“Supporting shareholder proposals now plays an increasingly important role in our stewardship efforts, particularly around sustainability. We will support a shareholder proposal when we agree with its intent to address a material business risk and believe that management can do better in managing and disclosing that risk. We may also support a proposal if management is on track, but we believe that the proposal will help accelerate their progress. This year, we expect to support more environmental and social shareholder proposals than we have in the past.”
However, BlackRock’s increased support for proposals on climate and other environmental, social and governance (ESG) issues comes amid continued scrutiny by many smaller socially responsible and other ESG investors, who claim the asset management giant’s rhetoric on climate change has lacked follow-through.
For example, climate activists such as Majority Action and the Sierra Club, an environmental organization, are keeping a close eye on key votes on shareholder proposals and director elections at companies in the automotive, banking, electricity generation, and oil and gas industries to see if BlackRock “takes stronger voting action,” says Ben Cushing, senior campaign representative leading the Sierra Club’s financial advocacy campaign. “I’m cautiously optimistic about the shift in BlackRock’s voting policy,” he says.
But the groups have found cause for concern. Indeed, one such vote at Wells Fargo this week caught their eyes. Majority Action and the Sierra Club both recommended investors vote against Wells Fargo chairman Charles Noski due to the bank’s fossil fuel funding and other climate-related concerns. According to preliminary results announced by Wells Fargo, all directors got majority support. The Sierra Club sent about 7,000 messages to BlackRock and Vanguard executives asking the firms to vote against Noski, Cushing says.Agenda – BlackRock Backs Climate Resolutions While Critics Question Impact