BlackRock Reduces Support for ESG Proposals to Record Low

In a significant shift, BlackRock, the world's largest asset manager, has drastically reduced its backing for environmental, social, and governance (ESG) proposals. In its latest report, the firm revealed it supported only 4% of nearly 500 ESG-related shareholder proposals during the 2023-24 proxy season, marking a new record low. This decline follows a previous low of 6.7% in 2023, indicating a continued retreat from the ESG movement. BlackRock's report cited that many of the proposals were deemed "over-reaching" and lacking in economic merit, with outcomes unlikely to enhance long-term shareholder value. The firm noted that a significant number of proposals addressed business risks that companies were already managing, rendering them redundant. This stance reflects a broader trend as BlackRock, once a leader in promoting ESG initiatives, has increasingly distanced itself from the movement amid growing opposition. The overall support for ESG proposals across the market remained stagnant at 23% last year, according to industry tracker Morningstar. However, support for environmental and social resolutions specifically saw a decline, dropping from 19% to 16%. This trend highlights a potential shift in investor sentiment and the challenges facing the ESG agenda in the current economic climate. As BlackRock reassesses its approach, the implications for the future of ESG investing and corporate responsibility remain uncertain, raising questions about the sustainability of the movement in the face of mounting criticism.