The future of investor influence: A new era of shareholder engagement

 As investors prepare for shareholder engagement season to ramp up between now and the spring, the tools available to them are changing. Policy overhauls at the Securities and Exchange Commission (SEC) have introduced additional obstacles to participation. Yet our work over the last year alongside our clients shows there is more than one way to raise concerns and pursue progress.

While shareholder engagement remains the primary tool for seeking impact in public equity portfolios, navigating the upcoming season will require a new playbook. We expect collaborative, direct dialogue with executives to take precedence over filing resolutions. This presents an opportunity for clients to develop multi-year engagement plans focused on sustainability issues that can affect a company’s financial performance.

A new era of engagement: Navigating the SEC's policy changes

Over the past year, the SEC has taken or proposed three measures affecting shareholder resolutions:

1. Stopped reviewing no-action requests from companies seeking to block shareholder proposals, effectively handing corporate boards the autonomy to ignore them.
2. Proposed rescinding Rule 14a-8, an 84-year-old regulation governing inclusion of shareholder resolutions in annual proxy materials. Recission would shift authority to state laws and companies’ governing documents.
3. Tightened Schedule 13D vs. 13G beneficial ownership rules, narrowing the legal boundary between permissible dialogue and active pressure. This limits the actions of investor coalitions such as Climate Action 100+.

The number of sustainability-focused resolutions appearing on company proxy statements declined 47% in 2025-2026.¹ While regulatory uncertainty had a chilling effect, more companies reached agreements through direct dialogue. Large institutional investors grew cautious of public activism that might appear to influence control, favoring private negotiations. Average support for sustainability-related shareholder proposals that reached the ballot was 15.2%, well below the 30.0%-or-more seen in the post-pandemic era.²

Resolutions targeting corporate political influence and climate change accounted for more than half of sustainability-related proposals. The latter topic was dominated by greenhouse gas emissions (GHG) reporting and plastic packaging proposals, both of which averaged 18.0% support. Most human rights-focused resolutions requested disclosure of AI’s data privacy and misinformation implications. We expect these issues to remain a focus as the technology becomes more prevalent in our lives.

Our clients’ engagements in 2025-2026

Despite the regulatory headwinds, our clients participated in 10 engagements in 2025-2026, doubling last year’s participation rate. The issues differed, but each engagement centered on financial materiality: how a company’s practices may affect its risks and long-term performance. The following case studies illustrate the range of potential outcomes that can result from an active shareholder engagement approach.

Meta: Client lead filing and letter of support on child safety and executive pay 

Meta’s website states that “child protection is always a top priority.” Yet the company has failed to link child safety goals to executive pay, despite past proposals receiving up to 60.0% of the independent vote. Regulatory action on child safety at the state, federal and international levels creates exposure to significant fines.

The lead filer and letter of support requested a report assessing the feasibility of integrating child safety performance into senior executive compensation. These actions continued a long-standing engagement, with the first child safety resolution filed in 2020.

Results

• The proposal received 3.4% support, representing approximately $107 billion in market value based on the annual general meeting date. It received roughly 11.1% of the independent vote, excluding CEO Mark Zuckerberg’s dual-class shares. Support fell below the 5% threshold needed to refile a first-year resolution the following year.
• The financial stakes extend beyond the vote. Meta recently announced it would pay $18 billion to settle U.S. lawsuits over children’s social media addiction. The settlement represents nearly 10% of the firm’s annual revenue and follows $2.4 billion in legal-proceeding charges in Q2 2026.

Home Depot: Client co-filing on plastic packaging

The growing plastic pollution crisis may pose increased operational risks to retailers such as Home Depot. The company is working with suppliers to reduce virgin plastic use by 200 million pounds by 2028 but has not disclosed its total plastic footprint, leaving investors unable to assess the full impact of that commitment. Competitors including Walmart, Target and Lowe’s have broader, more transparent sustainable packaging commitments.

The co-filer requested a report on how Home Depot could match its peers by making all packaging curbside recyclable, reusable or compostable.

Results

• The proposal received 16.5% support, above the sustainability-focused average. Home Depot initially planned to omit it following the SEC’s no-action change, then reversed course in mid-March 2026 amid lawsuits by the NYC Comptroller, As You Sow and the Nathan Cummings Foundation.

PepsiCo: Client letter of support on regenerative agriculture

Industrial agriculture applies more than one billion pounds of synthetic pesticides annually to farms, which may threaten the long-term resilience and yield stability of agricultural supply chains. The proposal’s proponents also cite long-term health risks to farm workers and neighboring communities. Regenerative agriculture aims to reduce the mass use of synthetic pesticides through reduced tillage, crop rotation and natural pest management. Pepsico supports these practices, but does not disclose whether or how it tracks suppliers’ pesticide reduction, raising questions about progress and potential greenwashing.

The letter of support requested a report explaining whether and how PepsiCo could incorporate pesticide-use data into its regenerative agriculture disclosures.

Results

• The resolution was withdrawn after PepsiCo agreed to publicly describe its formal process for identifying and reducing impacts on biodiversity and nature. This win followed direct dialogue between co-filers and company executives in early 2026.

What comes next

Shareholder resolutions remain an important way for investors to raise financially material issues that align with their values and impact companies’ bottom lines. We encourage clients to forge ahead with their engagement plans for 2026-2027, and we will continue to facilitate on their behalf, supported by a third-party consultant to help identify appropriate opportunities.

Shareholder engagement is completely voluntary and offers multiple options, each requiring a different commitment of time and effort, from letters of support to inclusion on a company’s annual proxy statement. We support clients throughout the process to minimize the administrative burden.

We also plan to help develop multi-year engagement plans with clients that center on direct dialogue. These types of engagements can function as ongoing business relationships rather than seasonal or one-off exchanges, helping investors navigate regulatory shifts without relying solely on proxy votes.

Lastly, we plan to finalize a comment letter supporting Rule 14a-8 and the integrity of the shareholder engagement process in the weeks leading up to the SEC’s public comment deadline on November 20, 2026.