"Because so many proposals were over-reaching, lacking economic merit, or simply redundant, they were unlikely to help promote long-term shareholder value."
AUSTIN, Texas (Texas Insider Report) — For several years now, top Republican policymakers – both here in Texas, and across the nation – have urged businesses of all types and in all industries to move on from being so overtly focused on the so-called environmental, social & governance (ESG) topics. And now, there is new proof that Wall Street firms have finally started to change their behavior.
A new report has revealed that top asset manager, BlackRock, only supported 7% of 399 shareholder proposals on environmental and social proposals. This is down from 22% support in 2022 and 47% in 2021.
Even more broadly, asset managers support for ESG resolutions fell to 15% in 2023, down from 25% in 2022 and 32% in 2021.The report further stated that BlackRock supports management of companies 89% of the time, in line with past years.
On explaining this report, BlackRock claimed the suggested measures they voted against would not be helpful to the 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."
Some of the downturn in supportive votes is likely because of the higher number of ESG shareholder proposals that are allowed due to a change in the Securities & Exchange Commission. For example:
- In 2022 there were 300 ESG proposals.
- Already in 2023, there have been 340.
- Nonetheless, the drop in supportive votes seems to be more of a conscious choice rather than happenstance.
Between Senate Bill 13 and the Senate Committee on State Affairs hearing in Marshall last December with BlackRock and State Street, state leaders like Sen. Bryan Hughes have showed that they mean business when it comes to curtailing ESG. This makes some sense when our state is so dependent on fossil fuels. However, BlackRock seems to be taking notice of the points raised by Texas’ leaders and, in fact, is even publicly showing how receptive they are to the importance of fossil fuels, with CEO Larry Fink mentioning the importance of such in his most recent annual letter.
Though they are not claiming to be responding to the perpetual Republican backlash, it does seem to rebuff any assertion they are putting ESG values above returns.
- In July, Cong. Andy Barr (R-KY) had declared the month to be “ESG month” for House Republicans to extinguish these practices.
- Following that, BlackRock elected Amin Hassan Ali Nasser, Aramco president & CEO, to their Board of Directors – and expanded their Voting Choice Program to give pension funds and other large institutional investors the ability the vote their own shares.
And perhaps even more importantly, it’s not just BlackRock that's supporting fewer ESG proposals.
State Street, another one of the Big Three asset managers, also had a decline in their support for ESG proposals – just less stark.
In 2023, State Street has supported 32% of ESG resolutions, compared to 44% in 2022 and 49% in 2021. State Street cited the SEC’s policy change as one of the factors behind the decline, and their head of stewardship, Benjamin Colton, said that “nothing has changed” in their approach to ESG voting.
The last of the Big Three to report, Vanguard, also just released their figures on 2023 proxy voting, which also showed a similar decline in voting for ESG related measures.
State Street, another one of the Big Three asset managers, also had a decline in their support for ESG proposals – just less stark.In 2023, State Street has supported 32% of ESG resolutions, compared to 44% in 2022 and 49% in 2021. State Street cited the SEC’s policy change as one of the factors behind the decline, and their head of stewardship, Benjamin Colton, said that “nothing has changed” in their approach to ESG voting.
The last of the Big Three to report, Vanguard, also just released their figures on 2023 proxy voting, which also showed a similar decline in voting for ESG related measures.
Although some Republican presidential nominees, such as Vivek Ramaswamy – who founded Strive, an asset management company specifically created to compete with “woke” asset managers – continues to rip on the Big Three and keep ESG in the headlines, the average American is simply not tuned into ESG.
A May Gallup Poll revealed only 37% of Americans reported being “very” or “somewhat familiar” with ESG. Republicans, for the most part, are taking this new data on a downturn in ESG support as a sign of success and many have shifted their focus onto issues that will actually excite their base.
The NY Post's columnist Charlie Gasparino put it succinctly in a recent column entitled, “It’s only a matter of time until the ESG movement will R.I.P.”
In the article, he noted how big Wall Street investment firms like “BlackRock will be part of the solution to prevent its [ESG’s] excesses from destroying the U.S. economy.”
In the article, he noted how big Wall Street investment firms like “BlackRock will be part of the solution to prevent its [ESG’s] excesses from destroying the U.S. economy.”
It is no stretch of the imagination to say these developments are something that Texas’ Republican legislators can take credit for.
