Your pension fund votes on climate. You probably don't know how.

Somewhere in France, a teacher pays into her pension every month. She has never bought a share in her life. Yet her money owns a slice of one of Europe’s largest energy companies.

This spring, that company held its annual general meeting. Shareholders voted on its climate plan. Her pension fund was among them. It cast a vote on her behalf.

She will never know how it voted. She was never asked. She was never told.

This is not an oversight. It is how the system works. Individual savers own the capital, but the system is not built for them to use it.

The problem starts with a simple legal fact. When you invest through a pension, a fund or an insurance product, you do not legally own the shares. Your bank, broker or asset manager does.

In its study on Shareholder Engagement and Transition of Capital Flow, BETTER FINANCE called this the gap between two kinds of owners. There is the “beneficial owner,” the saver who puts up the money and carries the risk. And there is the “agency owner, the intermediary, who carries none of the risk but is recognised by the company as the real shareholder.

The EU has never agreed on a single definition of “shareholder,” which means the saver’s voice gets lost in a chain of middlemen.

The numbers show how hard that chain is to navigate. A 2022 study by BETTER FINANCE and the German investor association DSW found that 63% of European shareholders struggled with cross-border voting, usually blocked by complex intermediary chains, costs and poor service from their banks. The same share had to chase down meeting information themselves. And 64% paid high fees simply to attend and vote.

Publicly traded companies gather once a year for their annual general meeting (AGM). This is the time when all shareholders gather to vote on how the company is run.

In recent years, climate has entered the AGM agenda. A “Say on Climate“ resolution lets shareholders vote on a company’s plan to cut emissions and shift its business away from fossil fuels. These votes can steer a company’s spending, its targets and who sits on its board.

Sounds good, right?

Well, the door to vote on climate is closing. According to the 2025 European AGM Season Review, the number of “Say on Climate” resolutions put forward by European companies remained lower than in 2022.

This is the conversation individual savers are shut out of.

With transition plans diminishing among European companies, the question is: do savers actually care?

The evidence says yes.

In the study mentioned above, BETTER FINANCE surveyed 1,005 individual investors across France, Germany and Italy. When asked about climate proposals at AGMs, 59% said they would like the topic raised more often and explained in plainer terms.

And when investors said they would not back a company’s climate resolution, the reason was rarely indifference. On average, 59% pointed to a lack of evidence and credibility in the company’s own climate plans.

On average, 67% were familiar with the ideas of transition investing and transition plans. This shows that the appetite is there, but the doors for private investors seem closed most of the time.

Germany shows how locked the door can be. It is the only country in Europe where several large listed companies still hold their AGMs entirely online, with no option to attend in person. While the format is often defended as more convenient, the numbers suggest otherwise. In 2025, in-person AGMs at the largest German companies drew a turnout of just under 70%, around seven points higher than virtual-only meetings.

If savers can’t vote, who does? Their fund managers.

Asset managers and institutional investors hold vast sway. In one set of BETTER FINANCE interviews, just three firms managed around $15 trillion between them.

EU rules — the Shareholder Rights Directive, or SRD II — require these firms to publish an engagement policy and disclose how they vote. But the disclosure is thin. Reporting tends to count meetings held, without saying whether the engagement achieved anything, or how managers escalate when a company ignores them.

The managers themselves admit the system is clunky. Interviewed under conditions of anonymity, they pointed to cross-border voting blocked by local rules, problems with power of attorney, and a lack of clear options for escalation. One noted that voting policies covering only one type of fund limit the impact a manager can have.

The result is mirrored in the ballot. Support for environmental resolutions across European AGMs has fallen since 2021. In 2024, none of the environmental/climate resolutions at energy companies were approved.

The rules are being rewritten right now. The Commission’s Omnibus I package set out to cut the number of companies required to report sustainability information, part of a drive to reduce reporting burdens by at least a quarter. In October 2025, the European Parliament declined to send the package into final negotiations, a pause that BETTER FINANCE welcomed.

The worry is what gets lost. Simplification can be justified, BETTER FINANCE argues, but not at the cost of savers’ access to usable ESG data. Strip out too many companies, and the comparable information investors need to judge a transition plan disappears, just as savers are being urged to engage.

A parallel fix sits waiting: the review of SRD II. It could harmonise AGM rules, unblock cross-border voting and give savers a clearer way in

None of this is inevitable. BETTER FINANCE sets out a clear path:

• agree on a single EU definition of “shareholder”,

• ban closed-door AGMs and strip the structural barriers out of the investment chain,

• push companies to put transition plans and “Say on Climate” votes on the agenda, and

• require fund managers to tell the savers they serve not just how they voted, but why.

The shift to a low-carbon economy runs straight through capital markets. Those markets only work if the people whose money is at stake can take part.