Interfaith Center on Corporate Responsibility et al. v. SEC
A Washington, D.C. federal judge on June 5 upheld the SEC’s 2020 rulemaking that raised the ownership and resubmission thresholds for shareholder proposals—rules critics say muzzle ESG activism.
Court’s Rationale
Judge Reggie Walton held that the Commission reasonably weighed “efficiency, competition, and capital formation” and provided the quantitative or qualitative analysis the Administrative Procedure Act requires.
Why Corporations Care
- Fewer ESG votes: Smaller activists must now amass larger stakes (or team up) to get climate or human‑rights motions onto proxy ballots.
- Proxy‑season predictability: Boards gain breathing room to focus on proposals with material shareholder backing.
- Precedent for future rules: The SEC can point to this win as it defends its climate‑disclosure and cybersecurity proposals winding through the courts.
Activists’ Playbook
ICCR, As You Sow, and allies vow more off‑ballot engagement—private letters, coalition campaigns, and state‑level initiatives targeting fiduciary‑duty statutes.
