After a Year of Backlash, BlackRock Sticks to Its Proxy Voting Principles
The world’s largest asset manager made few changes to its 2023 investment stewardship plan.
A politicized debate over the use of environmental, social, and governance principles in investing has led more than a dozen states to propose legislation that forces institutional investors to boycott certain companies, or bars the use of ESG factors entirely. BlackRock, the world’s largest asset manager and an outspoken supporter of sustainability, has drawn the most attention from ESG critics.
But BlackRock’s investment stewardship group doesn’t seem fazed, even as legislation and divestments could cause allocators to pull billions of dollars from the firm.
“Consistent with our long-term approach, the changes made to our stewardship policies for 2023 build on our approach in prior years,” the firm said in its 2023 investment policies summary. “We do not anticipate material changes in our voting as a result, and much of our engagement with companies will be continuing the dialogue on material risks and opportunities that we had in 2022.”
During the 2021 to 2022 proxy year, BlackRock’s stewardship group voted on more than 170,000 proposals at more than 14,000 companies. It also had nearly 3,700 engagements with more than 2,400 publicly traded companies about various issues. In most cases, BlackRock has been supportive of management at companies. It voted for the election or reelection of 90 percent of directors globally in the 2021 to 2022 proxy year. (Institutional clients of BlackRock can also choose to vote on their own behalf.)
BlackRock has kept its five engagement priorities this year: board quality and effectiveness; strategy, purpose and financial resilience; incentives aligned with value creation; climate and natural capital; and company impacts on people.
The firm did, however, make two small adjustments for 2023. BlackRock is encouraging companies to consider adopting the Taskforce on Nature-related Financial Disclosures, a risk management and disclosure framework for nature-related risks. It also acknowledged that companies might need time after their fiscal year-end to “collect, analyze, and report accurate climate- and sustainability-related data” for shareholders, so it’s asking companies to plan accordingly for their annual meetings.
“Our global principles continue to reflect the overarching corporate governance standards and norms that we believe support companies in delivering long-term durable financial performance,” BlackRock said in the summary. “We believe that companies focusing on these topics, as relevant to their business models, will enhance their ability to deliver long-term financial returns for our clients, the vast majority of whom are investing to meet long-term goals, such as retirement.”