Despite a series of regulatory changes in the US at the beginning of the proxy season, the shareholder proposal process showed once again how valuable it is to investors and companies in addressing material business risks and investment opportunities
In the 2026 proxy season, proposals produced more than 50 negotiated agreements and notable votes, demonstrating the value this long-standing system still holds.
But federal regulators want to dismantle it. The SEC is planning to repeal, or significantly water down, Rule 14a-8, which governs shareholder proposals in corporate proxy statements.
Investors and companies stand to lose, and the US economy will be worse off globally if the proposal process cannot withstand this unprecedented threat.
With rulemaking expected later this year, many important voices are now stepping up to defend shareholders’ rights to file and vote on proposals. As they do, I look back on some noteworthy outcomes and the lessons that investors and companies can learn from this past season as they work to protect the process.
- Investors and companies continue to benefit from the existing shareholder proposal process. Investors have the opportunity to formally surface issues with the companies they own without escalating to costly or adversarial tactics, such as litigation or proxy contests.
- Outcomes can be valuable for both parties. Green Century Capital Management, an experienced filer, negotiated commitments this season to address risks raised with about half of the companies where they filed proposals this past year (15 out of 29 companies). Because of Rule 14a-8, Green Century followed a structured, well-worn path of engagement. In turn, companies had concrete ideas of the issues important to their shareholders and could respond accordingly.
- The process provides a way to signal general shareholder concerns. Where proposals are not negotiated for withdrawal, a proxy vote reveals pertinent information about the level of investor support for addressing the concern. For example, when As You Sow asked NVR Inc, one of the largest homebuilders in the US, to disclose its greenhouse gas emissions, around47 percent of shareholders supported the request, a highly significant vote. Proxy advisor Glass Lewis states that good governance calls for boards of directors to engage with shareholders when over 30 percent of shareowners vote against management’s recommendation.
- Proposals allow company management to demonstrate their responsiveness. They can address shareholder wants and needs and improve corporate decision-making by prompting boards to evaluate risks and governance practices more carefully.
Mirror proposals – same topics, opposing views
- In 2026, proposals on ballots included both conventional proposals and proposals that sought to challenge responsible investment practices. While the number of the latter did increase year-on-year, the results show that more proposals do not equal more popularity.
- Take the example of NextEra Energy, the large electric utility and independent power producer. Trillium Asset Management filed a proposal at NextEra seeking disclosure on the company’s alignment with the Paris Agreement, which received a significant 34.6 percent of votes in favor. In contrast, a proposal calling for a report on the risks of net zero business performance only received 1.2 percent of votes in favor. NextEra investors clearly favor a proactive approach to addressing climate risk.
- The annual meeting for Home Depot had a similar outcome: a shareholder proposal regarding evaluation of recycling-related plastics targets, which supported plastic use, received 0.86 percent votes in favor, while a proposal requesting a report on packaging policies, which supported recycling and reusability, received 17.4 percent votes in favor. NextEra and Home Depot are not outliers. According to Morningstar, the average vote in support of anti-environmental proposals was just 1.3 percent.
There is growing pushback against the SEC’s impending rulemaking. More than 32,000 individuals have signed a petition encouraging the agency to retain the shareholder proposal process. In addition, a legal petition to recalibrate the rule rather than repeal it was submitted to the SEC by a coalition of investor organizations and the New York State Comptroller, Thomas DiNapoli. While the SEC is required to respond, there are no rules stipulating when.
Investors and companies can also make their voices heard by writing to the SEC to support these petitions or by submitting their own comment letter when the SEC issues its proposed Rule 14a-8 revisions later this year.
Losing the right to file proposals means losing a major tool investors and companies have to help ensure material risks and opportunities are considered in business decision-making. Shareholders should be able to communicate directly with companies, and corporate boards and executives should have the chance to respond.
That principle is not progressive or conservative – it is foundational to capitalism.
In her role at Ceres, Sarah works with institutional investors who are seeking to improve corporate practices on sustainability and governance issues in order to mitigate financial risk and to maximize the long-term value of assets
