Investors Eye Proxy Efforts on Climate, AI, Diversity in 2025

Shareholder advocacy groups are beginning to press companies on a host of environmental and social issues that could go to a vote next proxy season, from new deforestation concerns to ongoing worries about transparency over artificial intelligence technology.

At the same time though, investor activists are bracing for possible setbacks under the second Trump administration that threaten to limit their ability to file future environmental, social, or governance-related proposals.

Under new Republican leadership, the Securities and Exchange Commission is expected to eventually shed 2021 guidance that made it easier to advance shareholder activist bids on ESG issues. That sets the stage for an especially consequential proxy season in 2025, pressuring investors to affect change ahead of potential SEC restrictions or additional corporate moves to limit proposals.

“We will continue to push for corporate changes when the value of our investments is at risk,” said New York State Comptroller Thomas DiNapoli, whose office files shareholder bids on behalf of the New York State Common Retirement Fund. “If there is greater pushback on investors seeking constructive changes through shareholder proposals in 2025, there are other tools investors can use to achieve our goals, including increased votes against board directors,” DiNapoli added.

Companies that receive shareholder proposals as submissions for their annual meeting ballot often seek the SEC’s blessing to avoid votes on issues that they see as micromanaging, for example. Exxon Mobil Corp. took pushback on proposals a step further this past season when it sued shareholder activists to get them to rescind a climate change bid.

Any Trump administration rollbacks on investors’ ability to file proposals on issues like deforestation would be harmful to businesses in the long run, said Danielle Fugere, president of shareholder advocacy group As You Sow.

“The shareholder work we do is about raising issues and concerns that could impact companies and then getting out in front of it,” Fugere said.

As You Sow is planning a set of environmental protection proposals for this coming proxy season that will ask large retailers how effectively their corporate policies prevent sourcing avocados from deforested land.

Environmental Issues

Another new slate of environmental bids in the works by Green Century Capital Management urges food, beverage, and consumer packaged goods companies to make sure their recycling labels aren’t misleading. Green Century recently had success convincing hotel chains to set plastics reduction goals.

Annie Sanders, Green Century’s director of shareholder advocacy, said this proxy season feels “a bit more highly charged” after the Exxon lawsuit and with the imminent administration change at the SEC. Sanders said she’s especially mindful of how her asks are worded to avoid potential challenges by companies.

“It’s better to be cautious as we wade into the new season, but we don’t want that to impact our efforts,” she said.

During the most recent proxy season, a new shareholder advocacy group, the Accountability Board, pulled off rare corporate ballot wins at Jack in the Box and Wingstop. A majority of shareholders backed its bids asking the fast-food chains to set greenhouse gas emissions reduction targets for the first time.

Now, the group has a new fast-food target: it’s filed several proposals at companies from McDonald’s to El Pollo Loco asking them to better measure and reduce food waste to save money and limit environmental impact.

Artificial Intelligence

Shareholders also continue to pressure big tech companies with AI-related proposals, after raising the issue in first-time proposals this past proxy season. Proposals seeking corporate transparency on a range of AI-related risks, from misinformation to data privacy, have garnered some momentum at annual meetings so far.

Other bids focused on AI’s implications for workers, like potential hiring discrimination or layoffs, have fared relatively well in shareholder votes. Though AI proposals haven’t yet reached the majority support needed to pass, some have gotten enough investor backing to spur a corporate response.

Apple Inc. announced that it would disclose more about its AI plans after a proposal seeking AI-related business and ethics information received 37.5% support from shareholders this past February.

Microsoft Corp. faced three shareholder bids on AI in votes at its annual meeting earlier this month. A proposal raising concerns that Microsoft could use unethical or illegal data sources to train generative AI secured 36% of investor support.

“Responsible use of AI is a growing area of focus for investors,” said DiNapoli, whose office is finalizing its 2025 shareholder proposal filings. “Many companies are deploying AI without adequate safeguards, transparency regarding its usage, governance frameworks, or ethical guidelines,” he said.

The New York State Common Retirement Fund is also considering filing separate resolutions focused on cybersecurity risks for next year, the comptroller’s office said.

Diversity

Shareholders also took notice as some corporations backed away from certain diversity, equity and inclusion commitments this year. As You Sow has filed bids for upcoming votes at a handful of companies, including Ford Motor Co. and Harley-Davidson Inc., asking them to detail the research and analysis their boards carried out before changing diversity policies in recent months.

The companies withdrew from an index organized by the LGBTQ advocacy organization Human Rights Campaign after facing pressure from conservative social media influencer Robby Starbuck.

Fugere said there is a concerted effort among shareholders to scrutinize corporate diversity rollbacks next year.

“Investors don’t want to see companies precipitously taking back policies they’ve had for a long time that the companies themselves admit are important to their bottom line,” she said.