The 2025 proxy season has revealed significant shifts in shareholder activism, marking a notable departure from recent trends in both the volume and nature of proposals submitted to public companies. According to data from Institutional Shareholder Services (ISS) and Morningstar, the landscape of shareholder engagement has undergone substantial changes, reflecting evolving investor priorities and regulatory responses that are reshaping corporate governance conversations. The results of the U.S. and Canada annual general meeting (AGM) season provide several data points to evaluate this evolution.
Overall Proposal Volume Declines Significantly
The most striking development in 2025 was the dramatic 26% decrease in shareholder proposal volume compared to 2024, according to ISS data. This substantial drop represents one of the most significant year-over-year declines in recent years and signals a potential recalibration of shareholder activism strategies. The reduction is most likely a reflection of the guidance provided by the U.S. Securities and Exchange Commission (SEC) just prior to the bulk of the AGMs taking place, which allowed more companies to exclude proposals that had already been filed.
This decline in volume has been accompanied by a shift in the composition of proposals, with governance-focused initiatives outnumbering environmental and social (E&S) proposals for the first time since 2021. This reversal marks a significant departure from the trend of recent years, where E&S concerns dominated shareholder agendas, and suggests a return to more traditional corporate governance priorities – at least in the short term.
Environmental and Social Proposals Face Headwinds
Climate-related proposals, which represented 17% of all shareholder proposals in 2025, experienced a sharp decline in investor support, with average backing dropping from 25% in 2024 to just 10% this year. This dramatic decrease in support levels indicates a notable shift in institutional investor sentiment toward climate-focused initiatives, indicating that investors are being more cautious about which proposals they will support.
The artificial intelligence (AI) theme, despite doubling in proposal volume from the previous year, faced similar challenges in garnering shareholder support. Average backing for AI-related proposals fell from 17% to 10%, suggesting that, while investors recognize the importance of AI governance issues, they may be hesitant to support specific proposals that could impact companies' competitive positioning in this rapidly evolving field.
Diversity, equity, and inclusion (DE&I) proposals faced particularly steep headwinds, experiencing declines in both volume and support levels, with average backing falling from 24% to 14%. However, within this broader trend of declining support, certain DE&I topics bucked the trend. Proposals calling for disclosure of EEO-1 reports and racial equity audits actually saw increased levels of support, indicating that while investors may be growing skeptical of broad DE&I initiatives, they continue to value transparency and accountability in specific areas of corporate diversity practices.
The steady decline in support for E&S proposals since 2022 continued into 2025, reinforcing the trend away from these issues. However, certain topics continued to resonate with investors. Political spending transparency proposals received the highest level of support among E&S initiatives, with five such proposals receiving majority support.
An issue that bucked the trend of declining support in the U.S. was asking banks to disclose the extent to which they are supporting fossil fuels compared to lending to alternative energy sources. This is in the form of requesting banks to disclose their energy supply ratio and these proposals did particularly well at three Canadian banks (TD, CIBC and BMO), achieving support levels approaching 40% (38%, 37% and 32%, respectively). These results suggest that investors are increasingly focused on financial institutions' exposure to energy sector risks and their strategies for managing transition-related challenges. It also suggests that Canadian companies are experiencing higher levels of support despite what is happening south of the border.
Anti-ESG Sentiment Fails to Gather Steam
A notable development in 2025 was the jump in anti-ESG proposals, though support for these initiatives remained below 5%. This emergence of counterproposals reflects the broader political and cultural debate surrounding ESG, with some special interest groups pushing back against what they perceive as politically motivated corporate policies that may not serve shareholder interests. With such low levels of support, however, we are not likely to see these proposals gaining widespread support.
Governance Proposals Maintain Strong Support
In contrast to the declining support for E&S proposals, governance-focused initiatives continued to receive robust backing, with support levels remaining strong above 30%. This sustained support for governance proposals reflects investors' continued emphasis on fundamental corporate oversight mechanisms, Board accountability, and shareholder rights.
SEC Regulatory Impact and Proposal Withdrawals
The SEC granted no-action relief to more companies in 2025, with the majority of E&S proposals being excluded on grounds of ordinary business operations or micromanagement. This increased regulatory scrutiny has created additional hurdles for proponents and may partially explain the overall decline in proposal volume.
Biodiversity and deforestation topics saw the highest number of withdrawn proposals, indicating either successful engagement between companies and proponents or recognition that these initiatives were unlikely to meet the threshold for inclusion in proxy statements.
Canadian Corporate Governance Trends
The Canadian market showed distinct patterns in 2025, with average support levels for director nominees holding steady at 96%, demonstrating continued confidence in corporate Board leadership. However, sector-specific variations were notable, with nominees receiving less than 90% support concentrated in healthcare, consumer discretionary, and energy sectors.
Say-on-pay votes in Canada maintained strong support levels above 90%, continuing a trend that has persisted since 2018. Healthcare and information technology were the only two sectors that dipped below the 90% support threshold, suggesting investor concerns about executive compensation practices in these rapidly evolving industries. Notably, three Canadian companies failed their management say-on-pay (MSOP) votes in 2025, representing a small group of companies where shareholders expressed dissatisfaction with executive compensation arrangements.
Looking Forward: Implications for Corporate Strategy
The 2025 proxy season results suggest that shareholder activism is entering a new phase, characterized by more selective engagement and a return to traditional governance priorities. Companies should anticipate continuing strong support for governance-focused proposals while preparing for more nuanced investor expectations around environmental and social risk management. The key to navigating this evolving landscape will be demonstrating clear connections between corporate policies and long-term value creation, regardless of the specific issue area. As always, staying connected to your shareholders is the best mitigant against unexpected moves prior to the 2026 voting season.
Jennifer Coulson is Vice President, ESG, Public Markets, at BCI.