Between 1985 and 2014 observations show an expansion of Southern Ocean sea ice. This phenomena is not simulated in CMIP6 Atmosphere-Ocean General Circulation Model (AOGCM) simulations, nor in a large ensemble of HadGEM3-GC3.1-LL simulations. Here we quantify the impact of this discrepancy on radiative feedback and global temperature trends. We find that both satellite reconstructions of the Earth’s energy budget and atmosphere-only GCM simulations forced with observed SST and sea-ice trends support the idea that the expansion of sea-ice led to a negative surface albedo feedback over the Southern Ocean. In contrast, the decline of sea-ice in AOGCMs gives rise to a positive feedback. We estimate that, had the AOGCMs warmed with the observed Southern Ocean sea-ice evolution, their global feedback parameter would be less positive, by 0.15 to 0.36 Wm−2K−1, and their global temperature trends reduced by 0.072 to 0.02 K per decade over this period.