Shareholder Rights and SEC Policy | Interfaith Center on Corporate Responsibility

Advocates Sue Attorney General Ken Paxton to Stop Legislation that Unlawfully Hamstrings Constitutionally-Protected Freedoms.

Austin, TX – Sustainable business advocates and faith-based investment organizations have taken action to block wide enforcement of a new Texas law, known as SB 2337, that would prevent investors from having unrestricted access to expert advice about their investments. The filing argues that SB 2337 violates the free speech guarantees of the First Amendment and is unconstitutionally vague under the due process clause of the Fourteenth Amendment.

The law’s restrictions on advice given to investors as they consider matters affecting their investments are a clear violation of the First Amendment rights of investors and advisors. Today, the Interfaith Center on Corporate Responsibility, United Church Funds, and Ceres filed a lawsuit in the United States District Court for the Western District of Texas seeking to stop Texas Attorney General Ken Paxton from enforcing the unconstitutional law. The coalition is represented by Democracy Forward in the matter.

In late August, a federal judge enjoined enforcement of the law against the two dominant firms in the world of shareholder proxy advising – Glass Lewis and ISS. The law, however, remains in effect for other organizations, and its scope covers a wide range of activities that are related to shareholder advocacy and proxy advising. Among other things, the law exposes non-profit organizations to liability.

The plaintiffs are faith-based and non-profit organizations that, as part of their missions, partner with institutional investors to engage with companies to seek strong long-term financial performance. As part of that work, the plaintiffs take into account environmental and social impacts of company practices, as well as strong corporate governance and other factors, because they believe – correctly – that these factors can be central to the long-term financial success of companies. SB 2337 classifies those factors as “nonfinancial” and places burdensome restrictions on sharing such considerations with shareholders.

“This law restricts the freedom to invest. Hiding the truth about important long-term aspects of their investments is a disservice to investors. Doing so is not just bad for the future of our communities and our planet, but it is also unconstitutional,” said Skye Perryman, President and CEO of DemocracyForward. “Our team at Democracy Forward is honored to work with the Interfaith Center on Corporate Responsibility, United Church Funds, and Ceres to defend the right to speak about investments and exercise shareholder rights in Texas.”

“This attempt to silence investors is an unacceptable attack on the First Amendment and the rights of Americans across the country, all in service to special interests. A robust and dynamic economy requires honest competition and the free exchange of ideas that leaders in Texas are seeking to undermine with this law. For these reasons and in light of our longstanding mission to support faith- and values-based investors, we are grateful for the opportunity to join this lawsuit,” said Josh Zinner, CEO of the Interfaith Center on Corporate Responsibility.

“Our approach to investing has always joined faith and fiduciary duty,” said Rev. Dr. Charles C. Buck, President and CEO of United Church Funds. “Texas’s law is written so vaguely that even ordinary, good-faith stewardship could be misinterpreted as unlawful. Responsible investors shouldn’t have to guess whether sharing our values or our analysis puts us at risk for simply doing our jobs.”

The Democracy Forward legal team working on the case includes Victoria Nugent, Tsuki Hoshijima, and Jennifer Fountain Connolly.

The complaint filed today is available here.

CONTACT: press@democracyforward.org

About the Interfaith Center on Corporate Responsibility (ICCR)
The Interfaith Center on Corporate Responsibility (ICCR) is a broad coalition of more than 300 institutional investors collectively representing over $4 trillion in invested capital. ICCR members, a cross-section of faith-based investors, asset managers, pension funds, foundations, and other long-term institutional investors, have over 50 years of experience engaging with companies on environmental, social, and governance (“ESG”) issues that are critical to long-term value creation. ICCR members engage hundreds of corporations annually in an effort to foster greater corporate accountability. Visit our website www.iccr.org and follow us on LinkedIn, and Bsky.

About the Democracy Forward Foundation
Democracy Forward Foundation is a national legal organization that advances democracy and social progress through litigation, policy, public education, and regulatory engagement. For more information, please visit www.democracyforward.org.

Join us on the evening of Thursday, October 23rd at The Riverside Church, 490 Riverside Dr. in New York City from 5:00 – 8:00 PM for ICCR’s annual event where we’ll hear from a panel of investors and corporate representatives about the value of these exchanges in bringing about a Meeting of the Minds to mitigate critical environmental and social risks threatening people and planet. In addition to the panel, there will be a cocktail reception followed by a light dinner.

Regular dialogue between shareholders and their portfolio companies as a venue to share information, gain new perspectives, and ultimately advance progress on common issues of concern has long been the preferred engagement strategy of long-term and responsible investors. These conversations help to foster a sense of trust and accountability, and to the degree that they include stakeholders directly impacted by corporate operations, they also foster empathy and give companies a unique outlook on potential risks.

In remarks last week before the John L. Weinberg Center for Corporate Governance, SEC Chair Paul Atkins made it clear he would support an effort to strip rights away from investors through limiting their ability to submit shareholder proposals. This proposed change would upend 80 years of precedent at the SEC and in corporate governance in the United States and immediately set off alarms throughout the investment community. ICCR released the following statement responding to the SEC Chair’s remarks:

“ICCR is deeply concerned with the October 9 speech from SEC Chair Paul Atkins at the Weinberg Center for Corporate Governance, in which he essentially suggested a ‘road-map’ to issuers to remove any non-binding shareholder proposal from the corporate proxy. This idea, if implemented by the SEC without any public input, would be a radical and short-sighted departure from more than 80 years of precedent in which shareholder proposals have been a critical tool in a private ordering process that has led to important improvements in corporate governance, and corporate policies and practices, that have benefited both companies and investors. This long-standing process has given generations of American investors greater voice and power and in turn helped build a stronger and more dynamic economy, safeguarding the investments that millions of American families depend upon.

At a time of growing unease about the condition and direction of the U.S. economy, Chair Atkins should be seeking to strengthen rather than undermine investor protections, particularly given his agency’s investor protection mandate. In the weeks ahead, it is crucial for shareholders and their allies to speak out forcefully against this proposal to change 80 years of precedent supporting the rights of shareholders to file resolutions with companies, further weakening accountability at every level.”

EL CERRITO, CA — September 30, 2025 —Today, shareholder representatives As You Sow and Interfaith Center for Corporate Responsibility (ICCR) filed a request with the U.S. Securities and Exchange Commission (SEC) to rescind its effective approval of ExxonMobil’s “Retail Voting Program.” Exxon’s program, under the guise of ‘assisting’ retail voters, seeks to opt retail shareholders into a program that would cast their votes in favor of management for all future meetings, unless and until shareholders take steps to opt-out.

Rule 14a-4, however, states that authority to vote on behalf of a shareholder cannot be given for more than a single annual meeting, with voting materials furnished in advance of giving such authority. SEC’s 14a-4 proxy voting rules were promulgated to ensure that shareholders who have invested their capital have an effective voice in company management. Exxon’s plan does the opposite.

“This program is a direct attack on shareholder rights,” said Andrew Behar, CEO of As You Sow. “Currently retail voters hold roughly 40% of Exxon shares and nearly 75% of those shareholders currently do not vote. A standing proxy in favor of management therefore significantly increases the odds of a perpetual management advantage. This goal is underscored by the fact that Exxon fails to make available an equivalent standing vote against management.”

“Rules like 14a-4 are crucial for ensuring that the powerful corporate players in our economy remain accountable to their stakeholders and positioned for long-term success. Under Exxon’s proposed program, retail investors would relinquish their rights to evaluate company performance annually and cast their votes accordingly, thereby potentially granting management carte blanche on critical governance issues such as contested board contests, CEO pay votes, and other matters. The Exxon scheme assumes that investors prefer to be passive when what is clearly needed to ensure successful companies are more engaged, active investors.” said Josh Zinner, CEO of ICCR.

“Exxon’s violation of current SEC proxy rules is not a technical footnote,” said Danielle Fugere, President & Chief Counsel of As You Sow. “Although Exxon equates its program to existing third party voting guidelines like “As You Vote,” its program is fundamentally different. As You Vote and a range of other 3rd party voting guidelines apply to all companies and there is no self-interested vote as with Exxon’s scheme. The securities laws are clear — proxies must be given annually, after investors receive the meeting-specific issues on which they will be voting. Exxon’s retail voter program blatantly ignores those requirements. Allowing this program to proceed would set a dangerous precedent that undermines the integrity of our markets.”

CONTACT: Ryon Harms, ryon@asyousow.org, (310) 730-9407

About As You Sow. As You Sow is the nation’s leading shareholder representative, with a 30+ year track record promoting environmental and social corporate responsibility. Its focus areas include climate change, ocean plastics, toxins in the food system, the Rights of Nature, racial justice, and workplace diversity. Click here to view As You Sow’s shareholder resolution tracker.

About the Interfaith Center on Corporate Responsibility (ICCR). The Interfaith Center on Corporate Responsibility (ICCR) is a broad coalition of more than 300 institutional investors collectively representing over $4 trillion in invested capital. ICCR members, a cross-section of faith-based investors, asset managers, pension funds, foundations, and other long-term institutional investors, have over 50 years of experience engaging with companies on environmental, social, and governance (“ESG”) issues that are critical to long-term value creation. ICCR members engage hundreds of corporations annually in an effort to foster greater corporate accountability. Visit our website www.iccr.org and follow us on LinkedIn and Bsky.

From Reuters: Exxon Mobil (XOM.N) is introducing a new shareholder voting mechanism that will allow retail investors to automatically cast ballots in step with board recommendations during annual meetings, a move that may help the top U.S. oil producer fend off activist campaigns.

- SEC allows Exxon’s auto-voting plan for retail investors

- New mechanism may help Exxon counter activists

- Retail investors hold significant shares but can have low voting turnout

Read the full article on Reuters

NEW YORK, NY, TUESDAY, AUGUST 26, 2025 – Today, the Interfaith Center on Corporate Responsibility (ICCR), a coalition of over 300 institutional investors who, for more than 50 years, have been leaders in faith-consistent and sustainable investing, issued a statement in defense of this practice as a question of religious freedom protected under the U.S. Constitution.

The statement follows recent attacks on ethical investing, including an inquiry from the House Judiciary Committee, which accused investors employing investment strategies to mitigate deleterious environmental and social impacts — including several of ICCR’s faith-based members — of violating antitrust laws.

“Since our inception over 50 years ago, ICCR has brought together faith-based investors who engage directly with portfolio companies on issues reflecting the values of their faith traditions, and who believe that corporations must view the well-being of all of their stakeholders ― including their workers and the communities where they operate ― as integral to their long-term value,” said Josh Zinner, CEO of the Interfaith Center on Corporate Responsibility. “Faith and values investors have always made common cause supporting the health and future of people and planet, and their engagements have helped catalyze important changes at the world’s most powerful companies. The increasing politicized attacks on ESG and faith-consistent investors aim to thwart this important work, and risk violating our country’s free speech and freedom of religion guarantees.”

Some of the issues where faith investors cooperate to press for a change in corporate practices include the climate crisis, forced labor and worker rights, and health equity. According to the statement, religious organizations view investor engagements with portfolio companies on these issues as central to both their duties as trusted fiduciaries seeking competitive returns and their responsibilities as faithful stewards supporting the fundamental values of their religious traditions. The statement further affirms that faith investors believe that “companies that adopt forward-looking policies and practices to mitigate environmental and social risks are well-positioned for long-term financial success and value creation. Conversely, companies that ignore these risks may endanger the performance of the capital we are called to steward, and impose enduring external costs on society, the economy, and the planet that sustains us.”

Documents such as the 2016 Edinburgh Finance Declaration seek to articulate the shared values of faith investors.

“Catholic sisters have been engaged in socially responsible investing for more than fifty years because our faith demands it. As women religious and faith-consistent investors, we strive to enhance the common good by investing in companies that promote human flourishing and environmental justice and by challenging companies that cause harm,” said Ann Scholz, SSND, Director of Corporate Social Responsibility for the School Sisters of Notre Dame Collective Investment Fund.“Our faith-consistent investing ministry is one very important way that we seek to address the social and economic injustices of our day and work to establish God’s beloved community.”

Said Christopher Cox, Executive Director at Seventh Generation Interfaith Coalition for Responsible Investment, “For generations, faith communities have heard the call to invest with a clear moral purpose—aligning our financial choices with our deepest beliefs. Faith-consistent investing is a powerful witness that our economic decisions can and must serve the common good, protect creation, and uphold human dignity.”

The statement cites the Constitution’s ban against government interference in the free exercise of religion, which protects faith investors’ right to freely make investment decisions in accordance with the values of their religious organizations. Examples of the investment guidelines of several faiths are included. In addition to the First Amendment, the statement cites the Church plan exemption in the Employee Retirement Income Security Act of 1974 as a basis for religious institutions to be exempt from the federal government’s overreach.

“Through the decades, faith-based investors have brought crucial issues to companies concerning the environment, human rights, and corporate governance,” said Katie Carter, Director of Faith-Based Investing and Shareholder Engagement at the Presbyterian Church (U.S.A.). “As other levers of influencing change become more difficult, leveraging our financial resources with companies is more important than ever.”

Said Steven Owen, Strategic Marketing Manager, FaithInvest, “Faith-consistent investing, when thoughtfully implemented, can lead to improved investment outcomes by addressing systemic risks that traditional investment approaches often overlook. And, faith-consistent investors, with their focus on long-term stewardship and values alignment, are well-positioned to contribute to a market environment where all participants can benefit.”

On May 6, 2025, the Interfaith Center on Corporate Responsibility (ICCR) and the Shareholder Rights Group (SRG) sent a letter to BRT, copying the Chairman of the SEC. The letter offered ICCR’s and SRG’s view that BRT’s recommendations would “insulate corporate management and boards, exposing companies and investors to increased risk during a highly volatile economic moment” and requested a dialogue with BRT to discuss the proxy process.

Limited pushback after Business Roundtable calls for ban on environmental, social and ‘political’ proposals

ICCR and the Shareholder Rights Group sent this letter to BRT leadership with a copy to the new SEC Chair, Paul Atkins, challenging their recommendations and requesting a dialogue to further discuss our contrasting perspectives about the proxy process in the hopes of achieving a more shared understanding.

Stakeholders push back against criticisms by group whose members including leading US asset managers and owners.

Leading Sustainable Investing and Faith-Based Organizations Sue to Block Wide Enforcement of Texas Law That Restricts Shareholder Advocacy, Free Speech