(Bloomberg) — BlackRock Inc. has reduced its support for shareholder proposals on environmental and social issues for a third straight year, arguing that many of the proposals are meritless, do little to improve the company and undermine its long-term financial interests.
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BlackRock, the world's largest asset manager, supported 4% of 493 proposals in the 12 months ending in June, the New York-based bank said in a report released Wednesday, down from 7% a year ago and more than 20% for the same period through mid-2022.
The firm said in January that its stewardship team was focused on a company's financial health, and stepped up its support for resolutions on corporate governance — the “G” in ESG investing. BlackRock supported 21% of such proposals in the period, up from 11% a year earlier, according to the report.
BlackRock said shareholder proposals have faced significant opposition because they are generally “poor quality or unrelated to how companies can create long-term value for shareholders.”
Regardless of the details, BlackRock said many of the proposals have been submitted by advocacy groups targeting U.S. companies.
“Investors felt that most of these proposals were overly prescriptive, lacked economic merit and asked companies to address significant risks that they already managed,” Jude Abdel Majeed, global head of investment management, said in the report, referring to social and environmental proposals.
BlackRock, which managed $10.6 trillion in assets as of mid-year, is a top-five shareholder in most S&P 500 companies and has come under intense scrutiny from U.S. investors and politicians for how it votes and engages with companies on key ESG issues. Overall, the firm supported corporate management on about 88% of proposals globally.
Republicans have harshly criticized BlackRock for its promotion of ESG and sustainable investments, accusing it of harming the economies of energy-rich states such as Texas and West Virginia. In response to this backlash, some state pension funds and financial authorities, as well as the Texas public school fund, have withdrawn their investments from the company.
BlackRock has long maintained that it is not boycotting fossil fuels, and the company said earlier this year that it manages more than $300 billion in energy investments around the world.
Asset managers across the industry have reduced their support for environmental and social resolutions over the past year, including those driven by anti-ESG campaigns: Average support for these resolutions fell to 16% at the most recent shareholder meeting from 19% a year earlier, according to Morningstar.
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