9/17/2019
Wall Street Investment Giants Voting Against Key Climate Resolutions
The Guardian (09/17/19) Helmore, Edward
BlackRock Inc. (BLK) and Vanguard have voted overwhelmingly against the critical climate resolutions at energy companies, including ExxonMobil (XOM) and Duke Energy (DUK), according to a report by the Washington, D.C.-based Majority Action and the Climate Majority Project. Had the two asset management companies not scuttled these investor efforts, at least 16 climate-critical shareholder resolutions at S&P 500 companies would have received majority support in 2019, representing a major corporate shift on climate, the report alleges. Not using their proxy votes to back shareholders' resolutions means letting companies ditch responsibility—even as the climate crisis threatens their investors, their business models, and the globe, the group claims. "The climate crisis is well upon us, and leading investors are stepping up to press fossil-fuel-dependent companies to align their strategies to the goals of the Paris agreement but some of the largest U.S. investment companies are severely lagging," says Majority Action's Eli Kasargod-Staub. "Blackrock and Vanguard have been using their shareholder voting power to undermine, rather than support, investor action on climate, including opposing every one of the resolutions proposed by the $34 trillion Climate Action 100+ coalition, calling for significant board room reform in response to its failure to act on climate change," Kasargod-Staub says. In April, Blackrock published a report on climate-related risk and said, "Climate change is a risk investors can't ignore." Meanwhile, Vanguard issues an annual "investment stewardship" report delineating its commitment to sustainable investing. Although Blackrock and Vanguard may not be using their proxy power to foster change, there is evidence that some of their funds are moving toward investing under environmental, social, and governance protocols. Blackrock has premiered a variety of sustainable equity exchange-traded funds, and it offers clients direction to build portfolios focused on companies that are likely to offer returns on clean-energy investments. The total value of funds that have integrated ESG factors into their investment process has more than quadrupled since 2014, increasing to $485 billion as of April, according to data provider EPFR Global. Blackrock says that its environmental stewardship team engaged 250 companies last year regarding climate change and that singling out the use of proxy votes is misleading because it ignores the totality of the firm's engagement on the matter.
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