Sarasin & Partners among first to implement fully custom pass-through voting on State Street Investment Management ETF holdings

Sarasin & Partners has become one of the first asset managers to implement pass-through voting on State Street Investment Management ETF holdings, giving it direct control over how shares held through those passive vehicles are voted at company meetings. This represents an important first step towards expanding pass-through voting across a broader range of ETF providers as the market evolves.

Delivered via State Street Investment Management using Tumelo's ProxySphere platform, the initiative allows Sarasin & Partners to vote in line with its own stewardship policy rather than deferring to the passive manager's default position or an ISS policy, a capability few asset managers currently have.

The launch ensures Sarasin & Partners can apply the same stewardship and voting standards to passive holdings as it does across the rest of its portfolios. As voting power becomes increasingly concentrated in the hands of a small number of large managers, who together hold the largest stake in around 88% of S&P 500 companies and cast roughly a quarter of all AGM votes, the ability to apply a consistent stewardship approach is becoming increasingly important.

Sarasin & Partners takes an active approach to its own votes: in 2025, it voted against 25% of director elections, 27% of auditor-related resolutions and 42% of remuneration votes across the companies it held. By establishing the capability to apply its own stewardship policy to passive holdings, Sarasin & Partners can ensure its approach to active ownership remains consistent as the investment landscape evolves.

Concentrated voting power risks weakening corporate accountability if it is not matched by robust, independent stewardship. By demonstrating pass-through voting in practice, it hopes to encourage wider adoption across the industry and, in doing so, help underpin a more resilient and sustainable capital market.

Natasha Landell-Mills, Head of Stewardship at Sarasin & Partners, commented, “The shift towards passive investing is reshaping asset management. An often-neglected consequence is the dilution of voting power. As an early mover in adopting pass-through voting based on our own policy, we are seeing first-hand the opportunity this presents at a time of rising threats to shareholder rights. We want to remain active owners even where we implement passive solutions. It is our hope that more managers will take up this opportunity, ensuring index providers continue to facilitate the return of voting power to clients.”