Eliminating Environmental and Social: SEC’s Atkins Suggests States Could Prevent Proposals
20 October 2025
The US Securities and Exchange Commission’s (SEC) Chair Paul Atkins has suggested that the “intersection” between its Rule 14a-8 and state corporate law could be exploited to exclude environmental and social shareholder proposals.
In a recent keynote address at the John L. Weinberg Center for Corporate Governance’s 25th anniversary gala, Atkins branded shareholder proposals focused on environmental and social issues as having “epitomised the politicisation of shareholder meetings.”
“These proposals, which reflect views from both sides of the political aisle, generally call for actions that are not binding on the company and frequently involve issues not material to the company’s business,” he said. “When voted on at meetings, they almost always receive even lower support than shareholder proposals do generally. Nonetheless, these proposals consume a significant amount of management’s time and impose costs on the company.”
Atkins questioned whether companies are “actually required to include these precatory shareholder proposals in its proxy materials?”, adding that the answer to this question “lies at the intersection of the Commission’s Rule 14a-8 and state corporate law”.
He suggested that should the state in which a company is domiciled have its own shareholder proposal regulations, the firm could argue in a no-action request that the proposal is excludable under that state’s law. A well-known critic of shareholder rights, Atkins has previously personally voiced concerns about the “tyranny of the minority” in reference to shareholder proposals under Rule 14a-8 of the Securities and Exchange Act of 1934. He has also been expected to lean in favour of state regulations regarding shareholder proposals.
Before Atkins was formally appointed as SEC Chair, the commission rescinded Staff Legal Bulletin (SLB) 14L under Rule 14a-8, replacing it with new guidance in SLB 14M, as covered in Minerva Analytics’ Shareholder Proposal Voting Trends Report 2025 released last month. The new guidance reinstated prior staff guidance on micromanagement, permitting shareholder proposals to be excluded more easily by companies. This change saw a surge in ‘no action’ appeals, preventing proposals being voted on by shareholders at the AGMs of investee companies, which was also noted in Minerva Analytics’ recently released 2025 Proxy Season Review.
Since Atkins took over as Chair of the SEC, Rule 14a-8 has been amended, introducing more stringent requirements over the amount of investment required to file and the support needed to resubmit proposals, as reported by Minerva Analytics. As a result of the changes, shareholders must have invested a minimum of U$25,000 in a company for a year to file a proposal at an AGM, while proposals must receive at least 5% of votes from investors to be refiled.
Rule 14a-8 provides a framework allowing a public company shareholder to request that a proposal be included in the company’s proxy statement, to be voted upon at a company’s shareholder meeting. The SEC is working on further amendments to Rule 14a-8 at the request of Atkins, with the commission expected to propose a rule that will amend and “modernise” Rule 14a-8 in Spring 2026, according to the administration of US President Donald Trump’s unified regulatory agenda.
Rule 14a-8 has also been in the crosshairs of Republican policymakers in the US this year, with the latest case being a hearing by the Republican-run House Committee on Financial Services entitled “Proxy Power and Proposal Abuse: Reforming Rule 14a-8 to Protect Shareholder Value”. As reported by Minerva Analytics, the hearing scrutinised Rule 14a-8, purporting to assess whether the shareholder proposal process has been “co-opted by activist investors who prioritise narrow policy goals over maximising shareholder value” rather than providing all shareholders with voice in company oversight as “originally designed to”. It additionally showcased a pipeline of proposed regulation seeking to significantly restrict both proxy advisors and shareholder rights.
Investor association the Shareholder Rights Group the House Committee on Financial Services proxy advisor-focused hearing which took place last month and its potential impact on shareholder rights, as reported by Minerva Analytics.
US states have increasingly diverged in their stances towards ESG-related regulation but are yet to formally introduce different policies on environmental and social shareholder proposals. Republican states, Texas in particular, have become increasingly hostile towards sustainability-focused ESG, a trend accelerated by Trump winning a second term as US President.
Between 2021 and January 2025, 44 items of anti-ESG legislation had passed into law in 21 states according to a report earlier this year, as reported by Minerva Analytics. Many of these states signed the letter sent to asset managers this week. The report highlighted that a total of 413 anti-ESG legislative proposals were introduced in 40 states during this same period. The number of anti-ESG laws has since risen to 56 laws in 22 states, with Missouri joining the list this year, according to an anti-ESG state legislation tracker.
Minerva Analytics’ 2025 Proxy Season Review found that across the three indices covered in the report – Solactive GBS Developed Markets Europe Large & Mid Cap Index PR (Europe), the Solactive United Kingdom 250 and 100 indices (UK) and the Solactive US Large Cap (PR) Index (US) – there were 553 proposals from shareholders, a 7.8% decline from the 600 last year.
The US was entirely responsible for this overall drop, with a 28% fall in shareholder proposals. Social shareholder proposals decreased the most dramatically, followed by environmental resolutions. Support for environmental and social proposals in the US also fell, with the only successful resolutions in both the 2024 and 2025 proxy seasons concerning governance matters.
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Last Updated: 20 October 2025