Top Five Takeaways From the 2025 Proxy Season

Introduction

The 2025 proxy season unfolded amid political pressure and regulatory change. A new administration brought a significant shift in the regulatory environment, with revised SEC guidance on Regulation 13D/13G beneficial ownership rules dampening some investor engagement activity. In addition, changes to the SEC’s 14a-8 “no-action” process led to a 30% decline[1]  in the number of shareholder proposals voted related to environmental, social, and governance issues.

Given this regulatory and political backdrop, here are our top five early takeaways from the 2025 Proxy Season.

1. Support for environmental proposals from both proxy advisors and investors sharply declines. ISS opposed every environmental proposal in both the S&P 500 and the Russell 3000 this proxy season, a dramatic reversal from 2024. Last year, the proxy advisor backed more than half of the environmental proposals voted at S&P 500 companies. Most environmental proposals sought additional disclosure GHG emissions targets and climate-related risk disclosures with some newer ones addressing biodiversity and nature loss. The shift comes in the wake of a broad executive order aimed at expanding domestic energy production, alongside increased scrutiny of institutional investors’ climate-related initiatives. ISS has also noted[2] improved overall corporate climate disclosures as a contributing factor.  Investor support has continued to decline, dropping from 18% last year to just 11% in 2025. As in 2024, not a single proposal passed this season. While part of the drop potentially reflects overly prescriptive demands from some proposal sponsors along with more robust existing disclosures, the political and legal attacks on investors focused on climate likely further chilled their support.

2. Social proposals see diminishing support in a politicized environment. Investor support for social proposals is also slipping, down from 18% to 14% year-over-year. Proposals related to political contributions garnered the highest levels of support, particularly at companies trailing their peers in transparency and disclosure. Consistent with prior years, a notable number of proposals focused on conducting independent third-party audits to assess human rights risks across supply chains and working conditions. However, as such practices have become increasingly embedded among S&P 500 companies, and institutional investors adopt a more discerning approach, the decrease in support is both expected and indicative of a broader recalibration likely to continue.

3. Governance proposals remain popular, but support is on the decline. ISS backed 56% of governance proposals in 2025, a modest increase from 54% last year. However, despite the uptick in recommendations, average investor support declined slightly from 35% to 33% and a lower percentage of proposals passed (15% compared to 18% last year). Proposals focused on stronger shareholder rights, with those calling on issuers to adopt simple majority vote standards drawing the highest support at an average of 72%. Efforts to lower the ownership threshold for calling special meetings (to 10–15%) also gained momentum. Support for proposals requiring shareholder approval of executive severance agreements has grown as well, despite fairly strong support for say-on-pay proposals.

4. Anti-ESG and anti-DEI shareholder proposals continue to receive single-digit support. Average support dropped from 1.9% to 1.4%, and only one proposal received higher than 3% support. Frequent proponents targeted companies’ existing DEI programs and goals, in many cases citing June 2023 U.S. Supreme Court decision from Students for Fair Admissions v. Harvard College. Companies’ evolving approach to DEI appears to be driven by legal considerations, rather than shareholder activism.

5. Regulatory caution significantly impacts engagement. Lower investor support for shareholder proposals was accompanied (or perhaps driven) by a drastically changed engagement environment. In response to the new 13G/13D guidance and to avoid any perception of “seeking control,” many large institutional investors temporarily paused engagement meetings. They shortly resumed under a tightly controlled, “listen-only” format, deliberately excluding any discussion of vote implications or other elements that may be construed as activist.

Conclusion