BlackRock has cooled on its pledge to force the firms it invests in to improve on environmental and social issues, voting for just 24% of them.
The group had previously supported 46% of proposals in last year’s annual meeting season.
BlackRock had warned of the turning tide in May when it argued that shareholder proposals were becoming too prescriptive and that Russia’s invasion of Ukraine had changed the investment calculus.
“Many climate-related shareholder proposals sought to dictate the pace of companies’ energy transition plans with little regard to the disruption caused to their financial performance, given continued demand from consumers. Others failed to recognise the progress made,” BlackRock said in a report on its voting released on Tuesday. “These factors made these proposals less supportable.”
BlackRock’s shift has been far more dramatic than most other investors. Total shareholder support for environmental and social proposals dropped from 36% of votes cast in last year’s meeting season to 27% this year, according to ISS data. At BlackRock the decline was from 43% to 24%.
Support for environmental and social proposals from State Street Global Advisors, another very large asset manager, fell from above 25% last year to roughly 20% this year. A separate analysis of Esgauge data by the Conference Board found that investor support on environmental proposals in particular fell from 37% in 2021 to 33% this year.
BlackRock, which manages $8.5tn, said it continued to hold companies accountable on issues that affected investors’ long-term returns. “We haven’t changed. The context is changing around us,” the asset manager said.
