BlackRock continues lowering support for environmental and social proposals

By Ross Kerber and Isla Binnie

(Reuters) – Top asset manager BlackRock on Wednesday reported a further decline in its support for shareholder resolutions on environmental and social themes, citing corporate progress on the areas and poor crafting of the measures by filers.

With $9.4 trillion under management, BlackRock’s votes have become key to many contests at companies around the globe and in turn drawn much scrutiny of its practices.

In an annual stewardship report being released with the end of the 12-month corporate annual meeting cycle on June 30, New York-based BlackRock said it supported 7% of 399 shareholder proposals on environmental and social issues. According to prior reports that was down from 22% of 321 of such measures in the previous cycle and 47% of 172 of them the year before.

In the newest report BlackRock said many of the measures called for changes that would not be helpful to companies in its funds.

“Because so many proposals were over-reaching, lacking economic merit, or simply redundant, they were unlikely to help promote long-term shareholder value and received less support from shareholders, including BlackRock, than in years past,” the report said.

BlackRock also said it supported directors 89% of the time, consistent with past years.

It said boards had made progress reducing directors serving at too many companies, and withheld support from management’s recommendation on the election of 849 directors over that issue – 150 fewer than in the previous proxy year.

The higher number of the largely non-binding resolutions reflects growing shareholder interest in issues like emissions reductions and workforce diversity, aided by looser U.S. regulations on corporate ballot access.

Data has previously shown investor support slipping for many resolutions, and as companies strike compromises with activists.

BlackRock has been under fire from conservative U.S. politicians who say it has over-emphasized sustainability issues, citing past proxy votes. BlackRock did not address how the criticism may have shaped votes this year.

(Reporting by Ross Kerber in Boston and by Isla Binie in New York; Additional reporting by Simon Jessop in London; Editing by Sonali Paul)