 2024-2025

The US SIF Trends Report 2024/2025 provides a comprehensive understanding of the trends driving $52.5 trillion in US assets under management (AUM), including $6.5 trillion explicitly marketed as ESG or sustainability-focused investments.

Key Findings and Takeaways

The Market is Poised for Growth

73% of survey respondents expect the sustainable investment market to grow significantly in the next 1-2 years, driven by client demand, regulatory evolution, and advances in data analytics. This is still the case, despite political headwinds and regulatory scrutiny.

Stewardship Takes Center Stage

79% of US market assets ($41.5 trillion) are now covered by stewardship policies, though further research is needed to assess their active implementation and impact.

Focus on Climate and Clean Energy

Climate change remains the dominant theme, with a strong emphasis on clean energy transitions, carbon reduction, and nature restoration.

Strategic Shifts in Investment Approaches

ESG integration (81%) and exclusionary screening (75%) are the most commonly used strategies. Survey responses indicate that 62% use 5 or more negative screens.

Challenges and Opportunities Ahead

Political challenges, such as anti-ESG rhetoric and greenwashing concerns, continue to shape the narrative. Our survey shows that although these present challenges, they also highlight the need for improved communication and education about the value of sustainable investing.

Access the detailed report on US SIF’s website.

Proxy Review 2025

2025 Proxy Season Executive Summary

This year, shareholders filed 355 environmental, social, and sustainable governance (ESG) proposals as of February 21, 2025. Additional proposals will be filed as the year progresses, but the shape of the 2025 spring annual meeting season is now clear.

The 2025 proxy season has seen a sharp drop in proposals filed from 2024, primarily due to the change in the presidential administration and what many expected to be a dramatic policy shift at the Securities and Exchange Commission (SEC).

Proponents have largely taken a “wait-and-see” approach, electing not to file resolutions until they were able to assess the direction of the new SEC. This approach was validated as it quickly became clear that some proposals that had been allowed by the SEC for decades, began to be omitted. And in a move that clearly undermined proponents—after the majority of the 2025 resolutions were filed, the SEC formally changed the rules of what could be excluded and extended the timeframe for companies to submit or amend their no-action filings without allowing shareholders the same opportunity

to amend their resolutions.

Another factor in the drop in filings is that more companies engaged in dialogue with shareholders in order to avoid both the need for proposals and the related publicity that could draw attention to them given the current political attacks on DEI and climate.

Next year, shareholders will, of course, revise their proposals to meet the new rules and it is anticipated that the number of filings will go up. Yet the larger political and legal attacks on sustainable investing, institutional investors, and proxy analysts does raises concerns that the SEC will take further actions to curtail shareholder rights and hinder shareholder proposals.

The total number of 2025 ESG resolutions are down 34% from 2024 when 536 such proposals were filed by this point. Average support for pro-ESG proposals in 2024 was 19.6%, down from 21.5% in 2023 and well below the 33.3% average vote of 2021. In 2024 there were fewer majority votes than we had seen in previous years. Again, much of the decline in votes is attributable to the large asset managers no longer supporting ESG proposals and the attacks on taking material ESG risks into account.

Thus far, 78 proposals in the 2025 proxy season – 22% of the total filed – were withdrawn. At a similar time in 2024, only 7.7% of proposals had been withdrawn. March and April often see a flurry of withdrawals before proxy statements are sent out, so it will be interesting to see if more companies elect to privately come to an agreement with or engage their shareholders in this incendiary political climate to avoid the public spotlight and how many resolutions are withdrawn to avoid being omitted under the new rules. On March 7, 2025, the SEC reported 221 proposals had received no-action requests. In 2024 there were 7 omissions and 94 no-action requests pending at a similar date.

For a more detailed report on the 2025 Proxy Season, access the resource here.

Letter from Democratic Financial Officers to Asset Managers Regarding Environmental and Social Issues

A coalition of 17 Democrat finance officials have sent a letter to executives at BlackRock and 17 other firms, pushing the institutions to reaffirm their commitment to managing long-term risks like climate change. Executives at Vanguard, State Street and JPMorgan Chase also received the Americans for Responsible Growth letter. The full list of recipients include Amundi, BNY, Capital Group, Fidelity Investments, Franklin Templeton, Geode Capital Management, Goldman Sachs, Invesco, Legal & General, Morgan Stanley, Northern Trust, Nuveen, T. Rowe Price and Wellington Management. 

An excerpt from the letter to BlackRock is included below.

Dear Mr. Fink,

We write to offer a fundamentally different vision of fiduciary responsibility than the one advanced in the July 2025 letter to you from signatories of the State Financial Officers Foundation (SFOF).

We believe the views expressed in their letter misrepresent the true meaning of fiduciary duty and would require asset managers to take a passive approach to oversight while ignoring the nature of long-term value creation in modern capital markets. In contrast, we believe that fiduciary duty calls for active oversight, responsible governance, and the full exercise of ownership rights on behalf of the workers and retirees we serve.

Fiduciary duty, as properly understood, requires—not prohibits—investor consideration of material risks and long-horizon opportunities. Institutional investors, including public pension funds, are long-term owners. They bear the consequences of unmanaged risks—whether climate-related, governance-related, or supply chain-related—and must ensure that corporations and their boards address such risks with transparency and accountability.

Asset owners and their asset managers must retain and effectively use their authority to vote proxies, and engage companies to deliver durable, risk-adjusted financial returns over the long-term.

It is particularly unreasonable to suggest that asset owners whose portfolios span the entire economy should be barred from engaging the largest firms in the market. Today, the top 100 companies represent more than 70% of U.S. market capitalization. For many institutional investors, these holdings are structurally inescapable. Denying the right to engage with these companies is tantamount to severing ownership from stewardship.

We commend asset managers who are expanding opportunities for clients to vote proxies. We urge you to focus on empowering institutional investors and uphold an approach to fiduciary duty grounded in transparency, accountability, and long-term value creation. It is essential that you lead in developing tools and mechanisms that connect capital to oversight.

We invite you to respond by September 1, 2025, and to meet with our offices to reaffirm your current commitment to responsible stewardship and build a constructive dialogue around this issue.

The Democrat finance officials represent Connecticut, Delaware, Maine, Massachusetts, Minnesota, Nevada, New Mexico, Oregon, Rhode Island, Vermont and Washington. They are looking for firms to reach out to meet with their offices and reaffirm their “current commitment to responsible stewardship” by Sept. 1.

Link to the BlackRock Letter.

Sustainable Investment Markets: Evolution and Impact

How Investors Can Advance Sustainable Urban Development Through Innovative Financing Models and Climate Narratives in a Polarized Environment

Authors: Austin Ariss, Mariama Bah, Renata Gladkikh, Nanda Jasuma, Smita Samanta

Executive Summary

• Policy volatility has become structural, not episodic, as evidenced by the 2025 $7B offshore wind rollback creating an operating environment without a reliable policy floor for sustainable investment.

• Despite 58% of investment professionals prioritizing SDG 11, implementation lags due to a fundamental mismatch: capital is ready but execution is constrained by fragmented regulation, stakeholder complexity, and inconsistent incentives.

• Our research reveals that successful urban sustainability investments pair mechanism with a message. Blended finance structures resolve technical barriers to scale, while economic reframing creates the political space required for implementation.

• Case analyses demonstrate the dual approach delivers results: the NYC MTA’s staged decarbonization was achieved through climate bonds and strategic communication; affordable housing preservation funds yielded 14–24% IRR by aligning community and investor interests.

• International experience confirms economic reframing decreases polarization: Australia’s natural capital approach positioned environmental protection as asset management; Japan’s energy security framing enabled nuclear revival despite post-Fukushima concerns

The difference between stalled climate finance and transformative sustainable investment lies in this integrated approach. For US SIF members navigating an uncertain policy landscape, this report offers a strategic toolkit focused on three actionable pathways: standardizing blended finance templates, aligning impact metrics, and repositioning climate initiatives as economic utility to create resilient investment pathways rather than waiting for ideal policy conditions.

Read more here.

Health and Safety in the Fast Food Industry

MIKAIL HUSAIN, ESG Analyst, SOC Investment Group

LOUIS MALIZIA, Corporate Governance Director, SOC Investment Group

In recent years, the food service industry has been rife with workplace health safety issues. Food service workers have been attacked, stabbed, shot, and killed by customers in the restaurants where they work. According to one study, between 2017 and 2020, at least 77,000 violent or threatening incidents took place at California fast-food restaurants. Recent data indicate that the cost of workplace violence could be as much as $56 billion annually – and that’s likely an undercount. However, workplace health and safety issues are not limited to customer violence. Workers have also been made to work under unsafe and unsanitary conditions, such as restaurants with high kitchen temperatures and restaurants infested with vermin.

These issues and the media response they elicit are clear operational and reputational risks for the companies, which can lead to difficulties with staff retention in an industry with high turnover. According to the U.S. Chamber of Commerce, the food service and hospitality industry has a consistently high “quit rate.” Understaffing at fast food restaurants can lead to longer wait times for customers, diminished employee productivity, and an increase in safety hazards. Workplace health and safety issues in fast food restaurants have led to worker strikes and protests of working conditions, as well as fines and temporary restaurant closures imposed by regulators.

Why should investors care? If left unaddressed, workplace health and safety issues can expose companies and their shareholders to unnecessary risk. In recent years, shareholders have recognized the risks posed by workplace health and safety issues and are pressing companies to take more action to address them. In 2023, Dollar General shareholders demonstrated this with a majority vote in support of a health and safety audit proposal.

To address these risks, SOC Investment Group has filed health and safety audit proposals at McDonald’s, Yum! Brands, Restaurant Brands International, and Chipotle for the 2025 proxy season. The proposals are similar to the proposal we filed last year at Chipotle, which received 30% support from shareholders, well above the average support level of 18% for social proposals in the S&P 500 in 2024. The resolution requests that the companies’ boards of directors commission an independent third-party audit on the impact of company policies and practices on the safety and well-being of workers throughout company-branded operations.

We believe any relaxation of safety standards in pursuit of short-term benefits creates risks for workers, customers, and shareholders and may result in long-term reputational damage that can be difficult to reverse. In addition to these risks, companies that neglect health and safety in the short term may face increased regulatory and business risks that can erode margins and reduce long-term shareholder returns.

Further Reading.

Human Rights & Artificial Intelligence

BRANDON REES, Deputy Director, Corporations and Capital Markets, American Federation of Labor and Congress of Industrial Organizations (AFL-CIO)

The widespread adoption of artificial intelligence (AI) by companies has the potential to unleash broad-based economic prosperity by enhancing employee productivity. But, it also carries risks to workers’ rights as AI algorithms increasingly set productivity quotas, make human resource decisions, and direct workers on how to perform their jobs. For example, the use of AI in human resources decisions can result in unlawful employment discrimination.

According to the UN Guiding Principles on Business and Human Rights, companies have an international obligation to “know and show” that they respect human rights. In using this due diligence framework to manage AI-related human rights risks, companies should: 1) be transparent about how AI is used by the company, 2) establish board-level oversight and monitoring of AI-related risks, and 3) give workers a voice in how AI is used in the workplace.

First, companies should be transparent with how they use AI in their business operations. Investors are regularly engaging with their portfolio companies about AI as part of their stewardship activities. Many companies are now voluntarily disclosing information on how they use AI to their investors, employees, and customers. By addressing the ethical considerations of AI in a transparent manner, companies can build trust with their stakeholders.

Second, boards of directors have an important role to play in monitoring and managing AI risks. Under the Caremark standard in Delaware corporate law, directors have a fiduciary duty to oversee their company’s operations by establishing an internal reporting system. At a minimum, companies adopting AI into their business operations need to establish board-level oversight of the risks involved and report on any regulatory noncompliance issues that arise.

And, finally, companies should view AI as an opportunity to enhance human decision-making by their employees, not as a substitute. Companies that view their workers as partners in implementing AI are more likely to attract and retain a motivated workforce and realize the productivity gains that AI promises. Unions are the best way for workers to negotiate how AI technology should be implemented in the workplace.

To address these concerns, the AFL-CIO Equity Index Funds have introduced shareholder proposals that ask companies to commission an independent, third-party human rights assessment of their use of AI. Proposals are expected to go to a vote at Amazon and Lyft in 2025, and similar proposals requesting a transparency report on the use of AI received high levels of shareholder support at Apple (37%) and Netflix (43%) in 2024.

Further reading.

Nature is Critical to Business

ANDREW SHALIT , Shareholder Advocate, Green Century Capital Management

Global biodiversity is deteriorating faster than at any time in human history, largely due to human activity. Such massive biodiversity loss poses serious economic and financial risk as more than half the world’s economy is moderately or highly dependent on nature. To reverse this trend, companies must start by meaningfully assessing, disclosing, and addressing their nature-related impacts, dependencies, risks, and opportunities.

Green Century has long worked to advance protections for nature through our work to preserve natural forests, reduce the use of harmful chemicals, and put companies on a path to net zero emissions. In the fall of 2023, we filed our first proposals that specifically address biodiversity, asking companies including PepsiCo and Kellanova to complete material biodiversity dependency and impact assessments. This year, we refiled our resolution at PepsiCo and co-filed, along with Proxy Impact, a biodiversity and nature disclosure resolution at Home Depot, led by Domini Impact Investments. These resolutions call on companies to face and address the challenges to nature that threaten the products they sell and the markets in which they operate.

We also filed a biodiversity resolution at Chemours, a chemical company that mines titanium to create products that whiten our paint, toothpaste, and sunscreen. While titanium is a plentiful mineral, Chemours conducts some of its mining operations in ecologically sensitive areas. Our proposal asks Chemours to adopt a policy to assess any reasonably likely irreversible impacts on biodiversity prior to commencing mining operations in ecologically sensitive areas, as well as any related financial, reputational, and operational implications for the company should those impacts occur. Bottom line, it probably doesn’t make financial sense to mine ecologically sensitive areas for a natural resource you can easily find elsewhere – and it’s at least worth assessing those risks and impacts first.

Global institutions have begun to recognize the need for action on nature. In 2022, 196 countries ratified the Global Biodiversity Framework, setting out ambitious goals to protect and restore nature. The Taskforce for Nature-Related Financial Disclosures (TNFD) was launched in September 2023. As of this writing, 546 organizations worldwide have committed to assessing and disclosing under TNFD, including 346 corporations and 139 financial institutions. The Global Reporting Initiative, CDP, and Science Based Targets Network are developing support for biodiversity and nature disclosure and target setting. Biodiversity disclosure is also included in the EU’s Corporate Social Responsibility Directive. Industry groups, including the Finance for Biodiversity Foundation and Business for Nature, provide additional support for companies seeking to transition to nature-positive practices.

We can no longer take nature for granted. Companies must find nature-positive approaches to all aspects of their business, from supply chains to manufacturing to distribution, to avoid near- and long-term risks associated with the degradation of the natural world. Investors have a crucial role to play by insisting that companies take concrete steps to address the systemic risk of global biodiversity loss.

For more details on biodiversity and nature related proposals from the 2025, access 2025 Proxy Preview.

2025 Update on SEC Guidance for Shareholder Proposals

SANFORD LEWIS, Director and General Counsel, Shareholder Rights Group

In order to help companies and investors determine whether a shareholder proposal qualifies to appear on the proxy statement under SEC Rule 14a-8, the SEC has developed a process to allow companies to inquire in advance whether a proposal must be included. The “no action” process is an informal review process through which the SEC staff advises companies and their investors on whether the SEC staff would recommend enforcement action if a company fails to include a submitted shareholder proposal on its annual proxy statement.

The SEC staff periodically recalibrates its interpretation of the rules as it applies in the no-action process to reflect current issues of concern to investors and companies. For example, in 2021, the SEC staff issued an interpretive bulletin, Staff Legal Bulletin 14L, which clarified the interpretation of ordinary business and micromanagement rules.

The bulletin was subject to pushback from issuers and asset managers. Trade associations, such as the National Association of Manufacturers and Business Roundtable, were critical of the bulletin, asserting that it no longer required that a proposal address an issue that is significant to the company receiving it. Asset managers who vote on shareholder proposals asserted that proposals were becoming too prescriptive.

In 2023 and 2024, following the market response and criticisms, the staff tightened up its interpretations of the micromanagement rule and excluded many proposals on social and environmental issues that had previously been allowed. From November 1, 2023, to May 1, 2024, the SEC staff supported company requests for exclusion of proposals roughly 68% of the time, similar to the average exclusion rate during the first Trump administration, from 2017 to 2020, which was 69%. In 2025, the staff has again tightened its interpretation of the micromanagement rule, excluding, for example, proposals on lobbying disclosure that had previously been permissible since at least 2011.

On February 12, 2025, the SEC staff issued Staff Legal Bulletin 14M to signify a more restrictive posture on proposals that request specific forms of disclosure or actions by companies. The bulletin revoked Staff Legal Bulletin 14L and altered staff interpretations of the micromanagement, ordinary business, and relevance exclusions.

The new bulletin requires that assessment of whether a shareholder proposal transcends ordinary business should be evaluated by looking at the significance of the proposal to the particular company that receives the proposal.

The new bulletin also shifts interpretation of micromanagement from Staff legal Bulletin 14L’s clear guidelines, toward a more subjective staff evaluation as to whether the proposal seeks a specific method, strategy, or outcome that the staff views as more appropriately determined by the board or management. Such new interpretations are anticipated to lead to an increase in the exclusion of environmental and social proposals and fewer such proposals appearing on proxy statements.

In a letter submitted on February 18, representatives of the Shareholder Rights Group, the Interfaith Center on Corporate Responsibility, and As You Sow requested that the SEC refrain from applying the guidance to shareholder proposals filed prior to the issuance of the bulletin: “Shareholders rely on Staff guidance regarding the shareholder proposal process when engaging the management of the companies they own. By filing proposals that adhere to the guidance, shareholders are able to present proposals more likely to conform to Staff understanding of the exclusions in Rule 14a-8. This streamlines the process for investors, companies, and the Staff. Applying new guidance to previously submitted proposals would unfairly penalize investors who followed the extant guidance in good faith, believing that they were following the procedures that would lead to clear results, limiting the need for the costly back and forth of the no-action process.”

Along with new regulatory guidance from the SEC, the investor right to file shareholder proposals has also come under attack from legislation in Congress and lawsuits filed in the federal courts in Texas. The new report, Shareholder Proposals: An Essential Investor Right, offers a detailed and thoughtful defense of shareholder proposals. It catalogues their role in creating a powerful public platform for challenging and improving corporate policies, practices, performance, and impacts and providing an important mechanism for surfacing investor perspectives on material issues. The report further demonstrates how shareholder proposals have enabled investors to safeguard their portfolios from risks and protect the American public by helping to catalyze positive corporate change on an array of issues.

Avocado-driven Deforestation in Mexico

The Avocado Industry’s Turning Point: How Corporate Accountability Is Reducing Deforestation in Mexico

In complex situations where environmental and human rights issues driven by a high-impact commodity are not adequately addressed by local regulation, corporations have the power to demand more from their suppliers. When this influence is directed properly, corporations can catalyze significant positive change for all stakeholders. This is demonstrated in the continuing evolution of Mexico's avocado industry, where shareholder engagement, political action, NGO efforts, and community organizing are helping corporations to address rampant illegal deforestation and its impacts.

Our insatiable demand for avocados has created serious environmental and social issues for Mexico. More than 10 football fields of Mexican forests are cleared daily for avocado orchards, with most of this deforestation violating federal law. Illegal deforestation has severe consequences: depleting community water supplies, destroying protected habitats including the Monarch Butterfly Biosphere Reserve, and enabling criminal activities through land seizures and corruption.

In 2023, a powerful New York Times exposé based on a Climate Rights International (CRI) report lifted the veil on the dark side of the avocado industry, exposing illegal practices that have been wreaking havoc on Mexico’s forests and communities for years. The CRI report reviewed satellite images of the same land over time to identify where unpermitted deforestation had occurred. Using that data, avocados from major importers could be traced back to orchards on illegally deforested lands, calling into question the sustainability of a substantial portion of the avocados sold in U.S. supermarkets.

The NYT exposé prompted a reaction. Environmental NGOs began to put pressure on policy makers and grocery chains to address avocado-driven deforestation. In February 2024, six U.S. senators urged the Biden Administration to support efforts to ensure that the US-Mexico avocado trade is not driving illegal deforestation. This collective call to action coincided with the 2024 Super Bowl, prompting action from Michoacán's governor and Mexico's agricultural secretary.

Noting this growing risk, As You Sow began engaging with leading U.S. retailers and distributors of avocados, raising awareness of illegal deforestation in their avocado supply chains and highlighting the practical solution sanctioned by the State of Michoacan: a system to trace and flag illegal orchards and a transparent certification system. Working with Guardián Forestal, a Mexican NGO specializing in GPS data, the State of Michoacan has created an online portal to verify avocado sourcing. The system is elegantly simple: orchards established before 2018 are considered legal - accounting for the six-year growth cycle of avocado trees - while newer orchards without federal permits are flagged as illegal.

The impact of the certification system was immediate and profound. By approaching the issue from both the top down and the bottom up, As You Sow worked with Mission Produce, a major avocado supplier, which committed to avoid the purchase of avocados from illegally deforested orchards. This was soon followed by certification commitments from other major avocado suppliers recognizing the system as a way to ensure ethical sourcing while protecting the environment.

Other retailers and distributors now have the opportunity to not only leverage this verification system to avoid illegal deforestation in the Michoacan avocado market, but to seek expansion of the tool to other Mexican states. By ensuring avocados aren’t coming from recently deforested land, companies can help disincentivize further deforestation in the region.

Solution-oriented action can solve the world’s toughest environmental and social issues. The collective action on avocado driven deforestation provides a blueprint for how industries can work through complex challenges and champion solutions for lasting and meaningful change.

Elizabeth Levy, As You Sow

Large Institutional investors Respond to the Proxy Voting Debate

This article draws from Dorothy S. Lund’s scholarly work, “The Past, Present, and Future of Proxy Voting Choice,” which surveys the evolution of U.S. proxy voting policies and details recent reforms by major index fund managers in response to political and public scrutiny.

The role of BlackRock, Vanguard, and State Street in U.S. markets has changed dramatically over the past two decades. Together, these managers hold massive stakes in most public companies and have become central players in corporate governance. This concentration, combined with the rise of index funds, prompted a lively policy debate: should a handful of big asset managers wield so much voting power?

Under pressure from policymakers and clients, especially on high-profile issues like ESG (environmental, social, and governance), these firms have responded by rolling out voting choice programs. BlackRock’s and State Street’s initiatives now allow a significant portion of institutional and some retail fund investors to guide votes based on selected policy templates. Vanguard has joined as well, expanding access to similar options.

While these programs do not yet put all voting power in the hands of individual investors, they provide new flexibility. Investors can opt into policies that match their priorities or values, such as sustainability or corporate governance best practices. The effectiveness and reach of these programs are still developing, but for the first time, a broad base of fund holders is participating, even if only indirectly, in corporate decision-making.

For example, board diversity is a common proxy voting topic where investors' preferences may vary. BlackRock’s 2025 proxy voting guidelines reflect a case-by-case approach to diversity voting decisions, removing rigid numerical targets but still emphasizing diversity’s importance relative to market norms.

Through BlackRock Voting Choice, institutional and eligible retail investors can now direct their pro-rata share of votes or select from third-party voting policies that might be stricter or more lenient on board diversity issues than BlackRock’s default policy. This means an investor who prioritizes board diversity could opt into a voting policy that votes against boards lacking sufficient gender or racial diversity, while another investor might choose a policy that applies a different threshold or focus.

This flexibility exemplifies the practical impact of voting choice programs: empowering investors to exercise their governance preferences on specific topics such as diversity, while still investing through large index funds. It also demonstrates how the Big Three are adapting governance oversight to evolving political and client demands.

---

Further reading.

What Is Proxy Voting Choice?

This analysis is based on Dorothy S. Lund’s 2025 article, “The Past, Present, and Future of Proxy Voting Choice,” published in the Journal of Corporation Law and available via Columbia Law School’s Scholarship Archive. Lund examines how new proxy voting systems have emerged as a response to concerns about the concentration of voting power among a small group of U.S. asset managers, especially the “Big Three”: BlackRock, Vanguard, and State Street.

Proxy voting allows shareholders to cast ballots on important issues at corporate annual meetings, and in recent years, several large asset managers have begun offering clients new choices in this process. “Proxy voting choice” is an innovation where funds give end investors—both institutional and, more recently, retail—the option to influence or directly choose how their shares are voted.

Traditionally, investment managers like BlackRock, Vanguard, and State Street controlled the voting rights for the millions of shares pooled in their investment funds. As these firms grew, concerns mounted about the concentration of voting power among just a few institutions. Critics pointed out that passive index funds have limited incentives to thoroughly research and vote on individual companies, potentially weakening effective corporate oversight.

In response, and after growing public and political pressure on topics like climate change and diversity, asset managers began creating “voting choice” programs. These let clients select from several third-party voting policies or the fund’s default approach. The approach is still voluntary and in its early stages, but millions of investors now have access to some form of voting participation—an important shift in how American corporate governance works. Participation rates and ultimate impacts remain to be seen, but proxy voting choice marks a major step toward democratizing shareholder voice in large public funds.

For example, BlackRock launched its Voting Choice program in 2022, which allows eligible clients—including institutional and some retail investors—to select from a menu of third-party voting policies or use their own. The program has expanded rapidly and now covers $2.7 trillion in index equity assets. More information is available on BlackRock’s official Voting Choice page

Similarly, State Street offers a Proxy Voting Choice program that permits eligible investors in institutional index funds and certain ETFs to decide how their pro-rata share of votes is cast. The program includes access to several third-party voting policies and continues to expand across eligible funds. Details can be found at State Street’s proxy voting page.

---

To access the full article, please click here.

Responsible Investment Requires a Proxy Voting System Responsive to Retail Investors

There is growing awareness amongst retail investors of the importance of environmental, social, and governance (ESG ) factors to the performance of their stocks. The same factors impact their lives from a broader societal and economic perspective. Institutional investors have incorporated ESG issues into their proxy voting and corporate engagement. Retail investors who invest in stocks directly have the same voting rights, and collectively a similar power, but data shows that their voting rates have declined precipitously over the past forty years. This chapter traces the history of property rights and proxy voting, examines them within the current regulatory context, and posits that economic rights have been well protected but ownership rights have been neglected. An established framework for stages of capitalism is re-imagined, situating retail investors’ disengagement from the proxy process and highlighting suggestions to regulators for addressing the proxy voting gap.

To read the full paper, please go to SSRN’s website.

Ian Robertson

University of Oxford

Corporate Support for DEI Continues Among Investors and Companies

August, 2025

During this proxy season, companies faced a wave of shareholder resolutions attacking diversity, equity, and inclusion (DEI) programs and calling for their eradication. This campaign expanded on last year’s anti-DEI attacks, as tracked in the “Championing Diversity in Corporations," which also included quotes from numerous companies strongly defending their diversity programs. This year’s anti-DEI resolutions built upon growing attacks on DEI by various government agencies and right-wing critics, who argued that company diversity programs were on the way out. Interestingly, these anti-DEI resolutions conveyed the exact opposite message, demonstrating that investors and companies alike believe that diversity has a positive impact on employees and long-term shareholder value.

In fact, in this proxy season, approximately 98% of the shares voted to maintain current corporate diversity, equity, and inclusion programs. Companies including Disney, Costco, Visa, Apple, Deere, Boeing, Goldman Sachs, Levi’s, AMEX, Coca-Cola, Berkshire Hathaway, Bristol Myers, and Gilead Science saw near-unanimous votes, averaging a mere 2% shareholder vote supporting these resolutions, sending a clear message to the boards that shareholders support the business case for non-discrimination in employment and a diverse workforce.

Many of these companies under attack remained publicly committed to their longstanding DEI programs. Corporations like Costco, JPMorganChase, Delta Air Lines, American Airlines, Southwest Airlines, and Apple continue to view diversity as a cornerstone of their workforce strategies, refusing to back down despite mounting pressure from conservatives.

These companies fully understand the benefits of having diverse teams and leadership. For example, a review by As You Sow and Whistle Stop Capital of over 1,600 companies found that manager diversity is positively associated with key financial performance indicators, including return on equity and invested capital, revenue growth, and share price performance.

Similarly, a recent investor brief by the Canadian organization SHARE found that diversity, equity and inclusion add to company performance and, therefore, shareholder value. If a company eliminates or dilutes efforts to promote diversity, they are neglecting that benefit and adding risk for investors. Simply stated, the data shows that diversity is good for business.

The following is an excerpt from a series of quotes and public statements from Senior executives on DEI. This is a small snapshot of company statements, but it clearly demonstrates the fact that numerous leading corporations strongly resist these attacks and stand behind their commitment to non- discrimination and diversity. At the end we also include relevant articles.

AMERICAN EXPRESS:

"We Embrace Diversity: We believe that diversity of experiences, perspectives, and backgrounds enables us to be our best."

BOEING

“Boeing remains committed to recruiting and retaining top talent and creating an inclusive work environment where every teammate around the world is respected, valued, and empowered to succeed," and defended its "culture of nondiscrimination, inclusion, and meritocracy."

COCA-COLA

"Creating a culture of diversity, equity and inclusion. Diversity, equity and inclusion are at the heart of our values and our growth strategy and play an important part in our company's success." 

GOLDMAN SACHS

“We run an inclusive organization, and we’re going to continue to run an inclusive organization.” - David Solomon, CEO, Goldman Sachs

JPMORGANCHASE

“We will continue to reach out to the Black community, the Hispanic community, the veteran’s community, and LGBTQ. We have teams with second chance initiatives — governors in blue states and red states like what we do.” - CEO Jamie Dimon in a CNBC interview.

MICROSOFT

“If ever there were a critical time for the business case for diversity and inclusion in the workplace, it is now… Our innovation has come from our commitment to Diversity and Inclusion (D&I), and our future innovation depends on D&I.”

---

To read the full article, please click here.

This document was drafted by Maxwell Homans, Shareholder Advocacy Associate, Mercy Investment Services, in partnership with Tim Smith, Senior Policy Advisor, ICCR.

SEC Increases Exclusion of Proposals - 2023-2025

In order to help companies decide whether a proposal passes these tests, the SEC has developed a process to allow companies to ask the SEC in advance whether a proposal must be included in the meeting materials. The “no action” process is an informal review process through which the SEC staff advises companies and their investors on whether the SEC staff would likely recommend enforcement action if a company fails to include a submitted shareholder proposal on its annual proxy statement. The staff grants the company’s request if it finds some basis to agree with the company’s arguments that the proposal is excludable under one of the elements of SEC Rule 14a-8. It denies the request if it is unable to concur with the company’s arguments.

SEC Rule 14a-8 is intended to exclude trivial, irrelevant, and inappropriate shareholder proposals, thus minimizing the burden on companies. The no action process is a structured, time-tested process that adds an additional layer of objective scrutiny to company decisions regarding whether to include or exclude proposals, which serves to protect investors’ interests. If an investor disagrees with the no action decision by the SEC, the investor can submit a letter in opposition, but it does not have legal recourse against the SEC. Without Rule 14a-8 and the no action process, an investor only has the option to sue the company under federal law if it disagrees with a company’s decision to not place a proposal on the proxy, which would add delays, and significant costs for both parties.

The SEC staff periodically recalibrates its interpretation of the rules of the no action process to reflect current issues of concern to investors and companies. For example, in 2021, the SEC staff issued an interpretive bulletin, Staff Legal Bulletin 14L, which clarified ordinary business and micromanagement rules in a manner that allowed some environmental and social proposals to reach the proxy that might not have qualified in a prior interpretation. However, following market response and criticisms, the staff tightened up its interpretations of micromanagement and excluded many proposals on social and environmental issues that had previously been allowed, even with the new bulletin remaining in place. From November 1, 2023 to May 1, 2024 the SEC staff supported company requests for exclusion of proposals roughly 68% of the time, similar to the average exclusion rate during the first Trump administration, from 2017-2020, which was 69%.

In the 2025 proxy season, the staff again tightened its interpretation of the micromanagement rule, excluding, for example, proposals on lobbying disclosure that had previously been permissible since at least 2011. On February 12, 2025, the SEC staff signified that it is taking a more restrictive posture on proposals that request specific forms of disclosure or actions by companies. SLB 14M issued on that day revoked SLB 14L and altered staff interpretations of the micromanagement, ordinary business and relevance exclusions. The new interpretations led to an increase in the exclusion of environmental and social proposals, and fewer such proposals appearing on proxy statements. Of particular note in SLB 14M is a shift in interpretation of micromanagement from SLB 14L’s focus on the interest and capacities of shareholders to understand and vote on an advisory proposal, and toward an evaluation as to whether the proposal seeks a specific method, strategy or outcome that the staff views as more appropriately determined by the board or management.

When Public Sentiment Drives Shareholder Strategy

How headlines, hashtags, and media cycles are reshaping proxy season

Do public opinion and media narratives really influence shareholder proposals? A new study says: yes, and in some cases, that influence is financially material.

Analyzing proposal volumes and public discourse, the authors find that:

• Increased public salience of corporate issues (like AI ethics, reproductive rights, or climate impacts) correlates with a rise in ESG-focused proposals;

• These proposals are more likely to receive broader investor support when they align with media attention and reputational risk;

• And when companies respond constructively, firm value tends to improve.

📉 Sentiment as an Early Warning Signal

For investors, public opinion is often a precursor to regulatory or reputational risk. Think of social movements that preceded litigation, consumer backlash, or regulatory intervention—public scrutiny often arrives before the balance sheet feels the impact.

This study confirms that investor engagement is increasingly attuned to reputational signals and that media awareness serves as a “soft metric” for materiality.

“In today’s democratized information environment, companies can no longer operate behind closed doors, shielded from public scrutiny. Shareholders, armed with public sentiment data, are increasingly willing to hold management accountable. This new reality underscores the importance of transparency and responsiveness in maintaining investor trust and long-term value creation. ”

These insights have significant implications for both corporate leaders and investors. For management, the warning is: ignoring public sentiment can lead to increased shareholder activism and leadership turnover. For investors, our findings highlight the effectiveness of acting with the public’s voice in leading to corporate change.

Refer to the original article here.

Shareholder Voting and Corporate Governance

Why shareholder voting isn’t just symbolic—it’s structural

It’s easy to take shareholder voting rights for granted. But according to David Yermack (2010), voting is not just a procedural ritual—it’s a foundational component of corporate accountability.

Yermack’s comprehensive review of governance literature demonstrates that strong voting rights correlate with better corporate outcomes, including:

• Lower CEO entrenchment,

• Greater board independence,

• More responsive management,

• And ultimately, improved long-term firm performance.

These effects are especially visible in firms where shareholders have actively used proposals or majority voting to reshape governance policies. This article reviews recent research into corporate voting and elections. Regulatory reforms have given shareholders more voting power in the election of directors and in executive compensation issues. Shareholders use voting as a channel of communication with boards of directors, and protest voting can lead to significant changes in corporate governance and strategy. Some investors have embraced innovative empty voting strategies for decoupling voting rights from cash flow rights, enabling them to mount aggressive programs of shareholder activism.

🛠️ Voting Rights as Investor Tools

Proposals to declassify boards, require majority voting for directors, or separate the CEO and chair roles aren’t just governance “theater.” They are functional tools that:

• Enable greater transparency,

• Shift power away from entrenched insiders,

• And reinforce the board’s accountability to long-term owners.

⚠️ A Warning Against Restriction

Yermack cautions that undermining shareholder voting mechanisms—whether by limiting proposal access or weakening vote influence—reduces a key market check on managerial behavior.

As policymakers revisit the rules around 14a-8, Yermack’s work offers a timely reminder: Shareholder voting is governance. Curtailing it risks undercutting the integrity of the capital markets themselves.

📚 Further Reading- Shareholder Voting and Corporate Governance

The Role of Shareholder Proposals in Corporate Governance

Luc Renneboog, Peter G. Szilagyi, July 27, 2010

This paper offers evidence on the corporate governance role of shareholder proposals by simultaneously investigating the selection of target firms and the proposal outcomes in terms of voting success, implementation, and stock price effects. Using 2,436 proposals submitted between 1996 and 2005, a sample of 1,961 target and nontarget firms, as well as extensive controls for governance quality, we make several contributions to the literature. First, we find that shareholder proposals tend to be targeted at firms that both underperform and have generally poor governance structures. The results show that regardless of the proposal objectives, submissions are more likely to be made against firms that (i) use antitakeover provisions to entrench management, (ii) have ineffective boards, and (iii) have ill-incentivized CEOs. More detailed analysis reveals that target selection is largely driven by governance concerns irrespective of the sponsor type. Overall, these findings provide very limited basis to the claim that activists such as union pension funds pursue self-serving agendas. . . .

[T]he paper provides clear evidence that the market views shareholder proposals as a relevant device of external control. The stock price effects are most fundamentally driven by the target firm’s prior performance and governance quality. At the same time, they are strongest for proposals that win a majority vote as well as pass, which indicates that the market anticipates voting success reasonably well. Nonetheless, while voting outcomes and implementation rates have improved dramatically over time, the market returns are strongest during stock market peaks when there is a high premium for good governance.

Read full paper

Amazon’s GHG Emissions

Amazon Lags Peers in Scope 3 GHG emissions Disclosures

PARKER CASWELL , Climate and Energy Associate, As You Sow

Scope 3, or value-chain emissions, account for an average of 75% of a company’s total greenhouse gas (GHG) emissions, rising to over 90% in the retail sector. While challenges persist in assessing Scope 3 emissions – including data availability and quality concerns – assessing these emissions is critical to any credible climate strategy. Only by acting to assess value-chain emissions will data quality improve.

Scope 3 disclosures provide vital insights into a company’s overall emissions impact. While Scopes 1 and 2 operational emissions disclosures offer a partial glimpse into a company’s direct climate impact, operational emissions are inextricably tied to upstream and downstream product- related emissions – which are captured only within Scope 3. Ignoring these emissions is akin to missing the forest for the trees: By focusing only on operational emissions, the much larger picture of a company’s emissions is ignored.

Consider Amazon. The company’s current Scope 3 disclosures address approximately 1% of the products sold on its retail platform, giving an incomplete impression of its value-chain emissions. In contrast, Walmart reports Scope 3 product-related emissions for all its retail sales, giving investors a clearer understanding of its climate impact. Walmart’s ongoing efforts to measure and reduce its full value-chain emissions not only contribute to meaningful climate action but also reduce its exposure to climate-related financial risks and create affirmative benefits.

By engaging value-chain partners to measure and reduce Scope 3 emissions, Walmart has gained a competitive edge through increased supplier efficiency, addressing consumer and employee climate concerns, avoiding greenwashing risks, and anticipating suppliers’ climate- related problems. Amazon’s incomplete Scope 3 disclosures leave investors in the dark about the emissions footprint of its vast product portfolio, all while regulatory and legal risks grow. Failing to assess full value-chain emissions is not just a climate and reporting concern – it’s a fundamental business risk. Ignoring data on a material risk factor, particularly for a corporation as sophisticated as Amazon, is simply bad business.

Despite overwhelming evidence that Scope 3 disclosures are financially and environmentally prudent, Amazon continues to cite low data quality and limited availability as an excuse for inaction. Walmart has been clear that its Scope 3 data evaluation methods and quality will evolve over time and that shifts in reported emissions are not failures but reflect the evolving nature of emissions accounting and the urgent need for action. Scope 3 data will never be perfect, but Walmart has demonstrated that even imperfect data can drive gigaton-scale emissions reductions. Other major U.S. retailers, including Target and Costco, are also improving their Scope 3 disclosures.

To address the growing legal and regulatory risks posed by Amazon’s insufficient Scope 3 disclosures and to prepare for mandatory emissions reporting, Green Century and Amalgamated Bank, represented by As You Sow, along with Proxy Impact, have filed a proposal requesting that Amazon disclose Scope 3 emissions for all retail sales. This proposal, if acted on, will bring Amazon in line with its more sustainable peers, improve investor understanding of the company’s emissions, reduce climate-related risk, and enhance Amazon’s global competitiveness.

For a more detailed overview of climate-related proposals from the 2025 Season, read the 2025 Proxy Preview.

The Value of Environmental and Social Proposals

Evidence of sustainable value raised in environmental and social proposals

Shareholder proposals frequently address risks due to environmental issues that can be highly costly to companies and their investors when they ultimately materialize in the near- or long- term. Consider that the shareholder value of BP plummeted by 55% after the explosion of the Deepwater Horizon oil rig, from $59.48 per share on April 19, 2010 to $27 per share on June 25, 2010. Climate change-induced changes in severe weather such as drought and flooding, as well as regulatory responses and constraints in various markets worldwide, has been documented to threaten substantial financial risks to the banking, mining, industrials, transportation, agriculture and real estate sectors. Bringing greater transparency to the management of such risks has been the subject of shareholder proposals in these sectors.

Corporations also face risk related to social issues such as disruption of the business or supply chains due to human rights abuses workforce health and safety scandals or failures to protect the online safety of children. The growth in environmental and social shareholder proposals over the last several years also reflects concern that certain issues threaten the economy as a whole and large swathes of investment portfolios.

“Informed investors are often early movers on addressing risks that ultimately prove to be quite material, and even existential, to their investments. As an example, proposals filed by members of the Interfaith Center on Corporate Responsibility ICCR) against predatory lending in the early 2000s at AIG and other companies.43 At the time, these proposals might have been characterized as merely addressing social risks yet they foreshadowed the banking crisis driven by such predatory practices that proved to be very expensive for AIG and the other companies, and for society in the housing crisis and bank bailouts that followed.”

Shareholder proposals also mirror public sentiment. A recent study of companies in the Russell 3000 Index found that negative public sentiment about a firm on both financial and broad sustainable investing aspects are significantly related to the number of shareholder-sponsored proposals, with the impact of news sources being slightly stronger than social media in affecting the number of shareholder proposals. The study also found a strong association between the number of shareholder proposals on the ballot and director turnover and forced turnover of CEOs at the firm, finding one additional shareholder proposal is associated with a 10.9% increase in director turnover and a 24.8% increase in forced CEO turnover, both to the mean. The study not only found association between these factors; it also was able to demonstrate causal evidence that negative sentiment around corporate practices that are not sustainable leads to increased shareholder dissent.

Climate Shareholder Proposals Show Real Market Value

Climate-focused proposals boost shareholder wealth

For years, critics dismissed climate-focused shareholder proposals as distractions—“political,” “non-financial,” or simply too speculative. But a major 2024 study by Berkman, Jona, Lodge, and Shemesh turns that argument on its head. Published in the Journal of Corporate Finance, the study rigorously analyzed thousands of environmental shareholder proposals (ESPs) filed between 2006 and 2021 across Russell 3000 companies—and found a clear signal: markets reward climate proposals.

📈 Filing Climate Proposals? Markets Notice.

The researchers measured stock price reactions around proxy filing dates and found that climate-related proposals generated significantly positive abnormal returns—stronger than proposals tied to other environmental issues. These returns weren’t just random noise: the researchers used regression discontinuity methods around voting thresholds to isolate causal effects. Their results indicate that:

• Climate proposals were more likely to elicit supportive action from management when markets reacted positively.

• This suggests that boards recognize the economic substance behind these proposals, not just the optics.

🌎 Why This Should Reshape the ESG Debate

The paper undercuts the idea that ESG is separate from financial materiality. Climate risk—in the form of emissions exposure, stranded asset concerns, supply chain volatility, and regulatory pressure—has real and quantifiable value implications. Shareholder proposals targeting these concerns are not niche or ideological; they are market signals of unmanaged risk.

For institutional investors, this research strengthens the argument that voting in favor of well-constructed climate proposals isn’t just a values move—it’s a fiduciary imperative.

📘 Read the study: Berkman et al. (2024), The Value Impact of Environmental Shareholder Proposals