In this week’s edition of Economy and Society:
- SEC chairman looks to limit ESG shareholder proposals
- EU to delay sustainability reporting for non-EU companies
- EU votes to limit reach of ESG directives
- Europe holds 85% of global ESG assets
- ESG reshapes business school rankings
In Washington, D.C., and around the world
SEC chairman looks to limit ESG shareholder proposals
What’s the story?
The Securities and Exchange Commission (SEC) will reevaluate its shareholder proposal rule, a federal rule that allows investors to include certain proposals in company proxy filings, Chairman Paul Atkins said. Atkins argued the existing rule—originally adopted in 1942—has contributed to the politicization of shareholder meetings, particularly through proposals tied to environmental, social, and governance (ESG) goals. He said the SEC will consider whether investors should be able to compel companies to circulate proposals “at little or no expense to the shareholder.”
Why does it matter?
Atkins’ remarks highlight the SEC’s continued movement toward narrowing the scope of ESG-related shareholder activity. The agency has signaled throughout 2025 that it aims to reduce compliance burdens and shift decision-making power back to corporations. If the commission limits ESG proposals, it could significantly curtail investors’ ability to influence company policies through proxy filings—continuing a broader federal effort to redefine the boundaries of ESG governance.
What’s the background?
The SEC’s shareholder proposal rule, in place since the 1940s, was originally intended to enhance shareholder participation in corporate governance. In recent years, the rule has become a focal point for debates over the role of ESG in investing. Earlier in 2025, the SEC withdrew two proposed ESG disclosure rules, part of a wider rollback under the Trump administration aimed at easing corporate reporting requirements. Atkins’ call for review builds on that trajectory, reinforcing a regulatory shift away from mandatory ESG consideration in favor of company discretion.
EU to delay sustainability reporting for non-EU companies
What’s the story?
The European Union (EU) will postpone its requirement that non-EU companies adopt upcoming sustainability-reporting standards under the Corporate Sustainability Reporting Directive (CSRD). The delay, part of the Omnibus I reform package the European Parliament’s Legal Affairs Committee approved on October 9, 2025, would move the compliance date from June 2026 until at least October 2027. Lawmakers said the measure is intended to simplify the EU’s sustainability framework and ease reporting burdens for foreign firms.
Why does it matter?
The revision gives multinational corporations more time to prepare for Europe’s sustainability-reporting rules, which require detailed climate and social disclosures for large companies with significant EU operations. Businesses have warned that overlapping global disclosure regimes add cost and complexity. EU policymakers said the revised timeline will help maintain competitiveness and support alignment with international standards.
What’s the background?
The delay follows the European Parliament’s vote to approve the Commission’s “stop-the-clock” directive, which postponed implementation of the CSRD and Corporate Sustainability Due Diligence Directive (CSDDD) as part of the Omnibus I package. That vote marked a major step in the EU’s effort to scale back ESG reporting rules. See Ballotpedia’s Economy and Society: April 8, 2025 for earlier coverage of this vote.
EU votes to limit reach of ESG directives
What’s the story?
The European Parliament voted on October 13, 2025, to raise the company-size thresholds for compliance with the CSRD and the CSDDD, limiting the scope of the EU’s sustainability and due-diligence regulations. The changes will reduce reporting burdens for small and mid-sized firms and allow regulators to focus oversight on large corporations.
Why does it matter?
The vote marks another major step in the EU’s ongoing effort to simplify and scale back ESG requirements. Combined with last week’s approval of the Omnibus I delay for non-EU companies, the change further narrows how broadly the EU’s sustainability rules will apply.
What’s the background?
Lawmakers first moved to postpone and streamline reporting obligations earlier in 2025 through the European Commission’s Omnibus I package, which proposed delaying sustainability-reporting deadlines, narrowing company coverage, and reducing sector-specific disclosure requirements. The initiative aims to simplify the EU’s ESG framework, lower compliance costs for smaller firms, and align European reporting standards more closely with international practices. See Ballotpedia’s Economy and Society: June 17, 2025 for prior coverage of efforts to ease EU ESG obligations.
On Wall Street and in the private sector
Europe holds 85% of global ESG assets
What’s the story?
Europe continues to lead the world in ESG investing, holding about 85% of global ESG assets, or roughly $3 trillion, according to research from Morningstar. Despite political debates about ESG’s definition, Europe’s markets have seen steady growth in sustainable investing over the past year. Data from the European Securities and Markets Authority (ESMA) found that funds using ESG in their names tend to attract more investor money.
Why does it matter?
The data show that ESG investing continues to be most established in Europe, where sustainability funds still attract the vast majority of global assets and investor inflows. As the ESMA noted “advertising an ESG stance materially affects the net inflows experienced by fund managers.” That finding helps explain why, despite growing scrutiny and regulatory tightening, the ESG label continues to carry strong appeal among investors.
What’s the background?
Europe’s position in sustainable investing is supported by a series of financial disclosure rules introduced over the past several years. These include the Sustainable Finance Disclosure Regulation, which requires investment firms to report how they consider sustainability risks, and the CSRD, which expands corporate sustainability reporting requirements.
In the spotlight
ESG reshapes business school rankings
What’s the story?
ESG principles are changing how business schools are ranked worldwide. Both the Financial Times and QS have incorporated sustainability-related criteria into their methodologies, reflecting growing interest among students and employers. About two-thirds of prospective business school students say sustainability is important to their academic experience, and more than a third would not consider a program that does not prioritize it, according to the Graduate Management Admission Council (GMAC).
Why does it matter?
The inclusion of ESG factors means schools must demonstrate real commitments to sustainability to remain competitive in global rankings. As prospective students increasingly seek programs aligned with social and environmental values, these metrics are shaping curriculum design, faculty research, and institutional strategy—especially outside the United States, where ESG backlash has been less pronounced.
What’s the background?
Sustainability has shifted from an optional course topic to a core part of MBA curricula, particularly in Europe. Schools are redesigning programs to integrate sustainability throughout coursework and projects, signaling a broader redefinition of what constitutes business education today