Trends and challenges in sustainability-related shareholder resolutions

The PRI studied sustainability-related shareholder resolution data across the 2022, 2023 and 2024 proxy seasons and identified 133 majority-supported resolutions. Using this data, we looked at:   

1. How corporate boards responded to the resolutions; and
2. How that response has changed in recent years.   

We found that, while the number of sustainability-related resolutions has grown year on year, support for them is going down. Where resolutions receive majority support, it takes time for companies to act and there may be barriers to overcome.   

To support the implementation of shareholder resolutions, investors need to maintain continuous engagement with companies as part of their active ownership strategy.   

The use of shareholder resolutions  

Shareholder resolutions provide investors with a mechanism to raise key concerns publicly to an investee company’s board and other shareholders and can strengthen engagement with investees. They act as an important tool for information exchange between investors and investees.    

The option to file a shareholder resolution sits within an investor’s wider stewardship and active ownership strategy. Our research indicates that investors are not only continuing to file resolutions to bring ESG-related issues to the attention of their investee boards, but the quantity of resolutions is increasing. 

Table 1: Sustainability-related shareholder resolutions by theme ^[1]

Year / theme	Overall	E & S	G
2022	469	262	207
2023	529	336	193
2024	539	307	232

• The number of sustainability-related shareholder resolutions put to vote in the regions^[2] that we studied rose significantly between 2022 and 2023; the increase in 2024 was more modest.  
• The 2022 and 2023 proxy seasons saw an increased focus on environmental (E) and social (S) issues compared to 2021, this decreased in 2024.  
• Following a dip between 2022 and 2023, the number of governance (G) resolutions increased in 2024.  

Investor support for sustainability-related shareholder resolutions 

The Financial Times reported that, when a shareholder resolution attains more than 20% votes in favour, investors expect the company’s directors to engage directly on the issues raised to ensure board oversight and address the proponent’s concerns.  

Average investor support for sustainability-related shareholder resolutions fell during the period we studied, from 30.3% in 2022 to 19.5% in 2024 (table 2).   

Table 2: Average shareholder support for sustainability-related shareholder resolutions ^[3]

Year / theme	Overall	E & S	G
2022	30.3%	28.2%	33.0%
2023	21.1%	17.7%	26.9%
2024	19.5%	15.0%	25.4%

Factors contributing to reduced shareholder support could include:  

• Changes in wider company/board strategies; 
• Investor expectations;  
• Resolutions being too demanding or prescriptive; 
• The political landscape;  and
• Regulatory developments.   

The declining support for shareholder resolutions highlights the importance of withdrawal as an effective alternative strategy to influence company behaviour. In many cases, shareholders withdraw a resolution if they are able to secure a commitment to an agreed course of action from the company through engagement prior to the vote. Withdrawal can be just as successful as filing a resolution in terms of investor stewardship since, due to the non-binding nature of resolutions, there is no guarantee of board action even after a successful vote.  

Case study: Bunge Global SA

Majority-supported sustainability-related resolutions  

While shareholder resolutions are an important stewardship tool, they rarely receive majority support. This is especially true for large, publicly traded companies due to the sheer number of shareholders who can vote. Even when resolutions do receive majority support, in many jurisdictions they are non-binding, meaning that corporations are not legally obligated or compelled to act upon the resolution’s request. Rather, resolution proponents aim to use the filing process to raise the profile of an issue and encourage company action.  

Our research shows that majority support dropped significantly between 2022 and 2023, with a minimal incline in 2024.    

Table 3: Majority-supported sustainability-related shareholder resolutions by year ^{[4], [5], [6]}

Year	Overall	E&S	G
2022	79 (16.8%)	36 (13.7%)	43 (20.8%)
2023	25 (4.7%)	8 (2.4%)	17 (8.8%)
2024	29 (5.4%)	3 (1.0%)	26 (11.2%)

• While the total number of ESG-related shareholder resolutions (table 1) increased between 2022 and 2024, there has been a sharp decline in those receiving majority-support.  
• More ‘G’ resolutions achieved majority support than ‘E&S’ resolutions across the three proxy seasons.   

Implementation of majority-supported resolutions   

Table 4: Implementation status of majority-supported ESG resolutions by year ^[7]

Year resolution was filed	Implemented fully/ in-part	Implementation ongoing	No action or action impeded
2022	79.2%	9.1%	11.7%
2023	52.0%	8.0%	40.0%
2024	3.4%	20.7%	75.9%

Our research indicates that implementation – of either the full resolution or the part that will be implemented – has been completed for a significant proportion (79.2%) of resolutions from the 2022 proxy season compared to just over half (52%) of the resolutions from the 2023 proxy season. There has been some progress with the implementation of resolutions from the 2024 proxy season, but most have not been acted on yet.   

Based on the data, we can conclude that while action is limited immediately after a resolution is passed, this tends to increase over the subsequent period. The lag between the vote and implementation is a result of companies needing time to take action on resolutions and highlights the importance of proponents maintaining ongoing dialogue with a company following a successful vote outcome. Ongoing dialogue helps investors to:   

• keep track of implementation status; 
• monitor board commitment to implementation;  and
• escalate issues in situations where satisfactory progress is not made.  

Our earlier article on board accountability goes into more detail about the value of continuous, iterative dialogue with investee companies. It also highlights that board action is an important sign of good investor relations and corporate governance, reflecting a responsiveness to investor concerns and commitment to addressing material ESG risks and opportunities.   

Why have some resolutions made no progress?  

We found that companies have either not acted upon, or a structural barrier has impeded action for, 40% of the resolutions from the 2023 proxy season.   

In some instances, acting upon a majority-supported resolution may require a company to change their articles of incorporation or company charter. To do this, companies must submit a binding management resolution to a vote.   

Amending these articles often requires a high quorum of votes (typically 66.6% or 80% of shares outstanding) meaning management resolutions filed after a successful shareholder resolution may not pass. In these cases, we categorised the resolution as “action impeded.” This occurred for eight resolutions analysed across 2022 and 2023.  

Case study: Home Depot

Broader developments in the shareholder resolution landscape  

Recent legal developments and corporate resistance in the US shareholder resolution landscape pose potential challenges to shareholder rights and the use of shareholder resolutions by investors.  

SEC Rule 14a-8 governs the process by which shareholders can propose resolutions for a company’s annual general meeting (AGM). Under this rule, companies can use the no-action process to challenge resolutions and seek SEC permission to exclude them from the ballot. Reasons why they may be permitted to do this include where proposals are submitted repeatedly over a number of years. In the ongoing lawsuit National Center for Public Policy Research (NCPPR) v. SEC^[8], the Fifth Circuit is examining whether this process exceeds the SEC’s authority under the Exchange Act or infringes on First Amendment rights.   

In a separate landmark decision, the U.S. Supreme Court overturned the Chevron doctrine, ending 40 years of judicial deference to agency interpretations of ambiguous federal laws. The repeal of the doctrine could further impede the SEC’s ability to pass judgements on matters brought to it by investors and companies.  

Furthermore, 2024 saw the highest number (267)^[9] of no-action requests submitted for three years, representing increasing corporate pushback.   

Finally, in early 2024, instead of approaching the SEC for permission to exclude the resolution, ExxonMobil filed a lawsuit^[10] seeking to bar shareholders Arjuna Capital and Follow This from resubmitting proposals related to setting medium-term greenhouse gas emissions targets. The court dismissed the lawsuit, but only after the defendants filed a letter promising to refrain from filing any other greenhouse gas or climate-related proposals at the company. The lawsuit may signify a shift toward more forceful corporate strategies to challenge shareholder resolutions. Exxon’s success could lead to other companies feeling empowered to use litigation as a mechanism to deal with shareholder resolutions.   

What can investors do?  

Filing and supporting high-quality and impactful shareholder resolutions, including through investment managers and proxy adviser engagement, are important stewardship mechanisms and well within the shareholders’ rights. Filing resolutions that are material to the investee’s bottom line remains an important tool for investors to safeguard the interests of their beneficiaries. It is recommended that investors stay up to date with the fast-changing legal and regulatory environment and resolution trends so that they can exercise this important right effectively.  

Based on our review of sustainability-related majority-supported shareholder resolutions, corporate boards seem to respond to them, however implementation takes time. Hence, ongoing engagement is key to ensure implementation progress and hold boards accountable if required. Investors can consider taking action by voting against management or board members if boards fail to act on a resolution.