Asset Owners’ Tool of Choice for Manager Stewardship Alignment

The divide between how the largest US asset managers and their European asset owner clients approach investment stewardship—both in terms of approaches and priorities—has grown in recent years. It’s a conundrum that asset owners continue to wrestle with in 2026. 

The much-reduced presence of US asset managers on the latest signatory list for the Net Zero Asset Managers initiative well illustrates this. Political and regulatory hostility to all things “ESG” in the US—first in several states, and now within the White House—has undoubtedly risen over recent years.  

In turn, this has given US asset managers little room to accommodate the kind of ambitious goal-setting on climate-related stewardship that we saw earlier in the 2020s. 

Our latest research shows the scale of this issue. The research includes:

• A deep dive into the declining significance of E&S resolutions. 
• Key trends in voting support across US and European asset managers. 
• Insights into the support for management resolutions.

The chart below highlights the decline in average support for sustainability‑related shareholder resolutions. 

Over time, proposals have shifted toward more niche issues where investors are less likely to agree on what is financially material enough to support. As a result, the number of resolutions with meaningful support is getting smaller.

Average support for environmental and social resolutions at Morningstar US Large-Mid Cap index constituents

Source: Morningstar research. Data as of March 10, 2026. Note: Chart data shows unweighted average support for proxy years ended June 30.

We see sharp differences in levels of support between the very largest US managers, who face the most political scrutiny, and voters with a more intentional sustainability focus such as European institutional investors.

The chart shows that average support for environmental and social proposals at US large- and mid-cap companies by the “Big Three” index managers (BlackRock, State Street, and Vanguard) for these proposals, as well as the other top US 10 managers, has dropped into single-digit percentages over the last three proxy years. In contrast, average support by US sustainable funds and European asset managers remains considerably higher.

Zooming in on significant resolutions on sustainability—those with the support of at least 30% of independent shareholders—further illustrates the divide. (We’ll publish more findings on significant resolutions soon.)

Average support for US environmental and social resolutions with at least 30% independent shareholder support

Source: Morningstar research. Data as of March 10, 2026. Note: Chart data shows unweighted average support for proxy years ended June 30.

As the chart above shows, average market support for this subset of resolutions has changed relatively little over the last three proxy years, hovering around 40%. Meanwhile, average support for these proposals by the top 10 US asset managers has fallen by over a third from 31% to 20% over the same period. 

Sustainability-focused shareholders are clearly taking a different view. Over the same three-year period, average support by US sustainable funds was consistently above 70% for the same subset of resolutions, with European asset managers averaging above 90% support each year.

Proxy voting is only one aspect of stewardship, but it’s possibly the only one in which we can obtain objective information on key priorities over time. For that reason, asset owners are finding the gap in voting implementation increasingly difficult to ignore.

US asset managers have introduced new stewardship tools over time to help align stewardship implementation with client preferences. These include: 

• Proxy-voting choice: Allowing asset management clients to select third-party voting policies that best fit their own sustainability, governance, and ethical priorities; and
• Multi-track engagement: Delivering a climate and/or sustainability-focused stewardship approach to clients who opt-in, over and above the conventional governance and financial materiality-focused stewardship approach offered to all clients.

However, it seems that a number of asset owners prefer a longer-established solution: the segregated mandate, which by its nature allows the asset owner more direct control over stewardship policy and implementation than other solutions (short of managing assets directly in-house).

In a poll at the recent UKSIF Ownership Day—an asset-owner focused stewardship event I had the pleasure of participating in—50% of the audience indicated that segregated mandates were their preference for delivering proxy-voting alignment, as shown on the chart below. 

UKSIF Ownership Day poll on aligning asset owner and asset manager sustainability and governance objectives

Source: UKSIF. Data as of March 10, 2026. Note: Data based on 44 live audience responses.

However, it’s worth noting that over a third of poll respondents preferred the newer tools on offer. Overall, it looks like the wider range of available solutions has given asset owners a better range of options for ensuring alignment with their appointed asset managers on sustainability and governance matters. This is particularly the case for asset owners who are locked into pooled funds, which offer less direct control. 

But for many asset owners, it appears one of the older solutions remains the tool of choice.