BlackRock support for ESG shareholder resolutions hits fresh low

illuminem summarizes for you the essential news of the day. Read the full piece on Reuters or enjoy below:

🗞️ Driving the news: BlackRock, the world's largest asset manager, drastically reduced its support for shareholder proposals on environmental and social (E&S) issues, backing only 4.1% during the latest annual general meeting (AGM) season
• Despite an increase in the number of such proposals—from 455 to 493—BlackRock rejected most, citing reasons similar to previous years

🔭 The context: In 2023, BlackRock supported 6.7% of E&S proposals, a significant drop from the 47% it backed in 2020-21
• The firm’s "2024 Global Voting Spotlight" report stated that many proposals were considered overreaching, lacking in economic merit, or unlikely to enhance long-term shareholder value
• Additionally, some proposals addressed risks that companies were already managing, rendering them redundant

🌍 Why it matters for the planet: The decline in BlackRock's support for E&S proposals comes amidst growing political pressure, especially from U.S. Republican politicians, who criticize the firm and others for engaging in "woke capitalism"
• This trend is significant as it impacts how companies manage sustainability risks and align their operations with global climate goals

⏭️ What's next: BlackRock has indicated it will continue to focus on financial resilience while also considering how companies handle the transition to a low-carbon economy
• The firm did not support any of the 88 proposals aimed at rolling back sustainability initiatives but did back 20 proposals overall, including those related to climate disclosures at companies like Berkshire Hathaway and Wingstop

💬 One quote: "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," BlackRock stated in its report

📈 One stat: BlackRock’s overall support for shareholder resolutions rose slightly to 11% from 9% the previous year, driven by increased backing for governance-related proposals

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