Big Investment Funds BlackRock, Vanguard Resist Shareholder Resolutions for Climate Action
Two of the biggest investment funds in the United States, BlackRock Inc. and Vanguard Group, are consistently voting against shareholder resolutions calling for faster, more effective action to address the climate crisis.
“The reticence of the two largest index fund providers to back these proposals draws criticism from some investors and climate activists,” Reuters reports. “Their limited support for other shareholders’ climate-related proposals highlights a broader pattern of deference to management at the companies in their stock portfolios, according to a Reuters analysis of their proxy voting records.”
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“The investors who should be the leaders have so far been the laggards,” said Rob Berridge, director of shareholder engagement at Boston-based Ceres.
In 2017, a group of investors led by Walden Asset Management “filed resolutions with Blackrock and Vanguard calling for reviews of their proxy voting related to climate change,” but “later withdrew the resolutions after BlackRock and Vanguard each pledged to put a new focus on climate risks,” Reuters recalls. But in 2018, the two colossal investment houses only backed 10 and 12% of the shareholder climate resolutions that crossed their desks, Ceres found. A Reuters analysis found similar results for 2019.
“Vanguard and BlackRock both declined to discuss their votes on specific proxy measures. They note their own investors hold a wide range of opinions on climate change,” Reuters states. “BlackRock told a large Seattle pension plan client in 2018 that it often finds shareholder proposals too prescriptive, immaterial, or in the domain of a company’s leadership.” “We typically aim to understand the companies rather than use our vote as a blunt binary instrument,” the company wrote, in response to due diligence questions from the Seattle City Employees’ Retirement System (SCERS).