BlackRock voted against 80%+ of climate-related resolutions in 2020, says Morningstar

Giant’s support for climate proposals dropped this year, but rose at Fidelity, State Street and Vanguard

BlackRock opposed more than 80% of shareholder resolutions calling for climate action at portfolio companies in 2020, according to figures from Morningstar, which described the low levels of support as “out of step” with the $7trn fund giant’s commitment to vote against management “when companies are not making sufficient progress on sustainability-related disclosures and the business practices and plans underlying them”.

According to analysis by Morningstar, BlackRock opposed a number of resolutions that had broad shareholder support, including one at JPMorgan – considered to be the largest fossil fuel lender in the world – requesting the board set out a strategy to reduce Scope 3 emissions. The resolution missed a majority vote by less than 0.5%; a result that could have been overturned by BlackRock’s 6.7% stake.

BlackRock also voted against resolutions on climate disclosure at Phillip 66 and Dollar Tree, despite them passing with 55% and 74% shareholder support respectively. This year, the manager supported 14% of the climate resolutions it voted on – a drop from last year’s 25%.

Commenting on the report, a BlackRock spokesperson told RI that the firm was "primarily focused on engagement and holding directors accountable" in 2020. It said it had taken "voting action" against 53 out of 244 portfolio companies identified as making "insufficient progress integrating climate risk into their business models or disclosures" and had put the remaining companies "on watch". The firm said it would soon release its voting guidelines for the next proxy season.

The approach contrasts with increasing support for climate-related resolutions at other major fund houses. Morningstar noted that State Street Global Investors and Fidelity had this year supported a majority of climate disclosure-related resolutions for the first time on record. State Street, Fidelity and Geode (Fidelity’s index fund arm which casts votes separately) supported 55%, 47% and 64% of climate-related resolutions, respectively.

At Vanguard, funds voted in favour of 36% of climate-related resolutions – up from 25% support the previous year – despite opposing similar motions at JPMorgan and Phillip 66 together with BlackRock.

Climate-related resolutions had the lowest support from Capital Group’s American Funds, which voted ‘yes’ on only 11% of resolutions calling for climate action. The mutual fund house backed 25% of similar resolutions last year.

Morningstar analysts noted that fewer climate-related resolutions had come to vote in 2020, and attributed this partly to “growing hostility from the Securities and Exchange Commission toward climate change proxy proposals”, which has allowed a number of companies to leave resolutions off the ballot.

It was also due to withdrawal of resolutions by investors themselves on the back of productive engagements, researchers said.