2025 has seen a notable slide in corporate support for Environmental, Social, and Governance (ESG) initiatives. With shareholder proposals sharply dropping, the once-fiery enthusiasm for green practices is fizzling out. Environmental submissions now only make up 17.3% of total proposals as investors shift focus toward governance and executive pay, where median CEO salaries are ballooning like a beach ball at a summer picnic. Curious about the shifting dynamics behind these trends? There’s more to uncover!
Corporate ESG Support Diminishes in 2025
In the 2025 proxy season, corporate ESG (Environmental, Social, and Governance) support is taking a nosedive, much like a daredevil pilot who misjudged their stunt.
Once flying high with proposals aimed at sustainability and social responsibility, the landscape has shifted dramatically, leaving many investors scratching their heads.
The number of shareholder proposals has plummeted, while the number of omitted proposals has surged, signaling a growing fatigue among institutional investors. Omitted proposals have increased to about 25% this year, signaling a growing fatigue among institutional investors.
It’s as if the once-bustling marketplace of ideas has turned into a ghost town, where only whispers of proposals remain.
Environmental proposals, once the darlings of the proxy season, have nearly doubled since 2020, now making up 17.3% of all submissions.
Environmental proposals, once the shining stars of the proxy season, now account for 17.3% of submissions, having nearly doubled since 2020.
Ironically, despite their rise, momentum is fading.
GHG emissions resolutions, which typically call for companies to spill the beans on their greenhouse gas emissions, are still prevalent but are witnessing dwindling enthusiasm.
Investors, it seems, are shifting their focus like a cat chasing a laser pointer, moving away from environmental issues toward governance concerns, particularly executive pay.
The three pillars of ESG provide a framework for evaluating corporate sustainability, but their relative importance appears to be shifting in today’s investment landscape.
Speaking of pay, median CEO salaries have reached unprecedented heights, prompting a slight decline in Say-on-Pay support.
While investors generally support compensation, the tide may be turning as they become more vocal about how much is enough.
Add to this mix the surge of anti-DEI (Diversity, Equity, and Inclusion) proposals, where support levels hover around a meager 0.8% to 2.3%.
It’s a politically charged battlefield where DEI remains under scrutiny, leading to a tangled web of proposals that leave many baffled.
With the rise of counter-ESG proposals, many boards may concede to counter-ESG proposals that challenge traditional governance principles, further complicating the landscape.
As the proxy season unfolds, it remains to be seen whether corporate governance will find its footing again or continue to spiral into the abyss of declining support.
