“We continue to innovate and provide more choice to our clients who wish to take a more direct role in the proxy voting process. We’re pleased to add a third proxy advisor to our platform and the option for more clients to customize their voting guidelines to reflect their specific goals and objectives,” said Joud Abdel Majeid, global head of BlackRock Investment Stewardship in a statement.
For the start of the 2025 proxy voting season, which begins on July 1, BlackRock will add two Egan-Jones proxy voting guidelines.
The first is Egan-Jones’ flagship “Wealth-Focused Policy.” That policy aims to “protect and enhance the wealth of investors” and “does not prioritize environmental or social goals,” according to BlackRock’s statement.
The second is Egan-Jones’ “Standard Policy,” which is its most popular policy and takes a “balanced approach to shareholder and management proposals,” according to a description on its website.
ESG backlash
BlackRock, like other asset managers, has been caught up in the political battles over environmental, social and governance investing and the ensuing backlash.
Using environmental, social and governance data is important for risk analysis in investing, said Catherine Griffin, founder and CEO of ImpactableX Analytics, a software company that brings impact data and analytics to the private market.
“The growth and protection of shareholder wealth and the prioritization of social and environmental goals are not mutually exclusive,” she said. “Indeed, the entire premise of ESG investing is to mitigate risk exposure and safeguard investor interests in the long term. This isn't news to Blackrock which tells me they must be under significant pressure from the market.”
BlackRock Chairman and CEO Larry Fink wrote in his annual letter this year that the issue of transitioning to a post-carbon energy world has become “more contentious in the U.S.” Fink noted that the world is not split with “between oil and gas producers on one side and new clean power and climate tech firms on the other.” Instead, many companies “do both.”
BlackRock said it supports institutional clients who implement custom voting that is in-line with their organization’s goals. The world's largest asset manager said it would extend this option and support more institutional clients in eligible separately managed accounts who implement bespoke voting guidelines for the upcoming proxy year.
BlackRock introduced Voting Choice in 2022 and has steadily expanded the program, including adding shareholders of its largest exchange-traded fund.
The program has witnessed growth. At the end of September 2022, clients accounting for $452 billion were exercising Voting Choice. At the end of 2023, that figure stood at $598 billion, according to BlackRock.
BlackRock noted in its statement that the majority of its equity investment clients continue to entrust BlackRock’s investment stewardship team with voting. BlackRock managed a total of $10.5 trillion in assets across all strategies as of March 31.
