By Simon Jessop
LONDON (Reuters) – BlackRock Inc, the world’s No.1 asset manager, reported on Tuesday a sharp drop in its support for environmental and social-related shareholder resolutions, saying many were too prescriptive, while its backing for directors and executive pay held steady.
BlackRock had warned in May it would back fewer shareholder resolutions because many were too constraining, requiring banks, for example, to stop funding energy companies, or directing their climate lobbying activities.
The investment giant also cited November guidance https://www.sec.gov/corpfin/staff-legal-bulletin-14l-shareholder-proposals from the U.S. Securities and Exchange Commission that resulted in fewer shareholder resolutions being blocked by the regulator and 245 being put before investors, up 133% on the year.
In the 12 months to the end of June, BlackRock said in a report it had supported 71 of the 321 environmental or social (E&S) shareholder resolutions filed globally, excluding Japan, or 22% of the total. Average market-wide support was 26%, it said.
In the previous year, BlackRock had supported 81 of the 172 E&S resolutions filed, or 47%.
“We observed a marked increase in E&S shareholder proposals that went to a vote and many more proposals were unduly constraining on management or were overly prescriptive as to information sought or timeframes,” the report said.
“Others failed to recognize the progress made such that companies had largely met the ask of the proposal.”
The majority of votes opposed by BlackRock, some 46%, were because the company had already implemented the changes requested, or had made progress on the issue. A further 21% were rejected for being too prescriptive.
Globally, BlackRock said it voted on more than 173,000 proposals at more than 18,000 shareholder meetings. This followed a record 3,690 meetings with company management.
On the issue of directors seeking election or re-election to the board, which together make up the bulk of all votes globally, BlackRock said it had backed 90% of directors, unchanged from the prior year.
Regarding pay-related resolutions, BlackRock said it backed 80% of the 14,995 votes held globally. It backed 72% of votes in Europe, the Middle East and Africa, up from 70% in the prior year; and 89% in the Americas, down from 92% a year earlier.
Support across all agenda items was given to 57% of companies, unchanged year-on-year.
(Additional reporting by Ross Kerber in Boston; Editing by Mark Potter)
