The current administration is doing everything in its power to block shareholder accountability measures designed to hold corporations accountable for their policies and practices. Shareholders have lost significant leverage to change company policies and practices from the inside, and an adversarial dynamic between shareholders and the companies they own has developed.
Current SEC Chairman Paul Atkins has opined in recent speeches that shareholder proposals are not allowable under Delaware law. With this reasoning, the Commission has essentially withdrawn from its longstanding role of determining the acceptability of shareholder proposals for proxy ballots. Without government involvement, companies now decide for themselves whether a shareholder proposal warrants a vote.
This poses a major setback for shareholders who have worked to make corporate boards aware of material risks that may threaten share value. It directly contradicts the SEC’s note on its own rule: “Most proposals that are cast as recommendations or requests that the board of directors take specified action are proper under state law” (Rule 14a-8 note to paragraph (i)(1)). It also contradicts Atkins’ stated opinion as SEC Commissioner 23 years ago, when he gave a speech defending the shareholder as the true owner of the corporation who is entitled to air opinions to management.
The Shareholder Rights Group, of which Natural Investments is a member, met with Chairman Atkins regarding the consequences of companies excluding shareholder proposals without the benefit of SEC staff materiality review. We also shared a 2025 study of nearly 10,000 shareholder proposals over 16 years proving that such activism “can positively influence firm value” and can “meaningfully shape long-term firm performance.”
Yet the withdrawal of the SEC from the shareholder resolution ballot process has not silenced shareholder action, as many had anticipated. It has emboldened it. Several companies that refused to place shareholder proposals on the ballot have been sued, including Chubb by As You Sow (via Public Citizen), Axon by Nathan Cummings Foundation, AT&T by New York City Pension Funds, and Pepsi by a leader of People for the Ethical Treatment of Animals. Such lawsuits could cost companies and proponents significant time and money and draw negative public attention. Three of these lawsuits have already been settled in recent weeks: Axon agreed to disclose its political spending for the next 5 years, while AT&T and Pepsi agreed to allow the shareholder proposals on their ballots.
Meanwhile, Republicans in the House of Representatives are pushing forward legislation to limit shareholder proposals. The Stop Woke Investing Act (H.R. 52) would require the SEC to limit shareholder proposals to those with “a material effect on the financial performance of the company” in order to be included on a proxy statement. The bill proposes that companies, rather than the SEC, would be empowered to determine this. Another resolution, H. R. 2988, would restrict private-sector pension plans from considering what conservatives refer to as “non-pecuniary” factors in the management of retirement assets, which they define as anything non-financial (as if companies exist in some sort of vacuum apart from society). This resolution has passed in the House and is currently being considered by the Senate.
For decades, shareholder votes have sent clear messages to boards regarding the material risks they need to address to maintain profitability and increase share value. Republicans erroneously argue that environmental, social, and governance (ESG) risks are immaterial to financial performance, despite hundreds of research studies proving otherwise. Corporate executives have attempted to prohibit the disclosure of such risks and/or minimize them in the name of profitability, though there is no business case to justify that viewpoint. Instead, such prohibitions merely disguise their aims to gut regulation that protects workers, communities, society, and the environment from harms that negatively affect the financial bottom line.
Meanwhile, Executive Order 14366, disguised as a way to curtail foreign intervention in U.S. markets (a non-issue), instructed the SEC to restrict ESG-related policies and policies from being considered by shareholders. Efforts to raise the minimum amount of stock held to file a shareholder resolution are also under consideration by the Commission. We are awaiting SEC action on this order.
Natural Investments Takes Action
We signed an investor letter to Target organized by the Interfaith Center on Corporate Responsibility regarding Board oversight of company risks that directly affect customer behavior, revenue stability, and long-term enterprise value. We requested dialogue on the following:
- The board’s response to reputational and brand-related risks associated with recent public actions;
- The financial and operational impact of customer boycotts, traffic declines, and brand polarization on revenue, margins, and long-term growth;
- A plan to ensure its external positioning does not undermine the company’s stated priorities of restoring traffic, rebuilding trust, and stabilizing earnings.
We signed an investor statement organized by the Interfaith Center for Corporate Responsibility supporting a binding International Labor Organization convention that, once ratified by world governments, would establish a level playing field across 187 countries and business models in the platform economy sector. This primarily addresses the misclassification of digital workers as independent contractors, prohibiting them from the rights and protections afforded to employees, thereby exposing them to precarious conditions, exploitation, and safety risks. The convention would assume employee status, require fair remuneration, protect data rights, secure freedom of association, guarantee equal protection for women and migrant/refugee workers, and establish grievance and legal remediation processes without forced arbitration. This will be considered at the ILO annual conference in June.
We signed an investor letter to Accenture led by Zevin Asset Management requesting engagement regarding its development and deployment of advanced surveillance systems and AI-enabled predictive policing tools that may expose the company to legal consequences related to potential constitutional and human rights abuses. We hope to gain insight with management as to how the Board assures that sales and uses of its products and services are properly disclosed to investors and do not contribute to human rights abuses around the world. The company’s initial response last month was broad and vague, so we are following up to obtain details of its risk mitigation standards.
We signed collective testimony organized by USSIF: The Forum for Sustainable and Responsible Investing to the Illinois legislature regarding its first-in-the-nation Workforce Investment and Sustainable Employment Reporting Act (WISER) currently under consideration by lawmakers. The Act would require large companies doing business in Illinois to disclose the demographics of their employees and executives, compensation and training, rates of hiring, promotion, and turnover, and health, safety, diversity and inclusion policies.
We signed the Investor Statement in Support of Upholding Gender Equitable Workplaces, led by Adasina Social Capital. The statement is part of a campaign by the Gender Equitable Workplaces Investor Coalition to persuade companies to ensure every employee, regardless of gender identity, has fair access to opportunities, resources, and recognition in workplaces that demonstrate care for individual needs and remove barriers for those with marginalized gender identities.