Shareholder activists are changing tactics for promoting sustainability

Sustainable shareholder advocates are finding new ways of engaging with companies on climate issues, despite continued attacks on investor rights from the Trump administration. The emphasis is no longer on tallying up the number of corporate meetings or shareholder votes in favour of climate resolutions, a practice called “performative voting” by critics of investor activism on environmental, social and governance issues.

Rather, the new strategy is to ask companies – often in private – to address the financial risks of short-term profit-seeking in oil and gas while long-term forecasts point to the success of cheaper, cleaner energy alternatives. This puts the focus on corporate transition plans, especially in utilities, oil and gas, and banking, three sectors at the front lines of climate risk.

“Those who are filing shareholder resolutions are keen that the company actually takes a holistic approach to decarbonization and starts undertaking activities that are on a pathway to reducing emissions,” says Felix Nagrawala, senior research manager at U.K.–based non-profit ShareAction.

In an April webinar hosted by the non-profit shareholder action group As You Sow, Annie Sanders, director of shareholder advocacy for U.S.-based sustainable fund company Green Century, said that climate-oriented shareholder proposals are increasingly focused on how companies operationalize credible, science-based transition plans. “The goal here is to create a road map, adjust as you go and be transparent about it for greenhouse gas reduction.”

In the last three years, Green Century has negotiated agreements with five semiconductor companies, including Intel and NVIDIA, to disclose key elements of their climate transition strategies. The company has ramped up its work this year, engaging with nine companies on climate and securing two commitments to publish transition plans.

Shareholder campaigns at BP and Shell this spring illustrate this new strategy. Dutch-based shareholder advocate Follow This and 23 investors managing €1.5 trillion filed proposals calling on the London-based fossil fuel giants to publish their plans for managing capital expenditures, oil and gas production, and cashflows under International Energy Agency scenarios of declining fossil fuel demand in the 2030s.

Resistance backfires on BP

BP decided to reject the Follow This resolution from its April 23 annual meeting agenda, saying it didn’t meet legal standards for inclusion. The decision, along with management proposals to scrap existing climate-change reporting requirements and to move from in-person to virtual annual meetings, backfired badly on the company.

Shareholders voted more than 50% against the management proposals in what The Guardian called a climate rebellion by investors. As a result, Follow This was able to preserve valuable climate reporting and in-person meetings and bring considerable attention to BP’s lack of public transition planning.

In marked contrast with BP, investor response to climate issues at the Shell meeting on May 19 was lukewarm as discussion was dominated by the Iran war oil crisis. The climate transition resolution attracted only 13% support, lower than previous years’ proposals from Follow This. Investors “should not be distracted by temporary war profits and lose sight of the medium and long-term,” said Follow This founder Mark van Baal.

In Canada, shareholder attention on climate issues is focused on Canadian banks, which are major lenders and underwriters to the country’s large oil and gas sector. This spring, Royal Bank of Canada, the country’s largest, and third-ranked Scotiabank cancelled their financed emission-reduction targets in a sign of the banking industry’s retreat from climate issues.

In the last two years, the Shareholder Association for Research and Education (SHARE) and a coalition of investors including the large Dutch PFA Pension fund, shifted their attention, filing resolutions and engaging privately to encourage the banks to publish their energy finance ratios (EFRs). The EFR is a metric comparing each bank’s lending and underwriting in low-carbon and high-carbon energy sources.

This year, Scotiabank became the first Canadian bank to release its ratio, and National Bank said it would disclose its ratio starting next year. At 0.65:1 low carbon to fossil fuel financing, Scotiabank’s ratio is a far cry from what’s needed. BloombergNEF estimates that a ratio of 4:1 is needed worldwide to limit global warming to 1.5°C.

SHARE associate director Amanda Carr says disclosure of the EFR can be a useful tool to focus bank management on its role in financing the energy transition. “We know that for many of the banks we are engaging with, this ratio is now reported to the C-suite quarterly,” she said in an email. “It puts the energy transition into dollars and cents, something that all financial institutions work with every day.”

A split between U.S. and European investors

In Europe, support for environmental and social resolutions is still quite strong (about 91% on average in 2025), according to Morningstar. In the United States, average support for ESG resolutions by large investors was 31% on average, down from 42% in 2023.

The number of social and environmental resolutions has also dropped sharply in the United States. According to As You Sow’s recent Proxy Preview report, 184 environmental, social and sustainable-governance-related shareholder resolutions were filed in the United States in 2026, 47% lower than last year.

The drop is due to continued hostility for sustainable investing in the United States created by Republican-led states, members of Congress and right-wing social media celebrities. In 2024, ExxonMobil further intensified the chill on shareholder activism by filing a punishing lawsuit against As You Sow and Arjuna Capital, challenging their right to file ESG proposals.

The Securities and Exchange Commission under the second Trump administration has also made it easier for companies to exclude proposals from their annual meetings. In November, the SEC announced it would no longer rule on the admissibility of shareholder proposals submitted to annual meetings, giving companies the right to reject any proposals except on very narrow grounds.

But this doesn’t mean that shareholders have become powerless. Some shareholders have sued companies for their right to be heard after companies rejected their proposals. Other companies have decided to hear shareholders out in private, rather than assume the reputational risk of the courts and a poisonous social media environment.

The future is murky. Forecasters are saying the protracted Iran war means oil and gas prices will stay higher for longer, creating fossil-fuel-industry demands on government to support expansion of liquefied natural gas projects and oil pipelines, particularly in North America. At the same time, higher prices are also expected to erode global fossil fuel consumption, especially in China and India. This raises long-term risks for investors in fossil fuel companies just as short-term gains appear to be rising.

For Andrew Behar, CEO of As You Sow, the shareholder process will become even more important, although in a behind-the-scenes kind of way to escape growing polarization over fossil fuels and climate.

Shareholder engagement will be conducted “increasingly through private dialogues to avoid the toxicity and unpredictability of the public square,” he told the As You Sow webinar in April. “Trust that’s built on long-term relationships serves both parties to get the work done and not be distracted by trolls seeking to inject politics into good business practices.”

Eugene Ellmen writes on sustainable business and finance. He is a former executive director of the Canadian Social Investment Organization (now the Responsible Investment Association).