Investment giant BlackRock announced a new initiative to expand the ability of its clients to participate in proxy voting, providing them with a voice on issues such as executive pay, climate initiatives and governance at the companies they invest in through BlackRock’s funds.
The new proxy voting capabilities will first be rolled out to the firm’s large institutional clients, beginning next year, covering 40% of the firm’s nearly $5 trillion of index equity assets and $750 billion of pooled fund assets.
The new initiative reflects a trend among investors to more active investment stewardship, as sustainability and governance issues increasingly take center stage. In a letter sent to its institutional clients, BlackRock noted a growing interest by clients to have a say on voting issues:
“This capability from BlackRock responds to a growing interest in investment stewardship from our clients. It also reflects broader industry dynamics, such as the impact of advancing technology on investing – and with it, the opportunity for more customized approaches to your investments and how you manage them.”
The new program will give investors several voting options, including voting proxies according to their own policies and using their own voting infrastructure; selecting from a menu of third-party policies, with votes cast according to the selections; voting directly on individual resolutions through BlackRock’s infrastructure, and; continuing to use the firm’s stewardship service, BlackRock Investment Stewardship (BIS) according to BlackRock’s voting policy.
BlackRock said that it will explore further expanding proxy voting capabilities to a broader range of investors across its offerings, including ETFs. BlackRock’s iShares is the largest global ETF provider, with more than $3 trillion in assets. In a statement, BlackRock said:
“BlackRock is committed to exploring all options to expand proxy voting choice to even more investors, including those invested in ETFs, index mutual funds and other products. This initiative will require the cooperation of additional partners across the investment and proxy voting ecosystem. In certain instances, it will also require regulatory and operational system change.”