In the wake of the 2024 proxy season many commentators, myself included, have pointed to continued low support for ESG proposals from major asset managers like Vanguard, State Street, and BlackRock. In BlackRock’s case, many have viewed the past several proxy seasons as proof that the firm is backing away from ESG priorities. However, a recent article in Forbes argues that the numbers don’t tell the full story and that BlackRock’s recent voting record doesn’t signal an end to its support for ESG. The article states:
“the raw numbers do not tell the full picture. A closer look shows a record high number of ESG related proposals, the overwhelming majority of which were either redundant, overreaching, violated laws, or were anti-ESG.”
Additionally, the article quotes BlackRock’s 2024 Global Voting Spotlight which states:
“We still observed many poor-quality proposals come to a vote, particularly on proposals that attempted to address climate and natural capital or company impacts on people-related issues. Consistent with last year, we found the majority of proposals addressing these topics were overreaching, lacked economic merit, or sought outcomes that were unlikely to promote long-term shareholder value.”
In other words, BlackRock’s position on ESG hasn’t changed, but its support narrowed due to low-quality proposals diluting the pool of ESG proposals. It’s worth noting that BlackRock has backed away from the term “ESG” and now uses different nomenclature to describe its ESG approach. Ultimately the lack of support may reflect BlackRock’s view that ESG must support core business functions and promote value. This is where activists’ and investors’ priorities often diverge and may explain the low percentage of ESG proposals backed by the firm.
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