Four trends to watch for this 2025 proxy voting season

With a heritage in mutuality, Royal London Asset Management is a purpose-driven active investor. Our investment principles put our clients and stakeholders at the heart of what we do, guided by our mission to be responsible stewards of our clients’ capital.  

These commitments continue through our approach to voting. While our Voting Guidelines are our foundation, the final execution of votes is the result of a holistic assessment of research, data, companies’ individual circumstances and our engagement activities. The combination of rapidly developing global trends and an ever-changing political landscape is resulting in Environmental, Social and Governance (ESG) topics being scrutinised at an increasingly acute rate.  

As we approach proxy voting season, here is a preview of some of the updates to our voting approach for this year alongside the topics we believe will be in the spotlight this year. The topics below are not new, but are rapidly shifting in scope, momentum and complexity and we believe will be a key focus. As such, we have redefined how we plan to approach these through voting.  

The topics below are not new, but are rapidly shifting in scope, momentum and complexity and we believe will be a key focus. As such, we have redefined how we plan to approach these through voting.  

Trend 1: Climate  

While the world is navigating growing uncertainty in relation to climate policy, Royal London Asset Management’s commitment to addressing climate risk and driving best practice remains steadfast. Our proprietary Climate Transition Assessment (CTA) framework guides us in assessing whether the companies we invest in with the highest emissions are taking meaningful steps to align to net zero, find out more here.  

Over the years, the CTA’s implementation has produced a valuable supply of information, including direction of travel. This year where our assessment shows negative movement, or a company is classed as ‘not aligned’ towards a net zero pathway, we will escalate our concerns against the most relevant member of the Board.    

We are also supporters of the investor-led Transition Pathway Initiative (TPI), which constitutes a valuable tool in evaluating a company’s readiness for the climate transition. Beyond our highest emitters, we will also look to vote against the most relevant director at the bottom scoring companies according to TPI’s assessment. 

Trend 2: Biodiversity 

We recognise the risks that the deterioration of nature poses to businesses and financial systems. In 2025 we will focus on those companies operating in material and sensitive sectors as defined by the Task Force on Nature-Related Financial Disclosures (TNFD).  Where those companies are additionally operating in biologically sensitive areas, lack a biodiversity policy and have been involved in recent biodiversity-related controversies, we will look to escalate our vote against the relevant board member.   

Trend 3: Diversity 

 At Royal London Asset Management, diversity is deeply entrenched in our values and constitutes an important theme in our engagement plans. The executive order recently issued by the new US administration has led many companies to publicly roll back on their policies and initiatives.   

Our position is clear, we continue to view a diverse board and workforce as a positive and we expect companies to be aligned with that school of thought.   

Our position is clear, we continue to view a diverse board and workforce as a positive and we expect companies to be aligned with that school of thought. We will pay close attention to shifts in companies’ efforts in relation to diversity and if required use our voices through our votes.  Where companies have shifted away from their policies, we will consider voting against the applicable board member(s).  

Trend 4: Human rights 

We believe that companies have an important role to play in mitigating human rights risks and effectively navigating the interplay between business and human rights.  

The United Nation’s Universal Declaration of Human Rights (UDHR) represents an important framework aimed at promoting a better world. Focusing on what we consider to be high-risk sectors in our investments, we will look to vote against the relevant board members at companies where human rights policies are not aligned with the UDHR.  

Looking ahead

We remain committed to responsible investment. Over the course of the upcoming proxy voting season, we will closely monitor companies' adherence to our principles and actively use our influence to promote positive changes through our voting practices. Our dedication to these core values underscores our belief that ethical business practices are fundamental to long-term success. 

Our voting always aims to be pragmatic, reflective of local best practice and evolving market insights, and in the long-term interests of our clients. Alongside voting, our engagement, research, and advocacy also help to add value and meaning to our investment decisions. Engagements may not apply to any specific Royal London Asset Management fund or strategy, as each will have different investment objectives. Please check your prospectus for details on specific product objectives.

Learn more about our approach in our Voting Guidelines and actions in our latest Stewardship and Responsible Investment report.  

For professional investors only.  This material is not suitable for a retail audience. Capital at risk. This is a financial promotion and is not investment advice. Past performance is not a guide to future performance. The value of investments and any income from them may go down as well as up and is not guaranteed. Investors may not get back the amount invested. The views expressed are those of the author at the date of publication unless otherwise indicated, which are subject to change, and is not investment advice.