Shareholders Challenge Major Investment Firms on Declining Voting Records
NEW YORK, NY, WEDNESDAY, DECEMBER 13, 2023 - Asset owners are increasingly concerned about asset managers’ declining proxy voting on ESG shareholder proposals. Some are taking their concerns to the boardroom and other shareholders by filing shareholder resolutions at BlackRock, State Street, Goldman Sachs, and J.P. Morgan.
The resolutions challenge these asset managers' poor voting record and urge them to evaluate misalignments between their public commitments on climate and racial justice and their proxy voting record. These concerns are both timely and relevant.
The recently published UK Asset Owner Stewardship Review highlights a growing misalignment between asset owners and asset managers when it comes to exercising stewardship and proxy voting at major Oil and Gas companies. This misalignment is most pronounced in recent years, on shareholder resolutions at American companies compared to European companies. Georgeson reports that in 2023 BlackRock supported only 15% of environmental proposals on proxies vs 37% supported in 2022. And State Street went from supporting around 50% of proposals voted in 2022 to just 37% in 2023.
Katie Carter, Director of Faith-Based Investing and Shareholder Engagement for the Presbyterian Church, (U.S.A.), said these declining votes and the growing misalignment with stated values drove them to file the resolution at Goldman Sachs Asset Management; “Goldman Sachs has a clear understanding of the risks companies face from climate change and the importance of diversity for shareholder value, yet this year we saw a dramatic drop in their support for resolutions on both issues. This contrast in their stated values and their proxy voting record led us to seek meetings with management and file this resolution”.
Katie McCloskey, Vice President of Social Responsibility Mercy Investment Services which leads the resolution at BlackRock, explained that “BlackRock’s own research indicates that long-term inaction on climate change could reduce global economic output by nearly 25 percent over the next two decades. Given this clearly articulated cost of inaction on climate, we are deeply concerned about the drop in BlackRock support for shareholder proposals asking companies to address climate risks. The company’s own reporting shows they supported only 7% of shareholder proposals on climate and natural capital and company impacts on people that were on proxy this year”.
Matthew Illian Director of Responsible Investing for the United Church Funds (UCF) who has filed a similar shareholder proposal at State Street added, “The firm’s drop in support for shareholder resolutions on DEI and racial equity was alarming to us given the positive impact diversity has on a company’s bottom line increasing both mean return on equity (ROE) and return on invested capital (ROIC) according to recent research. This drop in support certainly doesn’t match with SSgA’s 'longstanding focus on the value derived from diversity, equity, and inclusion’ as reiterated in their Stewardship Activity Report”.
Cathy Rowan Director of Socially Responsible Investments at Trinity Health who filed the shareholder proposal on behalf of the Maryknoll Sisters at J.P. Morgan said, “Despite mounting evidence documenting the economic cost of inaction on issues like racial justice and climate, JP Morgan opposed all shareholder proposals calling for a racial equity/civil rights audit at S&P 500 companies this year. This, along with the drop in the asset manager’s support for other ESG proposals made the filings urgent and necessary”.
Tim Smith, Senior Policy Advisor at the Interfaith Center on Corporate Responsibility agreed, adding “Investors don’t come to these filings lightly. Both as clients and shareholders we have been engaging and encouraging asset managers to recognize their fiduciary duty, highlighting the economic costs of ignoring climate and racial justice and building the business case for responsible stewardship for years now. We want to see them acting on these commitments through their proxy voting not just talking about them.”
CONTACT:
Susana McDermott
Director of Communications
Interfaith Center on Corporate Responsibility (ICCR)
201-417-9060 (mobile)
smcdermott@iccr.org
About the Interfaith Center on Corporate Responsibility (ICCR)
The Interfaith Center on Corporate Responsibility (ICCR) is a broad coalition of more than 300 institutional investors collectively representing over $4 trillion in invested capital. ICCR members, a cross-section of faith-based investors, asset managers, pension funds, foundations, and other long-term institutional investors, have over 50 years of experience engaging with companies on environmental, social, and governance (“ESG”) issues that are critical to long-term value creation. ICCR members engage hundreds of corporations annually to foster greater corporate accountability. Visit our website www.iccr.org and follow us on Twitter/X (@iccronline), LinkedIn, and Facebook.
