Investment giant BlackRock published updates outlining its voting record this year at the annual meetings of energy giants ExxonMobil, Chevron and Shell, indicating that the asset manager supported a lower proportion of climate-related proposals at the companies this year than in the past.
The release of the BlackRock Investment Stewardship (BIS) vote bulletins follows the recent publication by BIS of a report on 2022 proxy season shareholder proposals, noting an increase this year in ESG-focused proposals of “varying quality,” and indicating that its decisions are informed by companies’ near-term needs to invest in multiple sources of energy driven by shifting energy dynamics following the Russian invasion of Ukraine. While BlackRock supported almost half of environmental and social-related shareholder proposals in 2021, in its report, BIS wrote:
“The nature of certain shareholder proposals coming to a vote in 2022 means we are likely to support proportionately fewer this proxy season than in 2021, as we do not consider them to be consistent with our clients’ long-term financial interests.”
At last year’s Exxon AGM, BlackRock voted in favor of several climate-related shareholder proposals, including supporting a successful campaign by activist investor Engine No. 1 to elect three directors with industry experience relevant to the energy transition.
At Exxon’s 2022 AGM last week, BlackRock supported only one climate-related resolution, requesting that the company issue an audited report assessing the effect of the IEA’s “Net Zero by 2050 Pathway” on the costs, estimates, valuations and assumptions underlying its financial statements. While BlackRock acknowledged in its report that Exxon has improved disclosure in this area, it felt that the company’s disclosure “could be reasonably augmented to better allow shareholders to understand how they are managing and mitigating risks that may arise from the global energy transition. The resolution passed with 52% shareholder support.
BlackRock voted against several other Exxon shareholder resolutions, including proposals for the company to “Reduce Company Emissions and Hydrocarbon Sales,” “Report on Low Carbon Business Planning,” and “Report on Reducing Plastic Production.” In its bulletin, BIS provided its reasoning for voting against the resolutions, including finding that the proposals were overly prescriptive and constraining to management, and would not always produce useful information. Additionally, BlackRock does not currently back resolutions calling for Scope 3 emissions targets given the current complexity in assessing and measuring these emissions, particularly for oil and gas companies. None of these resolutions received majority shareholder support.
At Chevron and Shell, BlackRock did not support resolutions calling on the companies to set scope 1, 2 and 3 GHG reduction targets. At Chevron, BlackRock voted against a proposal calling on the company to report on the impacts of the IEA’s Net Zero by 2050 pathway, noting that the company’s TCFD report already includes this analysis. BlackRock did support a resolution at Chevron, calling on the company to report on the reliability of Chevron’s methane emission disclosures.