ESG Proxy Proposals Land on Easier Path for Vote After SEC Change

Companies will need fresh ways to fend off activist shareholders in next year’s proxy season on issues like climate change and social justice, after the SEC made it harder to exclude ballot proposals from annual corporate meetings.

The Securities and Exchange Commission will impose tighter scrutiny on companies that use traditional ballot-battle tactics—such as relying on their prior arguments and past SEC decisions to win the agency’s support—to quash shareholder proposals on environmental, social and governance issues. The agency announced the changes to its no-action letter policy last week.

The move reflects the agency’s heightened emphasis on corporate ESG disclosures, ...