Shareholder resolutions focused on proposals concerning governance-related matters have been gaining ground over environmental and social proposals amid a decline in the overall number of filings this AGM season, according to observers.
Lindsey Stewart, director of stewardship and policy at Morningstar Sustainalytics, said the number of shareholder proposals this year looks on track to be lower, following changes in Securities and Exchange Commission (SEC) guidance in February.
Bonnie Groves, senior specialist, stewardship and collaboration at the Principles for Responsible Investment, said that filings on governance-focused resolutions have remained steady, with these being the only ones to have received over 50% support from independent shareholders so far this proxy season.
“This has been a gradual but clear shift from the figures in 2022 where, of the 38 shareholder proposals that gained over 50% support, the split was relatively equal between environmental, social and governance-related proposals,” she said.
Her comments come as the AGM voting season in Europe and North America nears an end.
There were still some wins for climate and social shareholder proposals this year, according to Penny Fowler, interim co-director of corporate engagement at ShareAction.
“While it was predicted that the 2025 AGM season would be a tough one for responsible investors faced with political pressures and an intensifying ESG ‘backlash’, it has been encouraging to see that many remain committed to exercising their shareholder rights in support of social and climate action,” she said.
This year’s proxy season shows continued stronger sustainability focus among European shareholders compared with those in the US.
In the UK, resolutions targeting low wages at retail giant Next and liquid natural gas plans by Shell received over 20% shareholder support, a level that requires companies to explain what actions they intend to understand the reasons behind the protest, and report back within six months.
“We hope asset owners are watching closely this season to ensure asset managers are truly acting in their best interests at this critical time”
Penny Fowler, interim co-director of corporate engagement at ShareAction
Similarly, climate resolutions at BP and Equinor also showed sustained pressure on climate alignment, according to the PRI’s Grove.
“Despite political headwinds in some markets, climate-related concerns remain a focus for shareholders at major oil company AGMs this season,” she said. “A significant minority (over 20%) of shareholders at BP, Shell, and Equinor cast votes expressing concern about the alignment of corporate strategies with climate goals.”
Stewart said the trend towards lower average support for shareholder resolutions, particularly for environmental and social proposals, shows no sign of reversing.
“Amid lower activity in the US, the vote results on environmental and social shareholder proposals at Shell and Next in the UK stand out as evidence of continued stronger sustainability focus among European shareholders compared with their US peers,” he said.
Chevron shareholders voted against three proposals during the US oil firm’s annual meeting this week, including one calling for a report on the company’s human rights practices, while its rival ExxonMobil faced no investor resolutions for the first time in decades.
Misalignment
The misalignment between asset owners’ ESG expectations and the actual voting behaviour of asset managers has become a growing concern this year, according to both Stewart and Fowler.
Fowler said asset owners should remain concerned about the very low support from asset managers for shareholder resolutions aimed at tackling social and environmental issues.
“Last year support for such resolutions hit rock bottom, with only 1.4% of proposals receiving majority support. We hope they are watching closely this season to ensure asset managers are truly acting in their best interests at this critical time,” she added.
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