Most U.S. Public Pensions Fail to Manage Climate Risks Through Proxy Voting

New Sierra Club report finds gaps in proxy voting practices at 33 of the largest public pension funds

Apr. 9, 2026 at 7:00am

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A minimalist illustration using bold geometric shapes in primary colors to conceptually represent public pensions managing climate-related financial risks through proxy voting.Public pensions must leverage their proxy voting power to drive corporate climate action and protect retirement savings.Los Angeles Today

A new report from the Sierra Club evaluates the proxy voting practices of 33 of the largest public pension funds in the U.S. and finds that most are failing to adequately manage the climate-related financial risks to their investments through proxy voting, putting the retirement security of millions of public-sector workers at risk.

Why it matters

As political and regulatory headwinds led to fewer climate-related shareholder proposals reaching the ballot in 2025, proxy voting on director accountability has become an increasingly important tool for public pensions to push companies toward credible, science-based climate transition plans. However, the report finds that most pensions are still underutilizing this lever.

The details

The Sierra Club's third-annual report, 'The Hidden Risk in State Pensions: Analyzing U.S. Public Pensions' Responses to the Climate Crisis in Proxy Voting', analyzed the proxy voting guidelines, 2025 proxy voting records, and voting transparency of 33 of the largest and most influential public pension funds in the U.S. The report found that even as fewer climate-related shareholder proposals reached the ballot, the risks to pension portfolios have not changed, and pensions must escalate their use of director accountability votes to drive corporate climate action.

  • The report was published on April 9, 2026.
  • The analysis covers proxy voting records from 2025.

The players

Sierra Club

An environmental organization that published the report evaluating public pension funds' proxy voting practices.

Allie Lindstrom

Senior Strategist, Sustainable Finance Campaign at the Sierra Club.

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What they’re saying

“Even as political and regulatory headwinds led to fewer climate-related shareholder proposals reaching the ballot in 2025, the risks to pension portfolios have not changed. As proposals decline, director votes are becoming an increasingly important, but still underutilized, tool for maintaining support for corporate climate action. We urge public pensions to escalate their use of director accountability to push companies toward credible, science-based transition plans.”

— Allie Lindstrom, Senior Strategist, Sustainable Finance Campaign

What’s next

The report calls on U.S. public pensions to update their proxy voting guidelines to reflect evolving best practices, including requiring corporations to reduce real-world emissions over increased climate disclosures; strengthen their policies on board of director accountability on climate; strengthen their policies on biodiversity, human rights, Indigenous rights, just transition, and environmental justice; and add explicit language to protect beneficiaries' savings from climate-related risks.

The takeaway

This report highlights the critical role public pensions can play in driving corporate climate action through their proxy voting practices. As shareholder proposals decline, pensions must leverage director accountability votes to push companies toward credible climate transition plans and protect the long-term value of their investments.