Weeks after Oklahoma blacklisted 13 firms for using ESG and banning financial dealing with the oil and gas industry, the environmental nonprofit Planet Tracker released results of a report showing the world’s biggest asset managers are consistently voting against proposals intended to protect biodiversity.
The study found that some ESG efforts are failing at shareholder meetings and one of those is Blackrock, a firm now banned from doing financial business with Oklahoma agencies.
Planet Tracker reported it found nearly two thirds (62%) of votes on biodiversity proposals were cast against or not voted on, showing investors are still failing to take biodiversity loss seriously, despite half the world’s GDP ($44 trillion) being moderately or highly dependent on nature.
Planet Tracker’s latest Report Voting against nature assesses 26,587 votes cast on biodiversity proposals and found that very little, only 7%, of votes provided shareholders’ reasoning for the decision, and those that did were largely when the vote was in favour.
Funds that do disclose rationale for voting against biodiversity-related proposals shared reasons including that the proxy was overly prescriptive (33 funds), the company already reports (32), insufficient shareholder benefits (31) and the company already has a policy (28). Planet Tracker’s analysis finds this despite companies having weak policy commitments or no evidence of meeting targets set previously, illustrating a lack of recognition around the risk of inaction on biodiversity.
Deeper analysis of three of the top five global asset managers – BlackRock, Vanguard and SSGA – revealed that despite public commitments to sustainable investing, their sustainability funds voted against biodiversity proposals 80-100% of the time and none recorded the rationale for their voting.
While the report found that the majority of sustainability and ESG funds in the study supported biodiversity proposals (76%), double the proportion of other fund types (38%), they only made up 3% of votes so have little impact on the outcome of the vote. Moreover, nearly 20% of sustainability funds voted against biodiversity-related proxies, giving shareholders a reason to question whether they are being misled.
John Willis, Director of Research at Planet Tracker, comments: “Following last year’s landmark Global Biodiversity Framework committing the private sector to ambitious nature targets, it’s disappointing to see financiers, particularly those who define themselves as sustainable, continuing to overlook biodiversity and not using their financial might to protect nature.
“With asset managers favouring engagement over divestment as an approach in transforming corporate behaviour, funds must step up and support important biodiversity proposals, or provide justification for their voting decision.”
Voting against nature: Why are investors not protecting biodiversity? can be downloaded in full here.