BlackRock one of the world’s leading providers in investment, advisory and risk management has announced that the firm expects to support fewer climate-related shareholder proposals for the upcoming 2022 proxy voting season in comparison to last year. In 2021, BlackRock supported 47% of environmental and social shareholder proposals. The firm was focused on the proposals addressing material business risks and providing information to assess companies’ ability to create long-term values.
“The nature of certain shareholder proposals coming to a vote in 2022 means we are likely to support proportionately fewer this proxy season than in 2021, as we do not consider them to be consistent with our clients’ long-term financial interests.”
This year there has been an increase in ESG-focused proposals of “varying quality”, following the revision of SEC guidance on broadening the scope of permissible proposals. BlackRock decisions were also informed by the companies’ needing to invest in multiple sources of energy after the dynamic energy shift following the Russian invasion of Ukraine
Earlier this year, BlackRock Investment Stewardship (BIS), indicated that BlackRock is focusing its efforts on areas that include climate, biodiversity, and human rights, this is in addition to board quality and company strategy. The firm listed specific climate priorities, encouraging companies to report business models with scenarios that keep global warming below 2°C, with moving toward next zero in the year 2050. BlackRock also mentioned that the firm wants to help investors understand their approach through disclosures on scope 1 and 2 emissions.
In a recent publication, BlackRock outlined the types of climate proposals they would support. This includes encouraging companies to provide information on material climate risks and opportunities, paying attention to details on climate action plans and looking at the expected impact of energy transition models and financial performance. This will all be backed by Scope 1 and 2 emissions data as well as emissions reduction targets. The firm also recommends disclosure on Scope 3 emissions, but currently they are not relying heavily on Scope 3 emissions as it has givens issues with regulatory uncertainty and concerns about double-counting.
Citation: Segal, Mark. “BlackRock to Back Fewer Climate Proposals This Year as Quality of Resolutions Declines.” ESGToday, 11 May 2022, https://www.esgtoday.com/blackrock-to-back-fewer-climate-proposals-this-year-as-quality-of-resolutions-declines/