For the first time in six years, not a single environmental proposal has passed during the annual proxy voting season across US public companies. The development marks a significant downturn in investor appetite for climate-related initiatives and signals growing political and strategic caution within the corporate ESG landscape.

Climate Resolutions Lose Ground

A new report from The Conference Board and Esgauge, shared exclusively with the Financial Times, reveals that in 2025, all green proposals failed across companies listed in the Russell 3000 index. This outcome follows a steep decline from a peak in 2022, when 14 environmental resolutions were approved. That number dropped to just two in 2024 and now stands at zero.

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Investor backing has also waned. The average support for environmental resolutions fell to 10 percent in 2025, compared to 18 percent last year. The total number of resolutions filed shrank from 149 to 110.

Shifting Priorities in Shareholder Activism

Ariane Marchis-Mouren, senior researcher at The Conference Board’s ESG Center, said that companies and shareholders are becoming more risk averse. She noted that investors are increasingly focused on what is “most material and most important,” suggesting a tightening of focus in both shareholder proposals and company disclosures.

Support for environmental and social proposals had been growing steadily until 2021, which marked a high point in ESG momentum. However, political backlash and increasing polarization around ESG issues in the US have reversed much of that momentum.

Political Headwinds and Legal Backlash

The backlash is not limited to sentiment. Political and legal pushback has accelerated in recent years, especially under Republican leadership. In 2023, Texas and 10 other Republican-led states sued asset managers like BlackRock and Vanguard over their net-zero commitments. Both firms later exited the Net Zero Asset Managers initiative.

This year, influential proxy advisers Glass Lewis and Institutional Shareholder Services (ISS) also came under pressure. Texas introduced a law restricting their ability to provide ESG-related guidance to shareholders. Both firms have filed lawsuits challenging the legislation, claiming it infringes on their constitutional rights. ISS, which had historically supported many green proposals, backed none this year.

Strategic Retrenchment from Activist Shareholders

Activist shareholders have responded to the changing landscape. Follow This and Arjuna Capital, two organizations at the forefront of shareholder-led climate advocacy, did not submit any proposals in 2025. Their decision followed ExxonMobil’s lawsuit in 2024, which aimed to block their resolution from reaching the company’s annual meeting.

This legal escalation appears to have had a chilling effect on climate-focused activism through shareholder resolutions.

Focus Shifts Toward Dialogue and Collaboration

While formal proposals are losing traction, investors are not abandoning climate advocacy altogether. Instead, the strategy is evolving.

Kirsten Spalding, Vice President at Ceres’ Investor Network, said the emphasis is moving toward behind-the-scenes engagement. "We will see less adversarial work in the proposal process and more collaborative work," she explained.

Jonas Kron, Chief Advocacy Officer at Trillium Asset Management, echoed this sentiment. He noted that although shareholder proposals remain important, they will no longer be the primary method of influencing company behavior. Constructive dialogue is taking center stage.

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A Temporary Pause, Not a Permanent Retreat

Despite the decline in formal support, some ESG investors remain optimistic about the long-term picture.

Nimrit Kang, Chief Investment Officer at Northstar Asset Management, believes the drop in proposal support is a strategic pause rather than a complete retreat. "It’s going to take a couple of years for this pause to play out, as investors from all sides evaluate the best way to engage with companies," she said.

The next phase of shareholder climate engagement may look different from the activist-heavy approach of recent years. But with regulatory scrutiny rising and the long-term risks of climate change looming, investor interest in corporate sustainability is unlikely to vanish.

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