Pension funds and other asset owners are far more likely to back shareholder-led resolutions than asset managers, according to new research that shows voting results at corporate annual meetings often fail to reflect investors’ objectives on climate, diversity and human rights.
Internationally, asset owners support proposals on sustainability-related issues at about a third higher rate than the managers they retain to handle some or all of their of their portfolios. Divergence in voting presents market and reputational risks for the asset owners, says the report from the proxy voting consultancy OxProx and Vancouver-based Kaivalya Research.
The trends extend to Canada, though the disconnect in voting intentions is less pronounced, the research shows.
The survey of 4.57 million votes among 464 investors in the United States, United Kingdom, Europe, Australia, New Zealand and Canada reveals consistent results, highlighting risks for owners of investments who may be supportive of more action on environmental, social and governance, or ESG, measures, said Dustyn Lanz, chief executive officer of OxProx. The organization is a spinoff of Oxford University Innovation that provides proxy voting benchmarking, analysis and other intelligence to institutional investors.
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“It’s a problem for owners because it can undermine their stewardship efforts. So if an asset owner such as a pension plan is touting their commitment to sustainability and stewardship, and if they’re working with an asset manager who’s voting against sustainability and the stewardship philosophy of the owners, then it raises questions about whether votes are being cast in clients’ and beneficiaries’ interests,” Mr. Lanz said.
“And it can negatively impact the asset owner’s influence in the market.”
Asset owners also include sovereign wealth funds, insurers, family offices and endowments.
The study shows the widest disparity between European and U.K. owners and U.S. managers, in some cases as wide as 68 percentage points. This has had real consequences, Mr. Lanz said, as three transatlantic relationships were severed in 2025. Denmark’s AkademikerPension terminated its mandate with State Street Global Advisors, and Dutch pension funds PFZW and PME ended their contracts with BlackRock, over disagreements on voting and engagement on climate-related concerns.
Some of the stark divide could be the result of a backlash against ESG in the U.S., at both state and federal levels, prompting a retreat among financial institutions and investment companies fearing loss of business and reprisals by governments.
The report shows the widest voting gaps globally between owners and managers show up in shareholder proposals related to supply chain ESG risks at 30.1 percentage points, social issues at 29 points, shareholder-led environmental proposals at 27 points and climate-related issues at 23 points.
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In Canada, owners vote in favour of social-theme resolutions at a rate of nearly 23 percentage points higher than asset managers. The gap on votes related to governance issues is 15 points, supply chain 14.5 points and environmental 7.6 points. The divergence is wider when comparing Canadian asset owners with U.S. managers.
Shannon Rohan, chief strategy officer with the Shareholder Association for Research and Education, or SHARE, said the survey results mirror her organization’s own findings. The misalignment can have an even more pronounced effect when large asset owners use external managers in some cases and conduct their own voting in others, she said. They may even be voting differently on the same ballot items.
The dichotomy leads to mixed signals on key issues such as climate change, human and labour rights, as well as diversity, equity and inclusion, Ms. Rohan said. “If the interpretation and the response to that are opposite, I think that beneficiaries are going to be worried about how these things are being managed by their pension funds.”
The problem partly reflects longer time horizons that asset owners have with their investments, said Jamie Bonham, head of responsible investing for NEI Investments. There has been pullback in support for shareholder resolutions among asset managers, but asset owners have also recognized how material ESG-related issues can be to their investments and have acted accordingly.
This issue is a long-standing one, though it has worsened with the ESG backlash, Mr. Bonham said. Before that, he said larger asset managers began to support ballot measures pushing sustainability, leading to positive results.
“But that has really been the exception rather than the norm over the last 20 years. That said, I think those same asset managers are probably more supportive of ESG proposals now than they were 10 years ago, but the growth of asset-owner support makes the gap look worse,” he said.