If AGMs were a music festival, this year saw anti-environmental, social, governance (ESG) acts take centre stage, while the ESG support act played a side gig. But despite the noise, investors are not buying into the growing anti-ESG push.
Instead, they are prioritising financially material issues and starting to ask questions about artificial intelligence (AI) governance in their portfolio companies.
Data from the 2025 US proxy season shows that despite a 12% rise in anti-ESG proposals from last year, shareholder support remains minimal, averaging just 2%. The increase reflects the growing activism among groups targeting environmental and social priorities. Interestingly, the data also showed that both anti-ESG and pro-ESG groups unite over AI concerns.
Figure 1. Anti-ESG proposals have been rising
Source: International Shareholder Services, as at 1 May 2025.
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Anti-ESG motions struggle to gain traction
At farm machinery maker John Deere’s annual meeting, for example, an anti-diversity proposal garnered only 1.9% support, while a pro-diversity resolution received 29%. This pattern underscores a broader trend: investors are rejecting politically motivated filings and focusing on ESG priorities they view as financially relevant.
Pro-ESG submissions, even though they still dominated, have dropped significantly this year, driven by, no doubt, the Trump administration’s anti-diversity rhetoric and by regulatory shifts that made it easier for companies to exclude ESG resolutions from ballots. In February 2025, the Republican-led Securities and Exchange Commission (SEC) tightened financial materiality standards, allowing boards to reject filings without a supporting board analysis, leading to a surge in ‘no action’ relief grants by the SEC.
Along with lower volumes, votes in favour of pro-ESG resolutions have also seen a steady decline (Figure 2). Although support for governance-related proposals increased, backing for environmental and social petitions fell for the third year in a row. In our view, this doesn’t necessarily mean investors are turning anti-ESG. It’s more a case of the sheer number of proposals historically submitted at company AGMs leading to questions around the capacity of corporate boards to meaningfully address all ESG issues escalated through voting. We believe it remains in shareholders’ best interests to support those pro-ESG proposals that address matters needing immediate corporate attention, which in turn enables boards to devote resources to the most financially material concerns.
Besides, despite the decline, pro-ESG proposals continue to attract far greater levels of support than their anti-ESG counterparts.
Figure 2. Anti-ESG support remains minimal
Source: Georgeson, as at 16 May 2025.
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Investor questions about AI
As most of the current stock market rally is powered by AI stocks and more companies incorporate it into their operations, AI also turned up on proxy ballots this year as both pro- and anti-ESG groups raise questions about its risks and oversight.
Shareholders have flagged concerns about data privacy violations and improper data sourcing, including copyright infringement in AI model training. The consequences can be financially material, a case in point being Apple settling a US$95-million lawsuit earlier this year over privacy breaches tied to its Siri voice assistant.
Others are also highlighting AI’s growing energy demands. According to the International Energy Agency, electricity consumption in AI-driven data centres is projected to quadruple by 2030, raising questions about environmental impact and operational costs.
Figure 3. Shareholder support levels for anti-ESG and anti-AI proposals
Source: Glass Lewis, as at 24 June 2025.
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This makes AI oversight a test of corporate governance. As new regulations come into force, companies deploying AI face growing exposure to fines, legal challenges, and reputational risks.
Global implications
Outside the US, shareholder activism remains less polarised. Anti-ESG proposals are uncommon in Europe and Asia, where sustainability and governance practices continue to dominate the agenda. Yet AI’s emergence signals a universal concern.
The AI Act, which will come into effect next year, will impose strict requirements on companies operating in Europe. These include mandatory risk assessments, transparency in AI model training, and safeguards against unethical use of personal data. For global businesses, failure to comply with these regulations could result in significant reputational and financial damage.
Parting thoughts
While headline sentiment has shifted from pro-to anti-ESG, investor actions tell a different story. They are rejecting politically motivated rhetoric and continuing to focus on material governance issues.
Proper oversight of artificial intelligence is emerging as a shared concern for both pro- and anti-ESG groups. Questions around data privacy, energy consumption, and ethical use are uniting investors across ideological divides.
Proxy Fest 2025 has shown that investors will go to the stages that matter, not the ones with the noisiest act.
Authors: Elena Bignami, Head of Stewardship at Man Group, and Rob Furdak, Chief Investment Officer for Responsible Investment (RI) at Man Group.
All data sourced from Bloomberg unless otherwise stated.
Note to our readers: We hope you are having a good summer. Our regular Views from the Floor column will take a holiday throughout August. The column will return on Tuesday, 2 September 2025.
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