Securities and Exchange Commission's rule modification criticized as a breach of fair legal proceedings by As You Sow's Fugere
In the current regulatory climate of the United States, investors are showing a growing reluctance to file climate-related shareholder resolutions. This trend is primarily driven by a more challenging environment marked by political and legal hurdles, deregulation, and tighter rules on investor engagement imposed by the Securities and Exchange Commission (SEC).
This shift has led to a significant decline in environmental and social (E&S) shareholder resolutions. According to data, there was a nearly 30% drop in shareholder resolutions on ESG issues in 2025, with environmental and social resolutions falling 44% compared to the previous year. Furthermore, fewer E&S resolutions are reaching significant shareholder support (≥30%), indicating weaker investor enthusiasm for sustainability demands.
One of the key contextual factors is the SEC's climate disclosure rules, which have faced political and legal setbacks, resulting in the abandonment of detailed climate risk reporting mandates. This reduction in regulatory incentives and clarity for filing such resolutions has contributed to the current situation.
Moreover, investor engagement is under tighter regulation following updated SEC guidance issued in early 2025, making activism more complex and resource-intensive. Despite federal deregulation, investor pressure persists in some state-level jurisdictions and via voluntary international disclosure standards, but overall investor focus has shifted toward more targeted, research-driven engagement rather than broad climate resolutions.
Danielle Fugere, president and chief counsel of shareholder advocacy group As You Sow, attributes this decrease to a 'wait and see' attitude regarding changes in the administration and the potential impact on shareholder proposals. She also criticized the timing of the SEC's revision of regulations 13D and 13G, stating it made it more burdensome for investors to meet reporting requirements.
As of early April, investors in US companies have filed approximately 34% fewer climate-related resolutions this year. According to As You Sow, only 84 climate resolutions had been filed. The podcast discussion focused on the challenges faced by investors due to uncertainty around the regulatory framework.
Despite these challenges, climate change remains the issue attracting the most attention from investors, with transition planning becoming a key priority. As You Sow's priorities are evolving, with Fugere indicating that the campaign group is now looking at companies that use oil and gas, such as those involved with AI, as opposed to focusing solely on utility engagement.
Fugere believes that the process to establish the legality of filing proposals is nearing completion, and she suggests that the demand for AI and its electricity use should be directed towards renewables. She has also spoken about these issues on the As You Sow website podcast, where she discussed the challenges faced by investors due to regulatory uncertainty.
It is essential to note that investors have faced legal action from the judiciary committee and red state attorneys general related to ESG issues over the past couple of years. However, Fugere did not mention any specific legal actions related to ESG issues in this discussion.
In conclusion, the more challenging regulatory environment, reduced federal mandates, and increased compliance burdens for engagement have contributed to investors' reluctance to file climate-related shareholder resolutions in the current US environment.
- In the realm of environmental science, Danielle Fugere, the president of As You Sow, suggests that the use of AI by oil and gas companies should shift towards renewable energy sources, as climate change remains a pressing issue attracting the most attention from investors.
- The decline in environmental and social (E&S) shareholder resolutions, including climate-related resolutions, can be attributed to the more challenging regulatory environment and stricter rules on investor engagement imposed by the Securities and Exchange Commission (SEC), which has led to a 'wait and see' attitude among investors.
- Despite the current reluctance of investors to file climate-related shareholder resolutions due to regulatory uncertainties and increased compliance burdens, a key priority for investors is transition planning, focusing on sustainable and renewable energy sources in the business sector.
