BlackRock's 2024 global voting spotlight, which captures its proxy voting-focused stewardship activities for the 12 months ended June 30, reveals a plethora of noteworthy statistics, case studies, and instructive commentary that should help inform companies' engagement and disclosure going forward.
Key takeaways include:
Noting the overly prescriptive or economically meritless nature of many environmental and social shareholder proposals that went to a vote, as well as its determination that companies in most cases already had processes in place to address the business risk underlying the proposal (consistent with a theme articulated by other several other large institutional investors this season), BlackRock’s support for such proposals globally declined from approximately 7% last season (of 455 such proposals proposals) to approximately 4% this season (of 493 such proposals).
“Consistent with last year, we found that most shareholder proposals on climate and natural capital issues (environmental), as well as company impacts on people (social), were overreaching, lacked economic merit, or sought outcomes that were unlikely to promote long-term shareholder value. A significant percentage were focused on business risks that companies already had processes in place to address, making them redundant. As a result, investor support –including BlackRock’s – for such proposals remained low.”
The US, which accounted for 88% of BlackRock’s votes on E&S proposals, epitomizes the rise in quantity and decrease in quality of shareholder proposals. The report also notes the relatively few shareholder proponents that filed the vast majority of the proposals in the US without regard to company-specific facts and circumstances.
As has been previously reported, as proposal quality has declined, median shareholder support has also dropped substantially for E&S proposals in particular:
Also consistent with market trends, BlackRock’s support for governance-related shareholder proposals globally and in the US specifically increased this season compared to prior seasons. BlackRock supported approximately 21% of governance proposals globally (of 374 voted) in the 2023-2024 season.
BlackRock supported 93% of directors in the Americas this season. Lack of support was attributed primarily to concerns about board composition.