BlackRock Reports Decrease in Support for Environmental and Social Shareholder Resolutions
In its recent report, leading asset management firm BlackRock has disclosed a decline in its support for shareholder resolutions related to environmental and social issues. The company cited a combination of corporate progress in these areas and poorly crafted proposals as the reasons behind its reduced support.
With an impressive $9.4 trillion under its management, BlackRock’s votes carry significant weight in contests held by companies worldwide, attracting close scrutiny of its practices. The firm revealed that it supported only 7% of the 399 shareholder proposals on environmental and social matters, marking a decrease from 22% in the previous cycle and 47% in the year prior.
BlackRock justified its diminishing support by highlighting that many of the measures proposed were either over-reaching, lacking economic merit, or duplicative, which made them detrimental to the long-term shareholder value. Consequently, such resolutions received less support from shareholders, including BlackRock, compared to previous years.
While BlackRock’s stance on directorship remained unchanged at 89% support, the report acknowledged the progress made by boards in reducing the number of directors serving on multiple companies. BlackRock also withheld its support from the management’s recommendation on the election of 849 directors due to concerns over directorship overlaps, marking a decrease of 150 compared to the previous year.
The rise in non-binding shareholder resolutions reflects the growing interest of shareholders in areas such as emissions reductions and workforce diversity, bolstered by the relaxed regulations on corporate ballot access in the United States.
Notably, BlackRock has faced criticism from conservative politicians in the U.S. who argue that the firm has placed excessive emphasis on sustainability issues, referencing its previous proxy votes. However, the report did not address whether such criticism had influenced this year’s voting decisions.
These developments come amidst data indicating a decline in investor support for a wide range of resolutions as companies increasingly find common ground with activist shareholders.
In conclusion, BlackRock’s annual stewardship report reveals a significant decrease in its support for environmental and social shareholder resolutions. The firm cited corporate progress and the poor crafting of proposals as the primary reasons behind its reduced backing. With shareholder interest in sustainability issues intensifying, the report also reflected a rise in non-binding resolutions. The implications of these voting trends and criticisms faced by BlackRock will undoubtedly shape future discussions about responsible investing and corporate governance.
