BlackRock backs fewer proposals on climate, social issues

BlackRock backs fewer proposals on climate, social issues
The fund company supported almost 7% of proposals in the 12 months ended in June, down from 22% in the year-earlier period.
AUG 24, 2023
By  Bloomberg

BlackRock Inc. backed fewer shareholder proposals on environmental and social issues over the past year as it stressed its commitment to the energy industry and navigated a debate over ESG investing.

The asset manager supported 26 of 399 — or almost 7% — of proposals related to climate change and social issues in the 12 months ended June 30, down from 22% in the same period a year earlier, BlackRock said in a report Wednesday. Many shareholder proposals have become “unduly prescriptive,” seek to “micromanage” executives and fail to acknowledge companies’ responses to climate change, including their disclosure of greenhouse-gas emissions, according to BlackRock.

“Because so many proposals were over-reaching, lacking economic merit or simply redundant, they were unlikely to help promote long-term shareholder value and received less support from shareholders, including BlackRock, than in years past,” Joud Abdel Majeid, global head of investment stewardship, said in the report. 

BlackRock, the world’s largest asset manager, is among the top five shareholders in the vast majority of S&P 500 companies.

The firm has faced intense scrutiny from U.S. investors and politicians in recent years because of the influence its senior managers, including Chief Executive Larry Fink, hold over public companies and for backing ESG-related investments. Republican officials have criticized the firm over the past two years for supporting sustainable investing — leading Fink to call the attacks “personal,” “ugly” and full of misconceptions. 

BlackRock has emphasized its role as one of the world’s largest investors in the energy industry, and last month named the CEO of Saudi Aramco to its board of directors.

The asset manager said in the report that shareholder proposals, many of which are of “poor quality,” amount to less than 1% of the more than 171,500 proposals voted on. Industry support for environmental and social proposals in the past year declined alongside BlackRock’s, with median shareholder support for US environmental and social shareholder proposals declining to 15% from 25%, according to the firm’s report.

BlackRock said it’s encouraged by increased corporate disclosure of climate-related risks since 2021. Of the 399 proposals BlackRock’s stewardship team voted on globally, the firm said more than 60% had already met the goals of the shareholder proposal. 

The firm has moved to allow its clients to cast their own votes at shareholder meetings, with pensions, endowments and institutional shareholders accounting for $586 billion of equity assets participating in BlackRock’s “voting choice” program.

Could impact investing be the answer to the ESG debate?

Latest News

Farther debuts AI investment proposal tool for advisors to win clients
Farther debuts AI investment proposal tool for advisors to win clients

"Im glad to see that from a regulatory perspective, we're going to get the ability to show we're responsible [...] we'll have a little bit more freedom to innovate," Farther co-founder Brad Genser told InvestmentNews.

Barred ex-Merrill Lynch advisor arrested in alleged $2.6M theft of former Miami Dolphin Pro Bowler
Barred ex-Merrill Lynch advisor arrested in alleged $2.6M theft of former Miami Dolphin Pro Bowler

Former advisor Isaiah Williams allegedly used the stolen funds from ex-Dolphins defensive safety Reshad Jones for numerous personal expenses, according to police and court records.

Are you optimally efficient?
Are you optimally efficient?

Taking a systematic approach to three key practice areas can help advisors gain confidence, get back time, and increase their opportunities.

Advisor moves: Father-son duo leaves Raymond James for LPL, RayJay adds Merrill Lynch alum in Florida
Advisor moves: Father-son duo leaves Raymond James for LPL, RayJay adds Merrill Lynch alum in Florida

Meanwhile, Osaic lures a high-net-worth advisor from Commonwealth in the Pacific Northwest.

Beacon Pointe adds six RIAs in two-month acquisition spree, boosting AUM by $2.7B
Beacon Pointe adds six RIAs in two-month acquisition spree, boosting AUM by $2.7B

The deals, which include its first stake in Ohio, push the national women-led firm up to $47 billion in assets.

SPONSORED How advisors can build for high-net-worth complexity

Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.