More shareholder proposals with a focus on environmental and social issues are likely to make it onto company proxy statements in 2022, thanks to new Securities and Exchange Commission guidance, sources said.

In a legal bulletin published Nov. 3, the SEC’s division of corporation finance rescinded its last three legal bulletins — promulgated under the Trump administration — related to Exchange Act Rule 14a-8, that concern shareholder proposals. The latest bulletin also outlined changes in the division’s views on what constitutes “ordinary business” and “economic relevance” when it determines whether a shareholder proposal should be excluded from a company’s proxy statement.

“It’s pretty clear that the goal of this, whether it’s stated or implicit, is to allow more E and S proposals to end up in company proxy,” said Sean Donahue, Washington-based partner in Goodwin Procter LLP’s capital markets practice and chairman of the law firm’s public company advisory practice.

Shareholders can file proposals before a company’s annual meeting. If a company thinks a proposal is out of bounds or has already been addressed, it can file a no-action letter with the SEC, requesting permission not to include the proposal in its proxy statement.

Under the previous administration, the SEC issued bulletins that included language that made it more likely for the SEC to rule in favor of companies seeking no-action relief, sources said.

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