Climate Change & Director Votes
How Major Asset Managers’ Index Funds Voted in 2025
The ongoing, multi-pronged assault on shareholder proposals has reaffirmed that director elections remain an important and durable strategy for mitigating systemic risks. Indeed, in his inflammatory October 2025 speech where he questioned the legality of precatory shareholder proposals under Delaware law, SEC Chairman Paul Atkins emphasized the need to “return [the] focus [of shareholder meetings] to voting on director elections.”¹³
Through director elections, investors define the standards of acceptable corporate governance and risk management. Votes against directors can be used to signal investor dissatisfaction with corporate strategy and performance with respect to system-level issues such as climate change, racial and gender equity, human capital management, and responsible technology use. In recent years, investors have successfully leveraged director voting to push companies to adopt wide-ranging reforms from adopting net-zero targets to diversifying their boards.¹⁴
For the 2025 proxy season, Majority Action recommended against the re-election of directors responsible for climate oversight at eight companies with poor climate performance spanning the electric utilities, oil and gas, banking, and insurance sectors.¹⁵ We assessed companies in these sectors against a set of widely accepted indicators including net-zero ambitions, emissions reduction targets, policy alignment, and capital investment in, financing, and underwriting of fossil fuels. Included in the universe of firms where we recommended director no-votes was Wells Fargo, which in March 2025 became the first major US bank to drop its net-zero goal for financed emissions and its medium-term financed emissions targets for carbon-intensive sectors.
DIRECTOR VOTES AT CLIMATE LAGGARD COMPANIES
Our analysis of how index equity funds voted in director elections at these eight companies reveals that European managers and managers of some mid-size and large funds are leading the way on board accountability.¹⁶ With the exception of UBS, managers of European funds voted on average for just 50-63% of directors responsible for climate oversight. Among managers of mid-sized funds, New York Life outperformed all funds on director accountability (38%), followed by other mid-sized funds managed by SEI (71%), Columbia Threadneedle, Voya, Franklin Templeton, and Empower (75%). Nuveen and State Street had the best voting performance among large managers (75%). Mega fund managers were far less critical of inadequate board oversight, supporting on average 88-100% of directors responsible for climate oversight.
The following charts highlight the significant disparities in proxy voting by index funds on directors at eight companies with poor climate performance across the electric utilities, oil and gas, banking, and insurance sectors, despite the fact that these funds share the same investment objectives (matching the benchmark return), use the same investment strategies (buy-and-hold), track similar broad-based indices, and have comparable exposure to system-level risks. These disparities map onto key differentiating characteristics such as asset manager, fund size, and where the fund is available for purchase.
