ISS has released the results of its annual global benchmark policy survey, a survey that is used every year as part of ISS’ policy development process. This year, the survey included a number of questions on climate change risk management—including board accountability, management say-on-climate proposals, climate risk as a critical audit matter, financed emissions and climate expectations—and then addressed other governance issues such as potential policy exemptions for multi-class capital structures, handling of problematic governance structures and views on proposals calling for third-party racial equity and civil rights audits. ISS received 417 responses to this year’s survey, including 205 from institutional investors or investor-affiliated organizations (an increase of 29% over last year) and 202 responses from companies and corporate-affiliated organizations, with the remainder from academic and other responders. Not surprisingly, investor and non-investor respondents often had disparate views.
In this paper, BlackRock Investment Stewardship provides a preview of its perspective on climate-related shareholder proposals up for votes during the current proxy season. In 2021, BIS “supported 47% of environmental and social shareholder proposals,” but, BIS observes, the results in 2022 are expected to fall well short of that level. Why is that? Because, in the view of BIS, “many of the climate-related shareholder proposals coming to a vote in 2022 are more prescriptive or constraining on companies and may not promote long-term shareholder value.” In addition, BIS advises that its vote determinations will also be affected by the current geo-political context—particularly the impact on climate-related proposals of the Russian invasion of Ukraine —as well as “energy market pressures and the implications of both for inflation.” BlackRock is reportedly the largest asset manager worldwide, overseeing about $10 trillion in assets. But other asset managers are not all that far behind. Will they follow the same path?