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Aug 24, 2023

BlackRock lowers support for ESG-related proposals for third year running

Investment giant voted in favor of only 6.5 percent of climate-related proposals

BlackRock’s support for ESG-related shareholder proposals has fallen for the third year in a row as the investment management company rejigs its voting priorities.

A report on its latest voting results shows that, globally, BlackRock voted in favor of only 26 out of 399 environmental and social proposals. This is a significant drop from last year's annual report data which saw the investment giant voted in favor of 64 out of 325 ESG-related proposals and 84 out of 184 proposals in 2021.

BlackRock’s stance on ESG has been the subject of controversy over the years, with the firm receiving backlash over its ‘woke’ views, spearheaded by CEO Larry Fink.

Fink said in BlackRock’s 2023 annual shareholder letter that it’s up to governments to make policy and enact legislation and not for companies, including asset managers, to ‘be the environmental police. For years now, we have viewed climate risk as an investment risk. That’s still the case.’

‘Overly prescriptive proposals’

During the 2022-2023 proxy year, BlackRock voted at more than 18,000 shareholder meetings on more than 171,500 management and shareholder proposals across 69 markets.

The company says it voted on matters related to board quality and effectiveness – such as board independence and composition – and succession planning, but notably not often in relation to ESG. It also says it recorded a 34 percent increase in US shareholder proposals focusing on climate and natural capital risks, as well as company impacts on people.

‘We observed a greater number of overly prescriptive proposals or ones lacking economic merit,’ the report details. ‘Importantly, the majority of these proposals failed to recognize that companies are already meeting their asks.

‘Because so many proposals were over-reaching, lacking economic merit or simply redundant, they were unlikely to help promote long-term shareholder value and received less support from shareholders, including BlackRock, than in years past.’