BlackRock backed fewer climate-related shareholder proposals this year.
In a report released on July 26, the asset manager said it voted in favor of 24% of shareholder environmental and social proposals during this year’s proxy voting season, down from 43% last year. ‘last year. The company said the decline was partly due to a crop of “more prescriptive” shareholder proposals.
Some of the proposals, BlackRock said, sought to “dictate the pace of companies’ energy transition plans without considering the disruption caused to their financial performance, given continued customer demand.” In a memo in May, the company signaled it would support fewer such proposals this year, saying it would vote against those “intended to micromanage companies.”
BlackRock, the world’s largest investor, with about $8.5 trillion in assets under management, has stakes in more than 14,000 companies worldwide. The amount of capital the firm manages for its passive investors has more than tripled over the past decade to $4.6 trillion. The Company’s investment management team votes on behalf of the majority of these passive shareholders.
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The company’s previous support for climate-related proposals has upset corporate executives, particularly those in the oil and gas industry. CEO Larry Fink has said the company views climate risk as an investment risk.
“We focus on sustainability not because we are environmentalists, but because we are capitalists and fiduciaries of our clients,” Fink wrote earlier this year in his annual letter to the CEOs of companies in which BlackRock invests.
In the report, BlackRock said there was an overall increase in the number of environmental and social shareholder proposals this year, which contributed to the decline in the number of proposals the company supported. Support for environmental and social shareholder proposals among all investors in US companies fell to 27% this year from 36% in 2021, BlackRock said.
Some of the most prescriptive proposals this year revolved around Scope 3 emissions reduction targets, BlackRock said in the report. Scope 3 emissions rules, which relate to a company’s activities but are outside of its operational control, have drawn criticism from some researchers, who have said it is difficult to collect reliable data on indirect emissions .
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BlackRock said governments need to create a fair and consistent reporting framework around Scope 3 emissions targets.
The firm last year voted in favor of a shareholder proposal that required oil and gas giant ConocoPhillips to set Scope 3 emissions reduction targets.
Going forward, the firm will encourage companies to work on Scope 3 targets rather than imposing them through proxy votes, a BlackRock executive said.
Write to Angel Au-Yeung at angel.au-yeung@wsj.com
This article was published by The Wall Street Journal, part of Dow Jones
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