Key Takeaways:
- Support for ESG proposals has hit a record low in the 2024 AGM season, driven by major asset managers cutting back on environmental votes.
- BlackRock, Vanguard, State Street, and Fidelity scaled back their backing, with BlackRock supporting just 4% of environmental resolutions, down from nearly 30% in 2021. Vanguard’s support dropped to 0%.
- Asset managers cite financial concerns, arguing that many proposals lacked economic merit or failed to promote long-term shareholder value.
Institutional Investors Pull Back
Investor enthusiasm for ESG proposals has sharply declined, with shareholder support dropping to its lowest level in years, according to ShareAction’s Voting Matters report. The shift is largely driven by the voting patterns of the world’s largest US-based asset managers.
“Shareholder support for ESG and climate resolutions has dropped to a new low during the 2024 AGM season, a trend primarily driven by voting patterns among the world’s largest US-based managers,” the report states.
Major Asset Managers Shift Focus
BlackRock, Vanguard, State Street, and Fidelity—key players in global markets—have dramatically scaled back their support for environmental proposals. Political pressure in the US has played a role in this shift.
- BlackRock supported only 4% of environmental resolutions in 2024, down from nearly 30% in 2021.
- Vanguard backed just one out of 279 resolutions, effectively dropping its support to 0%.
Financial Justification Over Ideology
Despite the decline in support, asset managers argue this shift is not a rejection of ESG principles but a reassessment of the financial viability of shareholder proposals.
“BlackRock’s voting decisions are based on the long-term financial interests of our clients. For the 2024 proxy year, we found that most environmental and social shareholder proposals were overreaching, lacked economic merit, or were unlikely to promote long-term shareholder value,” a BlackRock spokesman stated.
While ESG remains a significant topic for investors, not all proposals align with long-term financial goals—leading to selective backing by institutional investors.
