Morningstar’s “Hints of Sea Change in Big Fund Company ESG Proxy Votes” illustrates the outsized impact the “Big Three” (BlackRock, State Street, and Vanguard) are having on support for ESG shareholder proposals this proxy season based on their individual and aggregate positions in companies’ stock (with their combined holdings sometimes comprising more than 20% of companies’ stock), as well as their increasing reliance on shareholder proposal voting to promote their stewardship efforts.
BlackRock and Vanguard in particular forewarned of their increasing willingness and/or determination to support ESG shareholder proposals this year, and indeed, BlackRock’s and Vanguard’s select post-meeting voting bulletins and companies’ post-meeting accounts evidence their significantly stepped up support for these proposals in practice this year. From January to May 11, average shareholder support for ESG proposals was up by 12% over the same period last year, at 44%. This table shows the increase in voting support for certain proposals in 2020 compared to the 2021 proxy season, likely fueled by Big Three support:
Post-season analysis of actual voting results will provide more color on this important trend.
See “Investors Give Exxon Payback for Frustrations on Strategy and Climate” (re: BlackRock, State Street, and Vanguard) (WSJ) and additional resources on our Institutional Investors and Proxy Season 2021 pages.
This post first appeared in the weekly Society Alert!