Asset owner uptake of pass-through voting increases by 175%
A growing number of asset owners are adopting pass-through voting and are increasingly diverging from their managers, according to new data
This year’s AGM season was dominated by significant challenges. With the US Securities and Exchange Commission (SEC) introducing new restrictions on permissible shareholder resolutions, far fewer resolutions in the US made it onto the ballot, according to Morningstar’s Proxy Voting Database. Meanwhile, in the UK, BP announced a major U-turn on its net-zero strategy after the deadline for filing shareholder resolutions had passed, leaving investors with no say in the matter.
But despite these headwinds, 2025 has also marked a resurgence of proxy voting, according to stewardship services provider Tumelo, which reports a 175% increase in asset owners using pass-through voting compared to the 2024 AGM season.
Tumelo said that this year, during 90% of meetings, asset owners chose to diverge from their fund manager on at least one proposal, with the UK’s Local Government Pension Scheme (LGPS) in particular taking an increasingly proactive stance.
This £390bn scheme, which invests across 86 funds, has historically been constrained by the fact that its assets are often held in pooled funds. However, a number of LGPS funds, including Southwark, Northern Ireland’s NILGOSC and Bedfordshire, have adopted pass-through voting through Tumelo. The Bedfordshire arrangement in particular is crucial, as it is designed to be scaled up.
Bedfordshire councillor Doug McMurdo is also chair of the Local Authority Pension Fund Forum (LAPFF), a £350bn stewardship organisation for the LGPS. As part of the deal between Tumelo and Bedfordshire, LAPFF members receive automatic recommendations on voting decisions. LAPFF members using pooled Legal & General Investment Management (LGIM) funds can apply these recommendations automatically, and pass-through voting can also be expanded to other fund providers.
Edd Micklem, head of strategic partnerships at Tumelo, argues that this is indicative of a wider trend: “For years, pass-through voting was seen as experimental. This season, it moved firmly into the mainstream. More asset managers and owners used pass-through voting to ensure votes reflected the values of those whose capital is at risk.”
Globally, State Street Investment Management expanded its Voting Choice programme to eight Luxembourg SICAV funds, while US adoption increased by 63%.
Vanguard is gradually embracing the trend. It first offered a voting choice pilot in February 2023 and now reports that 58% of investors prefer funds offering voting choice.
BlackRock first offered some of its investors pass-through voting in 2021. The service has now been expanded to cover nearly half of its assets, including, most recently, Swiss-domiciled funds.
Bedfordshire Pension Fund adopts pass-through voting, opening the door for wider LAPFF rollout
