ESG+ Newsletter – 4 September 2025

US investors rejected all environmental proposals in 2025

As reported by the Financial Times, for the first time in six years, no environmental shareholder proposals received majority support from investors during the US 2025 proxy season – signalling a broader shift in investor approaches to climate-related initiatives. Environmental proposal successes peaked at 14 in 2022, dropped to just two in 2024, and fell to zero this year. The total number of environmental resolutions filed also decreased from 149 in 2024 to 110 in 2025, while average investor support slipped from 18% to just 10%. Several factors contributed to this trend. Republicans have criticised, and even in some cases penalised investors for pursuing climate risk initiatives. At the same time, improved corporate climate disclosures have partly eased investor concerns about risk management. The two major proxy advisers, Glass Lewis and ISS, whose recommendations typically influence overall support levels on shareholder votes, have also faced criticism from Republicans who accused them of providing “ideologically driven” recommendations. A recent Reuters article documented a significant decrease in their backing of environmental proposals in 2025.

The decreased use of shareholder proposals and declining investor support on remaining proposals does not necessarily signal diminishing interest in climate risks. Experts suggest this represents a strategic evolution rather than an abandonment of climate concerns, with investors adopting a more collaborative approach to climate activism, prioritising dialogue over confrontational tactics.

Net-Zero Banking Alliance suspends activities

The United Nations backed banking alliance has paused operations following the departure of several European and US based financial institutions. The pause comes as the Net-Zero Banking Alliance (NZBA) initiates a vote to decide on whether to continue working as a membership-based alliance or operate as a framework initiative, with the outcome to be shared at the end of September. Previous revisions of NZBA’s framework did little to stem the departures, which were driven by political pressure, legal risk concerns, and reputational recalibration in key markets. The Wall Street Journal notes that the departing banks have stated that NZBA membership is no longer necessary as ESG has been appropriately incorporated into business practices over the past five years. More than 120 banks from 40 different countries joined the NZBA since its inception in 2021. Despite current turbulence, many global banks – according to Responsible Investor – have reaffirmed their commitment to climate action and the importance of net-zero goals.

Balancing free speech and investor interest through Texas law

A federal judge has blocked the enforcement of a Texas law that sought to restrict proxy advisers from offering guidance on DEI and ESG issues. The law, originally scheduled to take effect on 1 September, would have required proxy advisers to include disclaimers stating that advice on non-financial matters may not align with shareholders’ financial interests, and to provide supporting financial analyses. Reuters reports that while the law’s proponents argue that it promotes transparency and accountability, its critics contend that it unconstitutionally forces proxy advisers to convey the state’s preferred views on hot-button issues, thereby undermining their First Amendment rights. As the case progresses, its outcome could shape how investors access information and weigh DEI and ESG factors in corporate governance and investment strategies. The ruling will also likely influence broader debates over the intersection of free speech, state regulation, and investor choice.

Growing ESG investment in nuclear stocks

Since Russia’s invasion of Ukraine in 2022, ESG funds exposed to the nuclear arms industry have risen sharply, accounting for nearly half of all ESG-focused funds in Europe. Reuters reported that in March, the EU Commission under its ReArm Europe plan issued guidance on how defence investment could qualify as sustainable under the SFDR by linking it to SDG 16 (peace, justice and strong institutions). While investments that qualify as sustainable within the EU must exclude “controversial weapons,” nuclear arms are not covered by this restriction. Bloomberg analysed more than 1,500 ESG-labelled funds and found that 9% hold at least one of 14 companies excluded by Norway’s sovereign wealth fund for involvement in nuclear arms. Euronext CEO Stéphane Boujnah, described this shift as a “new ESG,” centred on energy, security, and geostrategy. He noted a growing preference among civil society and investors to prioritise national resilience.

At the heart of the debate is what ESG investing should represent. Advocates argue that defence-related investment can align with sustainable objectives when linked to peace and security goals. Critics counter that channelling ESG capital into weapons—especially those capable of long-term environmental and social harm—undermines the very principles ESG investing was designed to promote.

AI is slowly but surely entering the board room

In its August issue, Harvard Business Review explored how corporate boards are beginning to adopt AI, drawing on focus groups with over 50 board members worldwide. While some AI use cases have existed for years, such as the much-publicised 2014 example of a Hong Kong company appointing an algorithm with voting power to its board – many boards remain cautious. Contrary to the media buzz, AI ranked lower on the list of boardroom priorities, as Directors cited geopolitical uncertainty and engagement with CEOs or key shareholders as more pressing concerns. 

Despite this, HBR argues that AI holds potential to bridge the knowledge gap between Directors and Executives. Some board members, including Chairs, have started experimenting with tools like ChatGPT to draft discussion questions, explore strategic alternatives, and simulate scenarios – even for high-stakes decisions such as acquisitions. One Swiss industrial company, for example, used AI to analyse boardroom dynamics – tracking speaking time, tone, and participation to generate recommendations for improving collaboration and decision-making. The possibilities for AI in the boardroom are broad, but so are the risks. Chief among them are data security concerns and the potential for algorithmic bias. As with any AI deployment, governance is critical. Boards must establish clear guidelines: defining acceptable use, understanding the risks, setting protocols for monitoring and reporting, and ensuring AI tools are used responsibly and transparently. 

Ryanair CEO critiques sustainability targets for aviation 

Ryanair Chief Executive Michael O’Leary has said sustainability targets for aviation are “dying a death“, warning that the industry is unlikely to meet both the 2030 goals for sustainable aviation fuel (SAF) and the 2050 net-zero mandate. Reuters reports on commentary from O’Leary who stated, “I don’t believe SAF is a good thing – I think it’s nonsense”. SAF has been positioned as a key tool in reducing airline emissions and moving global aviation toward net-zero. However, there is much more to be done in addressing the challenges associated with producing sufficient SAF to meet global requirements. While O’Leary is known for his controversial comments, this statement comes as the industry begins to question whether SAF will become commercially viable. 

ICYMI 

• Global warming is curbing workers’ productivity according to a study by the World Health Organisation. The study revealed that, as the frequency and intensity of heat waves increase, workers face a growing risk of heatstroke, dehydration, kidney disfunction and other effects.
• Bonds carrying a traditional ESG label account for the lowest share of corporate debt issuance in years, Bloomberg reports.