Voting is one of the cornerstones of capitalism. To promote ESG in cooperations, the role of proxy voting cannot be underestimated.
According to BlackRock’s newly released 2022 voting spotlight, only 24% of BlackRock’s shareholders supported environment and social-related proposals in the 2022 annual meeting, a significant reduction of nearly 43% compared to last year. Several frequently mentioned issues included “independence,” “board diversity,” “overcommitment,” and compensation.”
Among them, “independence” is particularly problematic in Asia-Pacific companies, with 1,108 objections from BlackRock, four times higher than in the U.S. and EMEA (Europe, Middle East, and Africa), reflecting the common problem of family-owned companies which have only one voice, and lack of autonomy of state-owned enterprises.
Interestingly, the issue of “board diversity,” frequently mentioned by public companies in recent years, seems to have been underappreciated in Asia. BlackRock has voted 648 times in U.S. companies for “not being diverse enough,” which is significantly higher than the 119 votes cast in Asia. But those who are familiar with Asia probably understand that neither Japanese companies distinguish Japanese from Yamato, Ainu, and Ryukyu, nor do Chinese companies distinguish between Han, Manchu, and Uighur.
The SEC revised its guidance on shareholder proposals late last year to expand the scope of permissible proposals on “major social policy issues,” leading to more serious proxy voting. In response, BlackRock issued a special statement back in May about the more restrictive approach to voting.
In addition to some of the motions mentioned above, topics of particular interest to the capital markets include,
Stopping the financing of conventional energy companies
Phasing out the assets of conventional energy companies
Requiring banks and energy companies to align their business models with a 1.5 degree Celsius temperature rise scenario
Modifying corporate charters or bylaws to mandate climate risk reporting and voting
Mandate greenhouse gas emission reduction targets
Lead and disclose climate lobbying activities, policy positions, or political spending
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