Why UK pensions are demanding pass-through voting from managers

By Will Goodwin, Co-founder, Tumelo.

It was reported last week that the London Borough of Camden’s pension fund is considering dropping one of its US managers over poor performance and a lack of climate engagement – yet more evidence that UK Local Government Pension Schemes (LGPS) are becoming more assertive about stewardship.

Across the UK LGPS community, a quiet but powerful shift is underway — and it’s reshaping what stewardship looks like for institutional investors. For too long, investors in pooled funds — including some of the largest pension schemes in the UK — have faced a structural barrier: they’ve had no real say in how their votes are cast at the companies they own. That’s changing.

The rise of pass-through voting

Pass-through voting allows asset owners to apply their own votes — even when invested through pooled index funds. Instead of relying solely on an asset manager’s voting policy, schemes can implement their own and ensure their investment strategy is best reflected on issues like climate, executive pay, and governance reform. It’s a structural innovation that brings accountability and alignment to the heart of investment stewardship.

Asset owners can choose to:

• Implement their own voting policy

• Over-ride on individual proposals.

Camden has long been a pioneer in responsible investment. It was the first client of Legal & General to adopt a pass-through voting option developed by Tumelo. Now, across the UK, other LGPS funds are following suit, using their voting rights to push for stronger action on climate, governance and pay.

Together, they are reshaping what stewardship means for institutional investors.

LGPS funds leading by example

Few markets have embraced this transformation as quickly or effectively as the UK LGPS. Several large funds have already adopted pass-through voting, working with asset managers and technology providers to make it operationally seamless.

At LGPS Central, which oversees an £11bn-plus L&G mandate, the change has been described as transformative.

“Working with Tumelo has significantly improved our stewardship and governance processes. Pass-through voting empowers us to have a say in the voting decisions that influence the companies we steward,” the fund said.

“Tumelo’s technology enables this in a seamless, transparent and scalable way – strengthening our impact and democratising stewardship for pooled funds.”

This is not just administrative innovation. It is cultural. The ability to vote directly gives schemes new confidence and credibility when engaging with companies and managers alike. It enhances transparency – a core principle for LGPS funds that are accountable to beneficiaries and taxpayers.

Aligning stewardship with local priorities

For many LGPS funds, the drive towards pass-through voting is not just about governance efficiency. It is about investment principles.

At Southwark Council, the move was driven by a clear desire to align stewardship with the borough’s net-zero ambitions.

“Pass-through voting gives us a huge opportunity to make sure Southwark’s voice is heard on key issues that are important to us, such as our commitment to tackling the climate emergency,” said Clive Palfreyman, Strategic Director of Resources. “Previously, we were forced to accept the policies of fund managers when voting, but through Tumelo, L&G and BlackRock, we can now implement our own voting policies, giving us more influence when engaging with companies in our pooled funds.”

This illustrates the deeper shift at play: local accountability meeting global capital. LGPS investors, often deeply rooted in their communities, can now ensure that stewardship reflects their own principles — not just those of their asset managers.

Collaboration is key

Pass-through voting works because of collaboration. It is a finely tuned ecosystem that requires coordination between asset owners, managers and stewardship data partners – and when executed well, it proves that innovation and accountability can co-exist.

NILGOSC, for example, implemented pass-through voting through a partnership with L&G, Tumelo and Minerva Analytics. Chief Executive David Murphy said:

“We’re thankful to each of our three partners for working together to help implement an integrated pass-through voting solution. NILGOSC seeks to improve corporate behaviour and protect shareholder value by maintaining effective shareholder oversight – and we’re very pleased to implement our voting policy across more of our investments.”

Likewise, GMPF’s Chair, Gerald Cooney, highlighted the importance of this collaborative approach:

“It’s great to see Legal & General, Tumelo and PIRC working together to help us implement our voting policy across more of our investments,” he said. “Implementing our policies gives GMPF more influence and a stronger voice when we engage with portfolio companies.”

These partnerships are setting a global benchmark for what is possible when asset owners and managers work in sync to improve stewardship outcomes.

A competitive advantage for the UK

For fund managers selling into the UK – particularly in the passive space – this matters. Pass-through voting is no longer a “nice-to-have”; it is fast becoming an expectation.

UK LGPS funds are raising the bar and, with that, redefining what good stewardship looks like in pooled structures. The result: a new form of competitive differentiation built on transparency, accountability and alignment with client priorities. 

European managers eyeing the UK LGPS market will need to demonstrate not just strong performance but strong stewardship frameworks – and the ability to offer investors real influence.

In other words, those who enable pass-through voting will win. Those who do not risk being left behind.

The future of stewardship is customisation

The adoption of pass-through voting by the LGPS community signals the start of a global trend. Asset owners are no longer content to be passive participants. They want visibility, voice and verification.

Tumelo works alongside L&G, SSIM and other partners to make pass-through voting a reality for leading pension funds across the UK. Book a meeting to learn more.