Pension funds in the UK have the lowest support levels for sustainability proposals, according to new research.
UK funds trailed their counterparts in Switzerland, Denmark, Germany, the Netherlands and Sweden when it came to backing environmental and social resolutions during last year’s proxy season.
The analysis was conducted by Rezonanz, a Swiss software company specialising in voting and engagement.
It contained input from a number of high-profile specialists including Lindsey Stewart, Morningstar’s head of stewardship, Ingo Speich, head of sustainability at Deka Investments and finance professor Rob Bauer.
The report assesses 122 pension funds across the six countries, to establish how transparent they are about their voting decisions, and how they voted in 2024.
“Among the sampled pension funds, the Netherlands emerges as a clear leader in disclosing formal voting policies,” the report noted, with 14 of the 20 funds making their policies public.
“Among the sampled pension funds, the Netherlands emerges as a clear leader in disclosing formal voting policies”
“This is near double the absolute number observed in markets like the UK and Denmark, where eight out of 22 and six out of 17 funds, respectively, offer such information.”
Less than 20% of funds in Switzerland and Sweden are transparent about their voting policies, but the greatest laggards were in Germany - where none of the 20 funds disclosed.
In total, 42 of the 122 schemes – mostly in Denmark, the Netherlands and Switzerland — were public about their individual voting decisions.
Based on voting data for 2024, the authors concluded that pension funds in the UK were the least supportive of environmental and social resolutions.
David Russell, chair of the academic-investor partnership the Transition Pathway Initiative, said in an interview for the report that size was a factor in the trend.
“In the UK, we have a problem with lots and lots of very small pension funds and there’s little resource for them to do anything,” said Russell, who used to be the head of responsible investment for one of Britain’s biggest pension funds, the Universities Superannuation Scheme.
“Better resourced funds have more time to do anything, and one of the things could be voting.”
Swedish funds were the most consistent backers of environmental and social proposals, according to the analysis, followed by the Dutch. Swiss pension funds sat in the middle of the scale, while the results for Danish funds were the most disparate. Only one German fund disclosed its voting record.
The report pointed out that there was no correlation between voting trends in each country and the presence of a national stewardship code.
The Netherlands has a stewardship code and shares the top spot for supporting resolutions with Sweden, which doesn’t have one.
Likewise, the UK is well-known for its stewardship code but its funds were the least likely to support resolutions, along with Germany, which has no code.
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