COLUMN-Shareholder activists dial back on resolutions

By Ross Kerber

April 3 (Reuters) - Sustainability-minded shareholder activists filed fewer resolutions for corporate annual meetings this year, but battles still loom on topics like corporate diversity efforts.

Investors pressing companies on environmental, social and governance (ESG) matters filed a total of 355 shareholder proposals as of Feb 21, down from 536 of them filed at the same point in 2024 and 542 filed at the same point in 2023, according to a new report from shareholder activist group As You Sow.

Activists I spoke with cited a number of reasons for the decline including a sense that big investors would not support their measures, and concerns that Republican regulators might not let their resolutions go to a vote in the first place.

Another factor: companies are wary of public battles and have seemed willing to make changes to avoid unwanted attention, said Andrew Behar, As You Sow's CEO.

"Companies were more willing to have things not escalate," he said in an interview, confirming his sense of things from February.

Behar said his group also decided not to file some resolutions seeking more specific DEI data from companies, lest the measures expose the firms to possible retaliation by U.S. President Donald Trump's administration. He has targeted corporate DEI policies.

"We own the companies, we don't want them to fail," Behar said. "If we're engaging a co and they have a good business reason to say that right now they can't give us what we're asking for, then we're not going to ask for it," he said.

It's not like the pro-ESG activists are giving up, however. As You Sow's report flagged a number of resolutions filed at companies that had dialed back their diversity, equity and inclusion efforts last year.

At Ford, F.N for instance, Mercy Investment Services called on the board to report on the research and analysis it did before changing its DEI policies last summer.

Maxwell Homans, Mercy shareholder advocacy associate, said via e-mail that "As investors, we wanted clarity on these changes and on the decision process, such as research into the business case for these changes and whether employees and stakeholders were consulted before implementing them. We believe stakeholders, including their consumers/the public, also have the right to know."

Ford in its proxy recommended votes against the proposal, saying it had made only common sense changes such as revamping its employee resource groups.

"Ford remains committed to operating in ways that best serve our diverse customers and the diverse communities where we live and work," the automaker said in its proxy.

"Given that our values and core practices remain unwavering, and that we believe our existing disclosures are responsive to our investors’ core areas of interest, the Board of Directors does not believe that preparing the requested report on the Company’s DEI strategy beyond what the Company already reports is an effective use of Company resources at this time," Ford said.