On October 9, 2025, SEC Chairman Atkins delivered a speech in which he inveighed against “shareholder proposals focused on environmental and social issues.” According to Chairman Atkins, “these proposals consume a significant amount of management's time and impose costs on the company” even though “they almost always receive even lower support than shareholder proposals do generally.” Chairman Atkins therefore expressed the view that it would be beneficial to limit these ESG proposals, and he identified a legal mechanism for doing so--i.e., that “a company [is not] actually required to include these [ESG] shareholder proposals in its proxy materials,” because “there is no fundamental right under Delaware law for a company's shareholders to vote on [ESG] proposals,” and those ESG proposals can thus be excluded.
Irrespective of the legal merits (or lack thereof) of Chairman Atkins' perspective on this issue, this overall policy shift is nonetheless significant, and is aligned with the (de-)regulatory agenda of the Trump Administration. In recent months, there has been substantial pushback from the federal government on the adoption or implementation of ESG principles in corporate America, perhaps exemplified best by the SEC's abandonment of its mandatory climate disclosure rule. By discouraging shareholder proposals on ESG issues, the SEC is effectively cutting off another mechanism by which individuals and organizations focused on ESG issues can seek to impact corporate behavior. (It is worth noting, though, that the ESG proposals described by Chairman Atkins were described as “reflect[ing] views from both sides of the political aisle”--so proposals advanced by conservatives seeking to compel adoption of certain viewpoints would also be encompassed, and discouraged, by this policy shift.)
Simply stated, this latest development is yet another move by the SEC to limit the impact of ESG principles in corporate America.
The Securities and Exchange Commission will rethink a federal regulation that requires companies to include ESG-related shareholder proposals in their proxy filings, chairman Paul Atkins said late Thursday. Atkins, speaking at the University of Delaware, said the SEC’s previous position had driven the “politicization of shareholder meetings.” Eight decades after the rule on shareholder proxy access was first promulgated, changing circumstances—including the falling number of publicly traded US corporations—call for a fresh look at “the rule’s fundamental premise,” he said, specifically criticizing investor initiatives tied to environmental, social and governance goals. The agency is now set to reevaluate whether investors should “be able to force companies to solicit for their proposals—to the extent that shareholder proposal is a proper subject under state law—at little or no expense to the shareholder,” he said.
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