Climate and AI impact were top shareholder engagement priorities in 2025

Impact investors are fond of the saying that “every investment has an impact.” One of the key reasons that public equity markets are a viable domain for impact investing is the practice of shareholder engagement. Even those with tiny stakes in a company are empowered to raise financially material sustainability concerns with corporate management or file a resolution for consideration on a company’s annual proxy statement.

Opportunity abounds despite political challenges

Over the past two-to-three years, shareholder engagement efforts focused on social and environmental challenges have been under sustained pressure from federal regulators, state policymakers, corporations and some “anti-ESG” investors. In early 2025, the Securities and Exchange Commission (SEC) issued guidance that makes it easier for companies to exclude shareholder proposals that they deem unrelated to their business. As a result of this and other efforts, the number of sustainability-focused resolutions appearing on company proxy statements declined.

Though support levels for these resolutions remained steady from 2024 to 2025 at an average of 19.6%, that was still well below the 30%-or-more support levels achieved in the pre-pandemic era.¹ The number of “anti-ESG” proposals filed has also grown in recent years, accounting for 14.7% of all resolutions as of March 2025.²

The number of “anti-ESG” resolutions may have increased in recent years, but support has not. For example, more than 98% of Costco shareholders voted against a resolution that would require the company to evaluate risks posed by its diversity, equity and inclusion practices.³

Exhibit 1: Average support for sustainability-related and “anti-ESG” proposals⁴

As of July 25, 2025. Source: Morningstar

Recurrent themes including climate change, corporate political influence and human rights were at the core of shareholder proposals in 2025 and we expect them to dominate engagement activities in the 2026 season as well. The majority of climate change proposals focused on companies’ preparations for climate-related impacts. With 2024 marking the first full year that global average temperatures reached 1.5°C above pre-industrial levels, climate risks have come into sharper focus for many investors. This has driven an increase in proposals calling on companies to demonstrate how they are preparing for climate impacts through both mitigation and adaptation. At the same time, some research shows that climate change is making severe natural disasters more likely, further testing the resilience of businesses and local communities.

There has also been an increase in proposals related to AI and company transparency regarding its use. While AI has seemingly proliferated to every corner of our lives, there are significant concerns regarding the risks it poses due to biased input data and cybersecurity breaches. According to a recent report published by IBM, one-in-five organizations has experienced a cyberattack given a lack of proper AI controls.⁵ However, votes for these proposals continue to be low across the board.

Key 2025 engagements for Fiduciary Trust International clients

For the past several years, we have helped facilitate our clients’ participation in shareholder engagement efforts focused on the companies in their portfolios. Despite the challenges that shareholders faced in 2025, FTI clients were among many who stood firm in their free-market principles and delivered hard-fought victories in 2025.

Our clients chose to participate in several separate shareholder engagement opportunities. While the issues differed, all proposals centered on one aspect: financial materiality. The following case studies highlight positive outcomes that can result from an active shareholder engagement approach.

Co-Filing & Letter of Support to Home Depot: Biodiversity Impact Assessment

Home Depot is directly exposed to risk from its contributions to biodiversity and nature loss. The firm’s global sourcing may contribute to deforestation and has long been linked to illegally logged timber. The retailer’s other product categories can also have a negative impact on nature. For example, the sale of invasive species, pesticides containing glyphosate and products with PFAS can harm human health and contribute to biodiversity loss. The range of companies targeted for PFAS liabilities has expanded to not only include manufacturers, but also those that use the chemical in their finished products.

Both the co-filing and the letter of support requested that Home Depot conduct a biodiversity impact and dependency assessment on the full value chain and use of products. This would inform the firm’s strategy to manage nature-related impacts, risks and opportunities.

Results

• 17.0% of shareholders voted in favor of the proposal. While this is below the level that typically gets management’s attention, the proposal was one of the few that saw increased support. This is a testament to the materiality of biodiversity, especially for a firm that relies on wood products.

Co-Filing & Letter of Support to Texas Instruments: Technology in Russian Weapon Systems

Since Russia’s invasion of Ukraine, reports have consistently identified U.S.-manufactured semiconductors in critical Russian military supplies. According to the Royal United Services Institute (RUSI), Texas Instruments manufactured 25% of the dual-use items in 27 Russian weapon systems, including Kalibr cruise missiles and Iranian Shahed drones.⁶ These systems have been implicated in possible Russian war crimes against Ukrainian civilians. 

While the firm claimed to have stopped selling products to Russia as of February 2022, it is estimated that at least $142 million worth of Texas Instruments’ critical components were imported into Russia during 2023 alone.⁷ The U.S. Senate’s Permanent Subcommittee on Investigations (PSI) determined that there was a substantial increase in exports of components to countries well-known to have entities engaged in transshipment.⁸ The diversion and misuse of these components exposes the company to potential links with sanctioned parties, violations of European mandatory due diligence legislation and reputational damage through continued media coverage of the war.

Both the co-filing and letter of support requested that Texas Instruments commission an independent third-party report on the firm’s due diligence process to determine whether its customers’ use of products contribute to violations of international humanitarian law. 

Results

• Along with several other co-filers, the client finalized a negotiated withdrawal of the resolution following meetings with Texas Instruments’ executive management. The firm agreed to publish a global human rights policy this year and provide detailed disclosures regarding its efforts to combat illicit chip diversion to the Russian military. Texas Instrument is also committed to having 2-to-3 additional discussions with investors on this particular issue.

Letter of Support to Alphabet: Human Rights Impact of AI Advertising

Alphabet’s advertising business, which relies heavily on AI, accounted for more than 75% of its revenue in 2023.⁹ Algorithmic systems are deployed to deliver targeted advertisements, determining what users see, and may result in systemic discrimination and human rights violations. 

As of now, shareholders lack clarity on what human rights due diligence efforts are made to address risks stemming from new products. Inadequate human rights due diligence measures may expose Alphabet to regulatory risk. For example, the Digital Services Act requires companies to take measures to integrate human rights considerations into their handling of user data and algorithmic decision-making. 

The letter of support asked Alphabet to publish an independent third-party Human Rights Impact Assessment (HRIA) to examine the actual and potential consequences of AI-driven advertising.

Results

• 14.3% of shareholders voted in favor of the proposal.

Letter of Support to NextEra Energy: Detailed Board Matrix

FTI clients signed the same letter of support last season given the belief that a diverse board is an indicator of a well-functioning company. Diverse perspectives should drive better decision making and help avoid groupthink. 

The letter of support asked NextEra to disclose each director’s self-identified gender and race/ethnicity, as well as the defined skills and attributes that are most relevant considering the firm’s long-term strategy, particularly with respect to climate change.

Results

• The New York City Comptroller, who was the lead filer for this engagement, reached an agreement with NextEra to publicly disclose a board matrix with each director’s relevant skills, experience, attributes, as well as their gender and race/ethnicity. While past efforts, including a 40.6% shareholder vote for the same proposal last year, did not lead to action, NextEra has now committed to transparency.

We look forward to our clients’ continued success in 2025 as we begin preparations for the 2026 season.