Support among asset managers for investor action on climate, DEI falls

illuminem summarizes for you the essential news of the day. Read the full piece on The Wall Street Journal or enjoy below:

🗞️ Driving the news: Support from asset managers for shareholder resolutions on climate, human rights, and diversity issues has significantly declined
• In 2024, only 1.4% of such resolutions passed, a sharp drop from over 20% in 2021, according to ShareAction
• The shift coincides with growing political pressure in the U.S. and corporate pullbacks on environmental and social initiatives

🔭 The context: Major asset managers like BlackRock (see sustainability performance), Vanguard, and State Street have reduced their support for climate and social resolutions, backing only 7% of selected proposals last year
• Many large financial firms have also withdrawn from climate alliances like the Net Zero Asset Managers initiative (NZAMi) due to political scrutiny
• Meanwhile, the SEC has made it easier for companies to block activist shareholder proposals on social and environmental issues

🌍 Why it matters for the planet: The decline in investor support weakens efforts to hold corporations accountable for their environmental and social impact
• With fewer shareholder-backed climate and DEI initiatives, companies may face less pressure to align with sustainability goals
• A continued rollback on ESG commitments could slow progress toward a net-zero transition

⏭️ What's next: Institutional investors representing $1.5 trillion in assets are pushing back, calling for asset managers to uphold their fiduciary duty and integrate climate action into investments
• European asset managers continue to support ESG resolutions more than their U.S. counterparts, but regulatory changes in Europe could alter this trend
• The long-term impact of political and regulatory shifts on sustainable investing remains uncertain

💬 One quote: “This concerning downward trend represents a continued failure of the asset management industry to exercise its shareholder voting power to hold some of the world’s largest companies to account on their environmental and social impacts.” – ShareAction report

📈 One stat: In 2024, only 1.4% of 279 climate, human rights, and diversity-related shareholder resolutions passed, down from over 20% in 2021

See detailed sustainability performances of BlackRock, Vanguard, and State Street

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