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Liberal-leaning US pension fund leaders and politicians have warned BlackRock and other big money managers against backing down on environmental, social and governance causes after support for shareholder proposals at annual general meetings plummeted.
New York auditor Brad Lander accused BlackRock, the world’s largest wealth manager, of engaging in a “misinformed and short-sighted war on ESG at the behest of special interests”.
His comments came after data released this week showed that BlackRock had voted in favor of just 7 percent of environmental and social-related proposals at the company’s annual general meetings in the 12 months to June.
The $9.4 trillion wealth manager has been a frequent target of attacks from US Republicans who have accused it of being too “woke,” and Chief Executive Larry Fink said earlier this year he stopped using the term ESG because he had become too divisive.
BlackRock denies that the criticism affected its voting results. Investor support for shareholder proposals has fallen across the board as a rule change in 2021 made it harder for companies to block their inclusion on ballots. However, the decline was particularly sharp at BlackRock.
Average support for environmental and social shareholder proposals has fallen to 15 percent so far this year, from 25 percent last year and 32 percent in 2021, according to Institutional Shareholder Services. BlackRock backed 47 percent of these proposals in 2021 and 22 percent in 2021 last year.
Illinois State Treasurer Michael Frerichs said: “We want to make sure they are committed to managing the risks, and we think it’s important that whoever we work with manages risk responsibly and doesn’t allow the political Pressure affects the services they provide.”
“We understand that there are years where there are lower quality proposals, but if this becomes a trend over a number of years then we are concerned,” added Frerichs.
Oregon State Treasurer Tobias Read did not comment directly on BlackRock’s latest data, but said he would emphasize “the importance of recognizing the risks that ESG issues are for all of our partners and the companies in which we operate.” that we invest”. According to the filings, Oregon invests hundreds of millions of dollars in BlackRock funds and has a direct interest in the asset manager.
Some institutional investors make their own voting decisions at shareholder meetings rather than delegating responsibility to fund managers. For example, the New York City and Massachusetts pension systems said they vote according to their own guidelines.
However, many give up responsibility. Asset management giants BlackRock, Vanguard and State Street collectively control 15 to 20 percent of many S&P 500 companies, giving them significant leverage over proxy voting outcomes.
“BlackRock has a responsibility to use its voices to send a clear and consistent message on the need to manage climate and human capital-related risks,” said New York City-based Lander, responsible for approximately $250 billion in investments. Dollar in five bond funds is responsible funds.
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BlackRock declined to comment on its relationships with New York City and other clients. But it said, “Our proxy voting decisions are made solely to further the financial interests of our clients.” For clients who want to play a more active role in proxy voting themselves, we also lead the industry with our Voting Choice initiative and offer them that option.”
The wealth manager said earlier in the week that its falling support for climate-related votes was in response to the proliferation of inappropriate proposals.
“Although BlackRock is getting all the attention, I don’t think they are alone,” said Amy Borrus, executive director of the Council of Institutional Investors, an industry group. “Many wealth managers report that they voted fewer green shareholder proposals this year than last year because they see too many detailed proposals.” . [or] overly prescriptive proposals.”
Source : www.ft.com