BlackRock Won’t Support Climate Shareholder Proposals It Deems Too Prescriptive
black rock said that in 2021 “we have seen a shift in climate-related shareholder proposals with requests that either addressed material business risks or were rooted in reports providing information that would be useful for investors to assess the ability of a company to generate long-term sustainable value.”
The report indicates that the company is more likely to support shareholder proposals that are consistent with the company’s request to provide information that helps understand the significant risks and opportunities that companies face.
“BlackRock emphasized in the report that “we are not likely to support those (shareholder proposals) that we believe are implicitly intended to micromanage companies. This includes those that are unduly prescriptive and binding on board or management decision-making, call for changes in a company’s strategy or business model, or address issues that are not material to the how a company delivers long-term shareholder value.”
BlackRock is setting the tone for the current proxy season as a record number of U.S. shareholder resolutions – more than 250 – related to environmental and social issues will be put to the vote.
BlackRock also said regulatory and geopolitical dynamics have changed since last year, pointing to new guidance on social policy issues from the U.S. Securities and Exchange Commission and the fallout on energy markets from the rise. Russian invasion of Ukraine.
Among the proxy voting topics BlackRock said it identified relating to environmental and social themes this year are proposals to stop providing funding to traditional energy companies; dismantling the assets of traditional energy companies; amending bylaws or corporate charters to make climate risk reporting or voting mandatory; and lead climate lobbying activities; and political positions or political expenditures.
BlackRock said “in conclusion, the BRI is focused on supporting businesses as they address the significant business challenges they face, including the decades-long transition to a low-carbon economy.”
BlackRock was managing $9.6 trillion as of March 31.
Bloomberg contributed to this story.