Companies are also reviewing the ESG content in their proxy statements since those compliance documents have increasingly included a description of a company’s ESG priorities and accomplishments. Consequently, the 2025 proxy season provides a unique glimpse into how companies are navigating the evolving landscape.
This Thought Piece explores some of the approaches taken and considerations for companies to consider as they prepare for the next annual meeting season.
Note that practices and disclosures related to human capital management, especially diversity, equity and inclusion (DEI), received the most attention and are not the subject of this Thought Piece. For preliminary observations on how companies pivoted with their DEI disclosures in 2025, see the Labrador Thought Piece on DEI here.
- The terms ESG and sustainability are used interchangeably throughout this Thought Piece. Note, though, that there has been a general trend of moving away from ESG terminology.
State of Play Before the 2025 Proxy Season
Disclosures about corporate sustainability topics, and Board oversight of related risks and opportunities in proxy statements increased as companies expanded their definition of performance and value creation for a broader group of stakeholders.
This was in part driven by investor voting practices as they expressed a willingness to vote against directors and/or support sustainability-related proposals if they found disclosures lacking. In addition to including a Board oversight section, which describes how sustainability-related oversight responsibilities are allocated, many companies included select ESG highlights from the preceding year. They often also included an express commitment to transparency, highlighting the company’s current reporting practices and naming any recognized frameworks that the company reports in accordance with or is working toward.
Based on Labrador’s recent benchmark of 115 proxy statements, approximately 50% of companies included a sustainability/ESG highlights section in their 2025 proxy statement. Discussion of a company’s material sustainability-related topics allowed shareholders to evaluate whether these considerations were appropriately integrated into key processes and decisions.
49%
includes an ESG highlights/summary section
43%
includes an overview of ESG focus areas/prioritized topics
What Investors Want Now
ESG in institutional investors’ voting guidelines
Even with the increased scrutiny of a corporation’s role in environmental and social matters, recent surveys show that investors are still focused on the ESG issues that have clear financial implications, like climate risk, human capital and cybersecurity2. Likewise, the EY Center for Board Matters found that climate change and environmental stewardship is still a top three priority for investors3. The 2025 proxy voting guidelines for three of the largest institutional investors expressly seek disclosures related to these topics.
Excerpts from the 2025 proxy voting guidelines of the three largest institutional investors:
BlackRock
Proxy voting guidelines for Benchmark Policies – U.S. securities
Effective January 20254
We find it helpful when companies’ disclosures demonstrate that they have a resilient business model that integrates material sustainability-related risks and opportunities into their strategy, risk management, and metrics and targets.
[W]e encourage [companies] to produce sustainability-related disclosures sufficiently in advance of their annual meeting, to the best of their abilities to provide investors with the time to assess the data and make informed decisions.
In our experience, disclosure consistent with the ISSB standards or the TCFD framework can help investors assess company-specific climate-related risks and opportunities and inform investment decisions.
State Street
Global Proxy Voting and Engagement Policy
Effective March 20255
We look to companies to provide disclosure on sustainability-related risks and opportunities relevant to their businesses in line with applicable local regulatory requirements and any voluntary standards and frameworks adopted by the company.
We believe that managing climate-related risks and opportunities is a key element in maximizing long-term risk-adjusted returns for our clients.
Vanguard
Proxy voting policy for U.S. portfolio companies
Effective February 20256
[A] company’s board has responsibility for providing effective oversight of strategy and risk management. This oversight includes material sector- and company-specific sustainability risks and opportunities that have the potential to affect long-term shareholder returns.
[W]e believe that a company’s fulsome disclosure of material risks to its long-term shareholder returns is beneficial to the public markets to inform the company’s valuation.
[T]o assess a climate risk oversight failure, factors for the funds to consider include: the materiality of the risk as identified by the company; the effectiveness of disclosures to enable the market to understand and price the risk; whether the company has disclosed plans to mitigate material risks in the context of regulatory requirements and consideration for company-specific context, market regulations, and market practices.
ESG in shareholders’ proposals
In addition to institutional investor voting guidelines, it is also important to look at the shareholder proposal landscape in 2025.
In Georgeson’s annual publication titled “An Early Look at the 2025 Proxy Season,” a few shareholder proposal trends are noted. The publication covered proxy voting results from Russell 3000 companies that had annual general meetings between July 1, 2024, and May 16, 2025.
Some of the trends noted by Georgeson included:
- a lower volume of shareholder proposals,
- an increased number of “no action” requests granted by the SEC,
- a decline in environmental and social proposals,
- an increase in anti-ESG proposals, and
- lower support for environmental and social proposals (Georgeson also noted a decline for the third consecutive year).
Georgeson notes that even with a year-over-year decrease in total submission volumes, though, environmental topics remained a consistent level of focus.
Observations from the 2025 Proxy Season
In response to the increased scrutiny by anti-ESG factions but mindful of continued investor interest in those topics with clear financial implications, companies took a variety of approaches to ESG disclosures in their 2025 proxy statements.
In reviewing several 2025 proxy statements, Labrador did not notice a “one size fits all” approach but found that companies tailored their response based on their unique circumstances and shareholder base.
Below are some of the approaches taken by companies in 20257:
- Stay the course and retain a description of their ESG programs. For the companies that retained their disclosure in 2025, many acknowledged a clear tie to their business and long-term value creation.
- Retain some disclosure but reduce the amount of content or modify the description to delete controversial words or programs.
- Reduce the amount of content or pages devoted to ESG7.
- Change the location of the disclosure so that it is not front and center, e.g., move the disclosure out of the proxy statement summary.
- Change the nomenclature to remove references to ESG. Companies often use other words like impact, corporate stewardship, or corporate responsibility.
- Make other changes, such as deleting qualifications from the directors’ skills matrix related to climate or ESG and removing stand-alone sections related to ESG stockholder engagement.
- Delete any ESG disclosure from the proxy statement.
- Many companies reduced or deleted their DEI disclosures (or changed their DEI terminology) in 2025 proxy statements. As noted earlier, this Thought Piece does not cover changes to human capital management or DEI disclosures.
Examples
Included on the following pages are examples of how companies addressed their ESG disclosures in 2025 proxy statements.
Includes a statement that corporate citizenship and success go hand in hand. Includes a one-page infographic that describes Board, committee and management oversight of corporate social responsibility and sustainability, and a separate page with select highlights.
Includes an affirmative statement that their sustainability strategy is aligned with their business objectives. The two-page spread is highly visual, with one page devoted to their strategy and highlights and the other page devoted to sustainability governance.
Includes a statement that their corporate impact initiatives are vital to value creation and long-term success. Includes two pages of highly visual corporate impact highlights in the introductory pages and a separate discussion in the Oversight section covering oversight, strategy and key initiatives.
Includes one page at the beginning of the proxy statement in their “Honeywell Performance in 2024” section with select sustainability highlights that implicitly tie sustainability performance to business performance. Also includes a section later in the risk oversight section related to oversight of ESG.
Includes an affirmative statement that sustainability is integrated throughout business strategy. Disclosure spans three pages, with one page devoted to governance and two pages to the key initiatives, including how their materiality assessment/stakeholder engagement defines their sustainability management plan.
Includes a short description of their approach to corporate responsibility and the body responsible for overseeing governance, as well as an affirmative statement that stakeholder assessments and business priorities drive their corporate responsibility programs.
Looking Ahead
One thing is certain – the landscape will continue to evolve as the different political parties, special interest groups and other stakeholders work to advance their priorities and search for common ground. At least in the near-term, though, many large investors still prioritize climate risk, environmental stewardship and other issues that have direct financial implications for companies.
In response, we advise that companies still include an oversight section in proxy statements that describe how sustainability-related responsibilities are allocated among management personnel, the Board and its committees. In addition, best practice companies are tying Board oversight of sustainability to the company’s strategy and stakeholder feedback. Any disclosures beyond an oversight description are dependent on a company’s particular circumstances and investor base. In all cases, though, companies should provide enough information about issues that have a direct financial implication to allow stockholders to make an informed decision when voting on a company’s directors.
Companies should always be mindful of the consistency of sustainability-related disclosures between their proxy statement and sustainability reports. Attention should be given to a thoughtful review of a company’s disclosure documents to ensure a consistent and coherent message.