The support for U.S. shareholder proposals focused on environmental and social issues has dramatically decreased to 16% on average throughout the past year from its previous 32% level three years ago according to Morningstar data.
The decrease in institutional investor support occurs because they want to prevent their involvement in controversial matters during this politically tense period. The decrease in ESG proposal support stems from President Donald Trump’s negative comments about corporate ESG initiatives together with rising Republican congressional oversight.
Leslie Samuelrich from Green Century notes that major investors now exercise greater caution because they want to protect their customer relationships. The resolutions about climate and biodiversity presented by her firm received only 13.6% support this year compared to 21% in 2024.
The reduction in support for proposals results from enhanced corporate disclosure practices. T. The investment firm T. Rowe Price reduced its support for proposals this year because they found company disclosures to be more comprehensive.
The ESG activist community now faces reduced opportunities to challenge companies because of their improved readiness according to Jasper Street Advisors’ Marc Lindsay. “Companies are better prepared.”
The ESG boom reforms continue to exist despite decreasing shareholder support. The data indicates that shareholder focus on financial performance has increased which may lead to more resistance against future proposals.
