7/28/2022
BlackRock Backs Lower Percentage of Proxy Proposals
Barron's (07/28/22) Foster, Lauren
BlackRock (BLK) this week issued a report indicating it had supported 24% of environmental and social shareholder proposals in the U.S. this year, versus 43% last year. Lindsey Stewart, director of investment stewardship research at Morningstar (MORN), says the decline is unsurprising, as BlackRock declared in May that it was "likely to support proportionately fewer [shareholder resolutions] this proxy season than in 2021" because of an increase in the number of proposals perceived as inappropriately prescriptive. "The result coming out of BlackRock isn't terribly radical in the context of what's happened across the wider market," Stewart explains. "You've seen the average level of support drop from about one third into the high 20s in percentage terms from the 2021 proxy year up to the 2022 proxy year. BlackRock's actions seem to be in line with that." BlackRock says in its 2022 voting summary that it observed "a 133% increase in the number of environmental and social (E&S) shareholder proposals, many of them more prescriptive than in prior years." Saturna Capital President and CEO Jane Carten says BlackRock's disclosure "can't be extrapolated into an overall statement," adding, "the variables to consider don't remain constant from year to year, and BlackRock's own report notes that in real numbers, they voted for 10 fewer environmental and social proposals in the last year over the previous year." Meanwhile, As You Sow CEO Andrew Behar says "investors are disappointed to see BlackRock backpedal on their support for climate change shareholder proposals in 2022, claiming that they were too 'prescriptive.'" He continues that "these resolutions are the appropriate investor response to inadequate corporate action on carbon-emission reductions and lack of accurate scope 3 disclosure," which "align precisely" with BlackRock CEO Larry Fink's 2020 letter and statement that "climate risk is investment risk." Behar further argues, "In this time of increasing risk, global heat-waves, droughts, ice-shelf collapse, and climate refugees, BlackRock has shrunk from its leadership position." A BlackRock spokesman cited the foreword in a report by Sandy Boss, the firm's global head of investment stewardship. "In keeping with our investment convictions, our view continues to be that the best economic outcomes for our clients will come through an orderly energy transition by companies that recognizes the needs of their consumers and other key stakeholders," Boss writes. "In our work engaging with companies, and, where clients have tasked us with it, casting proxy votes, our work on climate-related issues remains unchanged in focusing on the material risks and opportunities that the energy transition poses."
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