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Support for shareholder proposals on environmental and social issues plummeted for the second year in a row as BlackRock refused to support resolutions it deemed too didactic or pointless.
The world’s largest asset manager voted in favor of just 26 such proposals globally at companies’ annual general meetings in the 12 months to June, about 7% of the total.
This was a significant decrease compared to last year, when 22% globally supported it, and the 2021 proxy season, when 47% voted yes.
The skepticism comes as the $9.4 trillion asset manager battles sustained attacks from the US Republican Party for being “too woke.” Earlier this year, the company’s CEO Larry Fink said it had stopped using the acronym ESG, an umbrella term for such proposals. Because it has been “weaponized” by politicians on both the right and the left.
But BlackRock’s withdrawal coincides with a surge in ESG shareholder proposals made possible by a change in Securities and Exchange Commission policy, meaning it’s becoming harder for companies to block proposals. .
A record 340 ESG proposals have already been voted on in the US this year, up from 300 in all of 2022, according to proxy voting group Institutional Shareholder Services.
In a report on its voting record released Wednesday, BlackRock said support had declined because “so many shareholder proposals went too far, lacked economic merit, or were simply redundant.” Ta.
For example, BlackRock voted in 2022 to require Amazon to report on its use of plastic packaging. But this year, it voted against a similar proposal, saying e-commerce groups were starting to disclose information.
Other shareholders have followed suit, with plastic packaging proposals receiving less than a third of shareholder support this year, compared to nearly half in 2022.
Indeed, BlackRock argued that the decline in support for ESG proposals reflects broader investor backlash. Median support for these resolutions fell from 25% in 2022 and 32% in 2021 to 15% in 2023, according to data from BlackRock and ISS.
However, the decline was less pronounced, although rival State Street also refused to support many proposals. The Boston-based asset manager uses a different timeline to publish its voting record, but support for ESG resolutions in the first half of this year was 32%, compared to 44% in the same period in 2022. , down from 49% in 2021.
State Street also cited SEC policy changes as a factor in the decline.
Along with Vanguard, BlackRock and State Street control 15 to 20 percent of America’s largest public companies with their huge index trackers and investment funds.
Vanguard has not yet released numbers for 2023 proxy voting and declined to comment.
Asset managers and corporations have come under attack from Republicans, leading them to distance themselves from corporate social responsibility. Last year, several Republican state attorneys general demanded details of BlackRock’s voting policies, saying they hurt the oil and gas industry.
BlackRock said in its voting report that ExxonMobil and other oil companies this year declined to support shareholder proposals seeking reports on various projects and decommissioning plans.
BlackRock’s numbers do not include support for 30 resolutions proposed by company executives calling for disclosure of climate information, known as “climate speaking” reports.
BlackRock said it voted against climate change resolutions when they were proposed by shareholders and opposed by management.
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