BlackRock gives anti-ESG investors a proxy voting option

BlackRock gives anti-ESG investors a proxy voting option
A policy from a proxy advisor new to BlackRock's voting choice program opposes "stakeholder capitalism" proposals.
JUN 11, 2024

BlackRock has added an “anti-ESG” option for big clients who want to vote against environmental, social, or governance ballot issues at annual meetings for the companies in their portfolios.

Today, BlackRock announced two voting options from proxy advisory firm Egan-Jones, including a “wealth-focused policy” that opposes “stakeholder capitalism” proposals. That includes policies that seek to promote diversity, equity, and inclusion as well as environmental initiatives like measuring, reporting, and reducing greenhouse gas emissions. However, the policy provides exceptions for ESG proposals that are “directly tailored to revenue generation.”

Those options will be available for institutional clients beginning next year, though the company could later extend them to retail clients as well. BlackRock’s Voting Choice option, which started in 2022, has been used by clients representing $600 billion of about $2 trillion in assets eligible for the program, according to the firm. Earlier this year, BlackRock rolled out proxy voting choice to its biggest ETF, the $454.5 billion iShares Core S&P 500 ETF, representing the first time the option has been available to retail investors.

“We continue to innovate and provide more choice to our clients who wish to take a more direct role in the proxy voting process,” BlackRock investment stewardship global head Joud Abdel Majeid said in the company’s announcement. “We’re pleased to add a third proxy advisor to our platform and the option for more clients to customize their voting guidelines to reflect their specific goals and objectives.”

With the Egan-Jones proxy advisor addition, institutional clients will have 16 proxy voting choices among three proxy advisors, not counting BlackRock’s own policy that lets the firm decide how shares are voted.

The additions give investors more choices, the firm said, though the new policies have come after BlackRock has for years been the main target of anti-ESG campaigns at state and federal levels. While the company has been accused by the political right of being a liberal ESG promoter, it is also one of the biggest investors in the fossil fuel industry and has been criticized by environmental groups and sustainable investors for that.

The name of wealth-focused proxy voting policy “is misguided at best,” said Andy Behar, CEO of As You Sow, citing ESG initiatives as being the financial interests of companies and shareholders.

“It just runs counter to the data on actual wealth creation,” he said. “The idea of voting against diversity on the [corporate] board, voting against climate transition plans, voting against justice at the companies – it doesn’t allow companies to create a culture that attracts the best and the brightest.”

Latest News

The hidden currency risk in global investing: what advisors need to know
The hidden currency risk in global investing: what advisors need to know

For those seeking international exposure amid economic uncertainty, understanding the impact of the US dollar's strength over other currencies is more important than ever.

CFP Board warns of tax "tipping point" as TCJA expiration puts financial plans at risk
CFP Board warns of tax "tipping point" as TCJA expiration puts financial plans at risk

With nearly nine in 10 seeing danger to clients' retirement income and legacy plans, among others, CFP professionals are urging strategic planning pivots and tax perks for advice-seekers.

Fed Day focus fades as Trump keeps stock markets watching
Fed Day focus fades as Trump keeps stock markets watching

As policymakers convene for their latest two-day meeting, investors are shifting their attention from elevated interest rates to growth concerns and tariff worries.

IRS eases off on some audits with retrenchments giving way to AI
IRS eases off on some audits with retrenchments giving way to AI

While he hasn't laid out a clear plan, Treasury Secretary Scott Bessent has gone on record touting "the great AI revolution" in improving the agency's tax collections and customer service.

More than three-quarters of advisors to embrace fee models by 2026, Cerulli says
More than three-quarters of advisors to embrace fee models by 2026, Cerulli says

Momentum continues for fee-based compensation as BD advisors ditch commissions and alternative compensation schemes emerge to lure diverse clientele.

SPONSORED Beyond the all-in-one: Why specialization is key in wealth tech

In an industry of broad solutions, firms like intelliflo prove 'you just need tools that play well together'

SPONSORED Record growth: Interval funds emerge as key players in alternative investments

Blue Vault Alts Summit highlights the role of liquidity-focused funds in reshaping advisor strategies