SEC Changes Threaten US Investors’ Lobbying Push
Commission’s decision to exclude first corporate lobbying shareholder resolution in more than a decade has raised concerns for investors.
A second Donald Trump presidency and his pick to lead the US Securities and Exchange Commission (SEC) poses risks to shareholder rights and investor attempts to scrutinise corporate lobbying.
Industry experts expect Trump’s re-election and the appointment of nominee Paul Atkins to embolden companies seeking to push back against shareholder resolutions, including those on corporate lobbying.
“In Trump’s first term, we saw the SEC attempt to rollback shareholder rights by amending the rules that govern when a company must include a proposal in its proxy statement,” said Cleo Rank, Program Manager – Sustainable Finance Policy Engagement at InfluenceMap, told ESG Investor. “This was an attempt to make it easier for a company to exclude proposals and to raise the threshold for shareholders to be able to submit them.”
Under the Biden administration, the SEC reversed course, attempting to expand shareholder rights, despite opposition from the groups that supported the earlier restriction. “It is likely that Trump’s second term will see similar efforts to limit the ability of shareholders to bring resolutions at companies, including policy engagement resolutions,” said Rank.
If approved, Atkins – a well-noted shareholder rights critic – is expected to raise the bar for SEC approval of shareholder resolutions by rescinding Staff Legal Bulletin 14L and issuing a new, more restrictive interpretive bulletin later this year.
“Investors are concerned about actions by the new SEC,” said Timothy Smith, Senior Policy Advisor at the Interfaith Center on Corporate Responsibility (ICCR). “While not all companies support shareholder resolutions, it is a civil and reasonable approach for channelling petitions from investors to companies. Getting rid of the shareholder resolution process would mean companies find themselves in a much more difficult and confrontational context with investors.”
InfluenceMap’s preview of corporate climate advocacy in 2025 found that corporate policy influence, including lobbying activities, was likely to shift from defensive legal challenges to offensive requests for repeal. This trend could also lead to a more offensive response to shareholder resolutions, with Rank noting there have been “increasing attempts by companies to kneecap the process of shareholder democracy”.
She added that the overarching goal of these efforts is to limit shareholder scrutiny companies and if successful would “substantially erode the ability of investors to exercise oversight over companies and tilt the balance of power away from shareholders”.
While Smith said a new SEC administration does not “automatically mean resolutions are more in jeopardy”, it means that companies are more likely to challenge shareholder resolutions.
Switching lobbying lanes
Over the past decade, investors have increasingly sought greater transparency on corporate lobbying, including on climate policies, using shareholder resolutions. Investors have filed almost 600 resolutions asking companies to provide more information about how they oversee lobbying activities directed at federal, state and local government level and how much they spend between 2010 and 2023.
Last year’s Proxy Preview, a compendium of filed resolutions from advocacy groups including As You Sow, found that corporate lobbying and political influence was a high priority for investors during the 2024 proxy season, with 89 resolutions identified at US-based publicly traded companies.
In Q4 2024, industrial gases company Air Products and Chemicals received approval from the SEC to exclude a shareholder proposal on lobbying from its 2025 proxy statement, arguing the proposal sought to micromanage its business operations.
“We were quite surprised this ‘no action‘ appeal to the SEC succeeded since corporate lobbying resolutions have been on company proxies for more than a dozen years and were never challenged successfully,” said Smith. “This could set a new SEC precedent. Once a new SEC position becomes public, law firms and corporate secretaries are well aware and move to challenge too.”
Ahead of the 2025 proxy season, more than a dozen companies have submitted similar no action requests to the SEC to which investors’ attorneys are responding. To date, the SEC has not issued responses to these appeals.
Smith also described the successful argument of micromanagement as “perplexing”, given the resolution had not requested an “exceptional number of details” or deviated from corporate lobbying resolutions which have been on proxies for more than a decade.
Investor interest in lobbying transparency has led to the development of an assessment framework by global sustainability advisor Chronos Sustainability in partnership with Swedish pension fund AP7, BNP Paribas Asset Management, and the Church of England Pensions Board.
“Companies have had to, in some cases begrudgingly, accept these sorts of proposals, and I expect they will feel more confident in pushing back under a Trump administration,” said Rory Sullivan, CEO at Chronos. “That is likely not a good thing, as it will probably swing too far the other way, but it may force investors to be clearer about their role in the governance of companies.”
Sullivan said that the change in the US political environment could also make large institutions less willing to file or support resolutions.
In the 2024, several of the largest asset managers pulled back their support for environmental and social resolutions, which saw the total number of resolutions fall to 37 from 103 in 2022, and average support slip to 30%.
Many investors have been unhappy with the actions of the largest asset managers, including asset owner members of ICCR who wrote to BlackRock, State Street, T. Rowe Price and Vanguard last year questioning their “marked drop” in support for ESG-linked shareholder proposals.
“In 2024, Blackrock voted against almost all resolutions on environmental and social issues,” said Smith. “That’s a real violation of fiduciary duty, because many of the issues raised in resolutions have material impact on companies and shareholder value.”
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