ESG+ Newsletter – 16 October 2025

Glass Lewis signals major shift in approach to proxy advice

On 15 October, Glass Lewis announced changes to its approach to issuing research to its institutional investor clients, arguably the most significant change to the proxy advisory industry in two decades. Over the next two years, Glass Lewis plans to end the provision of research and vote recommendations based on its house policy. Instead, clients will elect to follow some or all of different policy perspectives. The current proposed perspectives, which are still under development, are “management-aligned”, “governance fundamentals”, “active owner” and “sustainability”. In summary, from 2027, Glass Lewis clients will either vote in line with one of Glass Lewis’ “of-the-shelf” perspectives, or with their own custom policy.  ISS looks set to continue to provide reports and recommendations based on its benchmark policies. In announcing the change in practice, Glass Lewis’s CEO, Bob Mann, alluded to the political pressure being placed on proxy advisors, in addition to regional differences in the expectations of clients spurring demand for differentiated policies on voting.  

The change from Glass Lewis is likely to have a demonstrable impact on the stewardship and proxy voting landscape. Public companies may view the change as the removal of a potential headache that reduces the risk of dissent at AGMs, with the cohort of investors that use the house policy perhaps electing to follow a more “management friendly” perspective. Indeed, higher levels of fragmentation in investor views and voting tends to result in higher levels of support for management, but in a number of areas, such as overboarding and compensation, certain investor policies are stricter than those set out by proxy advisors, ensuring a level of uncertainty over eventual approaches to specific issues from the market generally. The evidence of how pronounced these risks are will become clearer in time, as investors previously reliant on Glass Lewis house recommendations take steps to develop their own customised policies on a range of governance issues, adopt one of Glass Lewis “off-the-shelf” perspective, or switch to the competition. In the meantime, there is merit in companies deepening their analysis of shareholder registers and continuing to develop direct channels of engagement with major shareholders, to ensure the evolution of approaches from investors do not cause any surprises over the next 12 to 18 months. 

US boards turn to experienced hires amid AI and tariff challenges

Corporate boards in the US are turning to seasoned directors as they face growing challenges from artificial intelligence (AI) and tariffs under the current administration, according to Spencer Stuart’s latest Board Index, cited by Reuters. These pressures have renewed the focus on experience, shifting attention away from the earlier drive for younger and more diverse directors. Incoming directors at S&P 500 companies averaged 59.1 years old this year, continuing a steady rise in recent years. Following the #MeToo and Black Lives Matter movements, many companies had reshaped their boards by appointing more women and minority directors. However, that momentum has slowed amid a broader backlash against diversity initiatives. Of the 374 new independent directors added in 2025, 38% were women, down from 42% in 2024 and 47% in 2020. Minority appointments also fell to 17%, compared with 26% last year. Overall board composition remains largely unchanged, with women now representing 35% of all S&P 500 directors and minorities 24%. 

The number of new independent director appointments also declined, from 406 in 2024 to 374 in 2025, as many boards that had expanded during the diversity push return to smaller sizes. While boards continue to seek specialised expertise to address issues such as AI disruption and shifting tariff policies, the move towards smaller, more experienced groups may reflect recognition of the benefits that compact boards bring to decision-making. In an increasingly complex environment, drawing on external advisers for specific matters may often prove more efficient than appointing a specialist director for every emerging issue. 

Ongoing EU–US tensions extend to global shipping emissions debate 

Bloomberg reports that the EU and the US are at odds over a proposal to cut global shipping emissions ahead of a key vote this week. The European Commission is urging nations to back a newly proposed UN framework at the International Maritime Organization (IMO) meeting, describing it as a “significant milestone”. Shipping remains a major polluter, with most vessels still operating on oil. The IMO proposal, first agreed in April, would require ships to gradually reduce greenhouse gas emissions relative to their energy use, with the goal of reaching net zero by mid-century. The Trump administration has criticised the plan, describing it as a carbon tax that could raise shipping costs by up to 10%, and warning it would penalise countries that support it. In a joint statement, Secretary of State, Marco Rubio, Energy Secretary, Chris Wright, and Transportation Secretary, Sean Duffy, said they would “levy remedies against nations that sponsor this European-led neo-colonial export of global climate regulations.” 

Pension Power: Long-term investors step up as Wall Street retreats on climate 

While many financial institutions have retreated from climate commitments, long-term investors such as pension funds and insurers within the Net-Zero Asset Owner Alliance (NZAOA) remain steadfast, according to the Financial Times. With $9.2 trillion in assets, the NZAOA has maintained stability even as other net-zero alliances falter. Its members face fewer legal and fiduciary conflicts and are focusing on long-term climate and systemic risks that could affect future beneficiaries. Increasingly, large asset owners are adopting “universal ownership” principles, using their influence to press asset managers and companies to align with sustainability goals — signalling a new phase of investor-led climate leadership. 

California delays further climate rulemaking   

According to ESG Today, the California Air Resources Board (CARB) announced it will delay the release of its initial regulatory proposal for the state’s new climate reporting requirements from October 2025 to the first quarter of 2026. The agency has cited the large volume of public feedback and the need for further stakeholder engagement in defining covered entities. While the postponement provides additional time for preparation, companies are encouraged to continue building internal systems and processes ahead of the upcoming reporting deadlines. This delay highlights a broader national trend with US state regulators moving carefully and steadily toward more standardized mandatory climate disclosures across jurisdictions, and in difference with US federal sentiment.   

ICYMI 

• The US Bureau of Land Management has postponed a scheduled coal lease sale in Wyoming, covering 3,508 acres with an estimated 365 million tons of recoverable coal according to ESG News. This decision follows a disappointing auction in Montana, where only one bid was received at less than $0.01 per ton. 
• ESG Dive has highlighted that the expiration of federal EV tax credits has led to a slowdown in US EV sales. Projections now estimating EVs will comprise 8.5% of the market by the end of 2025, down from an initial forecast of 10%. 
• Reuters reported that the global renewable energy capacity reached a record 582 gigawatts in 2024, marking a 15.1% increase year-on-year. However, this growth falls short of the 16.6% annual increase needed to meet the UN’s goal of tripling capacity by 2030.