BlackRock trims support for some ESG resolutions in AGM season

By Simon Jessop

LONDON (Reuters) – BlackRock (NYSE:), the world’s biggest asset manager, cut its support for shareholder proposals linked to environmental and social issues in the most recent annual general meeting season, backing just 4%, a report on its global voting record showed.

Despite the number of environmental- and social-related proposals increasing year-on-year to 493 from 455, BlackRock said most had been rejected for much the same reasons as in previous years. In 2023 it had supported 6.7% of such proposals.

“In our assessment, the majority of these (proposals) were over-reaching, lacked economic merit, or sought outcomes that were unlikely to promote long-term shareholder value,” it said in the report on Wednesday.

“A significant percentage were focused on business risks that companies already had processes in place to address, making them redundant.”

Ahead of the season, BlackRock had said it would push boards on their financial resilience.

Also driving the number lower were the growing number of resolutions aimed at forcing companies to roll back their plans to manage sustainability risks, including retooling their operations to be in line with global climate goals.

BlackRock said it did not support any of the 88 proposals that fell into this category.

In total this year it supported 20 proposals. Of them, four were related to climate and natural capital, concerning disclosures at Berkshire Hathaway (NYSE:), Denny’s (NASDAQ:) Corporation, Jack in the Box (NASDAQ:) and Wingstop (NASDAQ:).

More broadly, BlackRock’s support for shareholder resolutions increased to 11% from 9% – or 99 out of 867 against 71 out of 811 in the prior year – driven by the firm’s backing for more governance-related resolutions.

“The proposals we supported sought to enhance minority shareholders’ rights, for example, by introducing simple majority voting. Market support for governance proposals also increased relative to last year,” it said.

Across the market, overall support for ESG proposals was flat at 23%, industry tracker Morningstar said, while support for environmental and social resolutions fell to 16% from 19%.

Shareholder resolutions aside, BlackRock said it voted on more than 169,200 proposals globally, backing management’s position 88% of the time, in line with previous years.

It also backed the election of board directors 90% of the time, although it declined to support 128 proposals at 104 companies because of concerns about inadequate disclosure or effective board oversight of climate-related risks.