NEW YORK: The three biggest US money managers slashed their support of environmental and social shareholder proposals in the latest voting season amid a Republican-led backlash against sustainable investing.
State Street Corp’s investing unit said it supported 6% of environmental shareholder proposals in the first half of the year and 7% of social ones, less than what it did in the same year-ago period.
Vanguard Group said last month that it didn’t back any of those resolutions, while BlackRock Inc said it voted for 4% of the proposals in the 12 months ending June, down from 7% a year earlier.
Together, the three money managers have immense influence during proxy season because they collectively own about 20% of the shares of all companies in the S&P 500, mainly through their enormous index-tracking funds.
The drop in support is a stark turnaround from 2021, when they voted in favour of a record number of such proposals.
The so-called Big Three are taking a more circumspect view of such shareholder proposals, said Lindsey Stewart, director of stewardship research and policy at Morningstar Sustainalytics.
“It’s clear that the political climate, and the rise of anti-environmental, social and governance (ESG) resolutions and legislation, has played some role in the decline in proxy voting support.
“But the fact is, even some of the pro-ESG resolutions were badly worded or lacked a clear benefit to shareholders, so it’s not surprising that firms rejected many of these resolutions.”
Total shareholder support for environmental and social resolutions fell to about 19% during the latest proxy season from roughly 22% in the year-earlier period, according to Morningstar.
Morningstar’s Stewart said the US money managers’ voting records contrast with some of their large European rivals, who remain focused on sustainability. — Bloomberg
