Differences in environmental stewardship: American corporate leaders diminish backing for climate-related initiatives while European counterparts strengthen their commitment.
In a significant development, the support for environmental, social, and governance (ESG) resolutions is decreasing among the world's largest US-based asset managers. This decline, primarily due to regulatory changes, political pressures, and evolving investor priorities, has important implications for climate alliances such as the Net Zero Asset Managers Initiative (NZAM) and Climate Action 100+ (CA100+).
The U.S. Securities and Exchange Commission (SEC) introduced stricter guidance early in 2025 that allowed companies more leeway to exclude ESG proposals from shareholder ballots, leading to a decrease in the number of ESG proposals. Proxy advisory firms like ISS and Glass Lewis have also scaled back their support for ESG resolutions, citing improved corporate disclosures and growing political backlash against ESG themes.
Large asset managers such as BlackRock and Vanguard have responded by adopting more client-directed voting policies to mitigate reputational risks within a politically polarized environment. As a result, the volume and average support levels for environmental and social shareholder resolutions have decreased significantly.
This waning support by major US asset managers has a critical impact on investor-led climate initiatives like NZAM and CA100+. These alliances depend on strong institutional investor backing and shareholder engagement to pressure companies into adopting more ambitious climate strategies. The decline in ESG shareholder resolutions reduces a critical mechanism by which investors send coordinated, high-quality signals to companies about the financial materiality of sustainability issues.
The smaller and lower-quality pool of ESG resolutions limits shareholder oversight and weakens the influence of these climate alliances on corporate behavior, potentially undermining progress toward net-zero targets and broader climate commitments.
However, not all is doom and gloom. A coalition of 26 asset owners representing some $1.2trn in assets issued a statement on stewardship alignment, highlighting their continued commitment to tackling climate change. Julien Halfon, head of Pension Solutions for BNP Paribas Asset Management, states that the manager has no intention of scaling back its climate ambitions.
Moreover, James Corah, head of Sustainability at UK manager CCLA, emphasizes CCLA's continued commitment to achieving net-zero emissions on listed equities by 2050. ShareAction's latest Voting Matters report suggests that many managers remain committed to tackling climate change, while others show a continuous track record of underperformance when it comes to climate stewardship.
The situation is complex, with challenges and opportunities coexisting. As the landscape continues to evolve, it is crucial for asset managers, investors, and climate alliances to collaborate and innovate to ensure that corporate accountability on climate and sustainability issues remains a priority.
[1] ShareAction (2025). Voting Matters 2025. [online] Available at: https://www.shareaction.org/publications/voting-matters-2025/ [Accessed 15 May 2025].
[2] Financial Times (2025). BlackRock and Vanguard retreat from blanket ESG mandates. [online] Available at: https://www.ft.com/content/7b6e91a3-8cdb-47b5-a7b2-2306b1e476e8 [Accessed 15 May 2025].
[3] Reuters (2025). SEC guidance allows companies more leeway to exclude ESG proposals from shareholder ballots. [online] Available at: https://www.reuters.com/business/us-sec-guidance-allows-companies-more-leeway-exclude-esg-proposals-shareholder-ballots-2025-02-01/ [Accessed 15 May 2025].
[4] Institutional Investor (2025). ESG Resolutions: A Decline in Support and Implications for Climate Alliances. [online] Available at: https://www.institutionalinvestor.com/article/b1f9vq15z8805w/esg-resolutions-a-decline-in-support-and-implications-for-climate-alliances [Accessed 15 May 2025].
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