Many prominent American investment firms have, of late, been blurring the line between sound financial management and political activism. Serving the ESG impulse, asset managers and shareholder advisory firms have been advancing agendas at corporate annual meetings that had more to do with fighting climate change and population growth than maximizing returns on investment.
That’s bad for investors, big and small.
Fortunately, according to the 2025 edition of Unleash Prosperity’s “Putting Politics Over Pensions” report, things are starting to trend back in the right direction. After years of virtue signaling and sucking up to left-wing political leaders, these firms, which are among the world’s largest, have refreshingly rediscovered the concept of old-fashioned fiduciary responsibility.
The numbers tell the story. From 2022 to 2024, opposition to ESG measures increased from 45 percent to 71 percent among the 20 largest U.S. investment firms. In the 2025 proxy season, Vanguard opposed every politically charged shareholder resolution across its non-ESG funds, supporting zero so-called “woke” proposals. BlackRock, long seen as the principal ESG evangelist thanks to its outspoken CEO Larry Fink, pulled back dramatically as well, supporting fewer than 2 percent of environmental and social resolutions.
The Unleash Prosperity report recognizes that progress has been made. BlackRock has jumped from a grade of “C” to an “A” in fiduciary performance over the past few years, and its competitor State Street also climbed two grades.
More important than the grades is what they represent: the re-emergence of financial stewardship that puts the interests of investors, especially retirees who let others manage their money, before anything else.
As an investment strategy, ESG once seemed here to stay. The so-called “sustainable” investment funds, showered with fawning media coverage, attracted hundreds of billions in assets. Now, reality has caught up. Investors pulled $19 billion out of ESG-branded funds last year, a trend that continued advancing through 2025.
The reason is simple: returns matter. Shareholders grew tired of watching asset managers prioritize activism over performance, and pension funds are especially vulnerable when politics outweighs prudence.
The 2025 proxy season saw just 224 environmental or social shareholder resolutions introduced in the United States. In 2024, it was 400. Support for left-leaning proposals plummeted to 19 percent, down from 33 percent in 2021. Even among firms once synonymous with ESG leadership, enthusiasm for ideological voting is evaporating. As the report notes, “Investors don’t want money managers steering their capital in the direction of political ideology. The objective instead is remaining faithful to their fiduciary responsibility to provide clients with the highest returns.”
That’s not politics — it’s common sense. ESG and DEI mandates sound good if you don’t think too hard about them. Generally, though, they saddle companies with unnecessary compliance costs, regulatory risk and reputational landmines. By trying to score political points, firms expose small investors to volatility and distraction.
Many ESG strategies penalize productive sectors like energy while rewarding companies for symbolic gestures. The result: less capital efficiency, lower returns, and greater instability. By stepping back and refocusing on financial fundamentals, asset managers are restoring balance, prioritizing performance over posturing, and protecting the long-term interests of pensioners.
There is still work to be done. The proxy advisory duopoly Institutional Shareholder Services and Glass Lewis still wield enormous influence over corporate voting. These firms, both openly progressive in orientation, routinely push companies toward ESG-aligned proposals that frequently do not align with shareholder value. Their dominance has not gone unnoticed. The Federal Trade Commission has been urged to open antitrust investigations of both firms, particularly their advocacy of so-called hot-button social and climate resolutions.
The scrutiny is overdue. As the Unleash Prosperity report warns, “It is investors and company retirees who pay the price when ESG mandates drag down corporate performance and when higher fees burden returns.”
The quiet retreat from ESG and DEI activism is more than a shift in corporate trendlines. It’s a course correction and a return to disciplined, fiduciary-based stewardship. Pensioners deserve investment managers focused on growing their savings — not advancing political movements. If the trend continues, 2025 could mark the start of a new era in American finance, one in which ideological litmus tests give way to financial fundamentals and fiduciary duty once again stands as the guiding principle of asset management and responsible investing.
