ESG Litigation & Enforcement Tracking

2024 Environmental Shareholder Proposal Trends

Early season results have continued the downward trend in average support for environmental proposals observed since 2021. These results largely reinforce the same shareholder proposal trends from last year.

As of June 30, 2024, approximately 190 known environmental proposals were submitted, 130 of them climate-related. Only three environmental proposals received majority support.

Trends in Proposal Topics

 

Conservative Proposals

• Of the 189 known environmental proposals, 15 were conservative proposals. 13 went to vote, with average support of 1.9%.
  • 8 companies sought no-action relief from the SEC. The SEC did not concur with 6 requests and concurred with the remaining on procedural grounds because the proposals did not meet the submission threshold.
• Anti-ESG proposals in general have increased by 19% to 112 proposals so far this season.
  • Social proposals make up the vast majority of anti-ESG proposals at 71% (80 out of 112).
  • 60 have gone to vote, with 33 proposals still pending.
  • None of the proposals have received majority support, with average support of 2.8%.

No-Action Letters

In general, the SEC staff “has nearly doubled the number of exclusions” of shareholder proposals compared with 2023. The major increase in exclusions is largely a result of an increase in the number of no-action requests filed by companies.

As of June 14, 2024, companies submitted 44 requests for no-action relief to the SEC related to environmental proposals. The SEC granted 21 of these requests and rejected 14, while 9 were withdrawn. Numerous climate proposals were excluded as “micromanagement,” meaning the proposals were found to be too granular in their requests and were attempting to micromanage company activities.

Moving Forward

With the sustained level of involvement in the proxy process, it is likely that these trends will continue.

We can also expect that attention will shift to implications resulting from the 2024 election and any challenges to the SEC’s climate rule.

2023 Environmental Shareholder Proposal Trends

2023 Social Shareholder Proposal Trends