Politics over pensions: An ESG report card for proxy voting

Unleashing Prosperity (UP) recently released a timely report, “Putting Politics Over Pensions: The 2025 Unleash Prosperity Report Card on Investment Fund Managers and Proxy Voting Behavior.” This paper updates UP’s annual scorecard ranking investment advisers’ proxy vote decisions. These reports have been prepared by prominent economists Stephen Moore and Jerry Bowyer, who also his own proxy advisory service called Bowyer Research. The latest report provides scores that rank an investment firm’s track record on environmental, social, and governance (ESG) issues.

UP’s report examines the voting decisions of 275 investment advisers across a sample of 50 of the most extreme ESG resolutions. These resolutions are regularly presented by activist shareholders at annual board meetings and cover a range of politically charged matters. These include mandatory climate disclosures, board diversity quotas, requirements that boards assess climate change risks, and fossil fuel divestment requirements.

UP provides a detailed system for assessing how well investment advisers uphold their fiduciary responsibilities during proxy voting. These firms are required under federal law to abide by a set of duties when rendering voting decisions on behalf of their clients. In essence, they are legally prohibited from pursuing investment pathways that deviate from wealth maximization. Yet most of these institutional investors have discovered ways to circumvent their fiduciary obligations, however, by delegating their responsibilities to proxy advisory firms.

The two dominant proxy firms are Glass Lewis and Institutional Shareholder Services (ISS), which effectively drive 97 percent of the market for proxy voting consultations. While UP acknowledges the powerful influence wielded by Glass Lewis and ISS in recommending support for ESG matters, the report ultimately focuses on the investment advisers themselves when ranking ESG support.

Based on the methodology, investment advisers are given scores that reflect the trajectory of their proxy votes relative to controversial ESG matters. These top 50 resolutions are referred to as “the Anti-Fiduciary 50,” and the authors attributed a set of points to each adviser based on their support of ESG relative to their adherence to their fiduciary responsibilities.

Moore treats each investment adviser as representative of the non-ESG fund families it oversees. In terms of the ESG scorecard, points are allocated based on the underlying fund family. Each fund or class of funds contains a set of investments (i.e., mutual funds, exchange-traded funds, corporate stocks) tethered to individual investors.

For the paper’s ranking system, points were allocated to funds based on the level of support their investment firms have for their fiduciary duties. This means that investment firms voting against ESG resolutions in the Anti-Fiduciary 50 are awarded 10 points, abstention or split votes with partial support of ESG gain 5 points, and votes in support of ESG receive zero points.

 “A fund family’s score reflects the sum of points scored compared to the maximum points possible had the firm adhered to their strict fiduciary duty to investors and voted against each of these shareholder proposals,” according to the report. “The lower the score, the greater the alignment with ESG activism – and departure from strict adherence to fiduciary duty.”

When looking at the results, the most actively voting investment advisers with the lowest scores were Nationwide Funds (D), Gotham Funds (D), Pimco Funds (F), AllSpring Funds (F), and DWS Funds (F-). These were asset-managed funds that voted near unanimously for controversial ESG resolutions. By contrast, the asset management funds that voted most in line with their fiduciary responsibilities were BlackRock Funds (A), Vanguard Funds (A), T Rowe Price Funds (A), JP Morgan Funds (A), and Federated Hermes Funds (A).

Thus, the most responsible, ESG-opposed asset managers tended to be the largest, most financially prominent firms. Several of these entities — BlackRock, JP Morgan, T Rowe Price, and Vanguard — are consistently ranked among the largest asset managers in America by the value of their assets. This presents a somewhat surprising trend away from the norm in 2020-2024, where many of the largest US asset managers often led the way in supporting extreme ESG positions. By contrast, large European asset managers continue to maintain high levels of support for major ESG resolutions, landing in the 90 percentiles since 2021.

According to the UP report, “The good news is that investment firms are gradually moving away from supporting ESG/DEI initiatives being pursued by left-wing pressure groups and shareholder activists. In 2024, private sector, non-ESG branded funds were 20 percent less likely to support extreme shareholder proposals than they were in 2023.”

UP’s report aligns with 2022 data among the big four asset managers and more recent findings on asset managers reducing their support for ESG shareholder proposals. In contrast with last year’s UP report, the largest asset managers have clung more firmly to their fiduciary obligations when voting their proxies. As a result, several of the biggest funds that received ‘B’ scores in 2024 were elevated to ‘A’ scores in 2025.

UP’s latest report  provides some promising findings regarding the state of asset management in America. While it is unclear how investment advisers are voting on every ESG issue under the sun, UP’s report shows that, when it comes to the most radical ESG matters, support appears to be waning. Many asset managers appear to be changing their tune on controversial ESG initiatives raised by activist shareholders.

Within this trend, firms like BlackRock permit their investors to vote directly on shareholder proposals, as opposed to relying on BlackRock or one of the big two proxy advisory firms to vote for them. This report provides much needed transparency on the state of ESG proxy voting and where investment advisers of all sizes stand regarding their fiduciary obligations.