BlackRock underlined its efforts to give its clients more direct participation in corporate shareholder votes and its record of voting against shareholder proposals that focused on climate in its latest proxy voting report as it responds to sustained Republican scrutiny of investing based on ESG , or environmental, social, and governance.
The asset manager said it supported only a small minority of environment -related proposals in the 2023-24 proxy voting year, even though they made up the majority of shareholder proposals, increasing by 13% year on year.
“Consistent with last year, we found that most shareholder proposals on climate and natural capital issues (environmental), as well as company impacts on people (social), were overreaching, lacked economic merit, or sought outcomes that were unlikely to promote long-term shareholder value,” the report reads. “A significant percentage were focused on business risks that companies already had processes in place to address, making them redundant."
The asset manager’s investment stewardship program supported just 4% of environmental and social proposals, compared to 6.5% last year.
The decrease in support comes as Republicans probe financial companies and their environmental, social, and governance investing goals, alleging their efforts could be in violation of antitrust laws. Judiciary Committee Chairman Jim Jordan (R-OH) sent letters to over 130 U.S. companies, retirement systems, and government pension programs, requesting information on their interactions with green investor groups. In December 2023, Jordan subpoenaed BlackRock and State Street Global Advisors for documents related to ESG investing .
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The greatest proportion of proposals BlackRock supported this year addressed corporate governance matters, with the asset manager increasing its support for these proposals compared to last year. The proposals the company supported were ones that sought to enhance minority shareholders’ rights, for example.
In the report’s foreword, the company touted its efforts to allow its investor clients to vote directly on shareholder proposals rather than voting on their behalf. It said it has expanded its voting choice program for investors and made it available in its largest exchange-traded fund. The company has also taken additional steps to create a climate and decarbonization stewardship option for certain funds that have “explicit climate-related objectives.” The option has 83 funds with $150 billion in assets under management as of July.
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