BlackRock executives are asserting that investors now have more of a say in how companies tackle specific corporate decisions as the asset manager faces significant Republican backlash over its embrace of ESG principles.
In an op-ed published in the Wall Street Journal, Global Heads of iShares and Index Investments Salim Ramji and Joud Abdel Majeid touted the company’s moves to expand a pilot program that offers policy choices to individual investors to decide how their share of the exchange-traded fund would vote on the companies they own. The plan remains subject to approval by the board that governs the ETFs but would expand upon shareholders’ power.
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The company has been working over the past year to give investors a greater say in specific corporate decisions after Republicans complained that it was exerting too much sway over corporate America and putting its thumb on the scales for ESG — that is, environmental, social, and governance factors. GOP lawmakers assail the sector as “woke” capitalism that prioritizes liberal goals over investor return and have called for limiting or even excluding ESG-focused investments from retirement funds.
Republican lawmakers have, in particular, been pushing for stricter oversight of proxy advisory firms, which cast votes in corporate elections on behalf of major investors, while criticizing BlackRock for pushing the companies it owns to invest more in combating climate change
The BlackRock executives tried to deflect the GOP’s criticisms, arguing that their clients’ financial interests are what’s “paramount.”
“For BlackRock, it’s about financial value, not social or political values,” the op-ed reads. “On proxy voting, our clients’ financial interests are paramount. BlackRock makes its decisions independently, informed by company disclosures, engagement with management, and proprietary and third-party research.”
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The authors also rebuffed criticisms that the firm is beholden to the recommendations of proxy firms such as Glass Lewis and Institutional Shareholder Services when voting on behalf of its clients. Over the last year, the firm states, when there was a choice between a recommendation between ISS and the company’s management, BlackRock supported management 85% of the time.
According to BlackRock, clients representing more than $550 billion in assets have enrolled in the firm's Voting Choice Program: a series of third-party voting policies clients can either choose from or make the choice to design their own policies. The program was first announced in 2022.