Power, protests and the future of investor influence

Over the past decade, ESG related themes have become regular features on Annual General Meeting (AGM) agendas, sparking both activism and protest. In the last couple of years, however, the ESG label has met with growing resistance as political tides shifted and geopolitical tensions intensified.

While sustainability risks still underpin most resolutions, investors have become more selective and less eager to defend their arguments with ESG terms. Bold, broad proposals with ideological overtones are being replaced by pragmatism, focus, and an investment-focused narrative. Yet the core issues remain unchanged and grounded in sustainability foundations – from climate change and governance to executive pay and technological disruption. These are all enduring ESG risks that, whether explicitly or implicitly acknowledged, continue to shape long term value creation.

Though the amplitude has dampened, ESG fatigue persists among companies and investors, especially around climate. Support for climate target resolutions has plateaued, and shareholders are changing tactics. Rather than calling for emissions reductions, investors in major oil companies are using financial language, demanding clarity on how peak oil will affect shareholder value. Regardless of terminology, climate change remains a long-term systemic threat and with risks to financial stability.

Artificial intelligence is being treated with similar pragmatism. Unlike earlier, when AI related proposals focused on societal impact, these days, AI is shrouded in concerns over board oversight, ethical guidelines, and risk management. This aligns with long standing investor emphasis on competence and accountability.

Moonshot awards are another trend drawing scrutiny. These very large payouts for extraordinary performance (often on a single KPI) raise several concerns: they provide little guarantee for consistent long term performance, may encourage excessive risk taking since executives capture the upside while shareholders bear the downside, and undermine traditional compensation structures that reward sustained success across diverse goals.

In the US, we expect fewer, but more focused, shareholder proposals. Proxy fights, M&A campaigns, and board level interventions will remain prominent, but the overall volume of proposals is on the decline. This is largely due to regulatory rulings and changes to voting procedures that influence who can file a resolution and which proposals actually reach the ballot. New SEC rules are making it harder for small shareholders to have a voice by limiting the use of EDGAR¹ to investors holding at least USD 5 million in company shares.

At the same time, the SEC’s reduced use of ‘no action’ letters has shifted power to companies, by leaving it up to them to decide which proposals make it to the AGM ballot. Thus far, corporate responses have been mixed with some leaving proposals on the agenda, while others are using it as a tool to strip ballots of unwanted proposals and external pressure.

Meanwhile, power is decentralizing in Asia as governance reforms distribute influence away from conglomerates and complex cross-shareholding entities toward broader groups of shareholders.

Illustrative examples include South Korea’s Value Up initiatives and Japan’s ongoing structural reforms which aim to improve governance quality, reduce risks, unlock capital, and enhance long term shareholder value. And though are expectations are muted, there positive signals are also emerging from China.

As the 2026 proxy season kicks off, the volume of filings and more about their substance. Investors are stripping away ideological packaging and returning to core principles: risk, resilience, governance, and long term value creation. The power of stewardship isn’t diminishing; it’s just changing shape.

Footnote

¹EDGAR, Electronic Data Gathering, Analysis and Retrieval system