BlackRock and Vanguard Protect Fossil Fuel, Energy, and Auto Execs From Facing Accountability on Climate Change

SEC Disclosures Reveal That Top Asset Managers Voted Against Key Climate Resolutions at ExxonMobil, Duke Energy, Ford, General Motors, and Dominion Energy — several of which were backed by the Climate Action 100+, the $34 Trillion Global Investor Coalition

Image: Americasroof/English Wikipedia

Today BlackRock and Vanguard’s disclosures of their 2018–2019 shareholder votes were released to the SEC, revealing that the largest funds of each asset manager wielded their considerable shareholder power to block the boards of directors of ExxonMobil, Duke Energy, General Motors, Ford, and Dominion Energy from facing accountability on climate change, prioritizing short-termism over the creation of long-term shareholder value. BlackRock and Vanguard, the two largest asset managers in the world, were also top shareholders at each of those companies at the time of their shareholder meetings.

BlackRock and Vanguard’s main index funds voted against key measures at all the companies — several of which would have otherwise passed with those asset managers’ support, assuming the votes of these asset managers were consistent across all their funds. The release of Blackrock and Vanguard’s votes come just a week after they joined a chorus of business leaders in a sweeping statement saying that protecting environmental and community stakeholders is integral to their purpose. Instead of using their considerable shareholder power to promote leadership on climate change, BlackRock and Vanguard are wielding it to shield industries driving the climate crisis from accountability.

• BlackRock and Vanguard voted against two essential resolutions at ExxonMobil that should have created a critical moment of accountability for climate change. In contrast to its peers, ExxonMobil has failed to set greenhouse gas emission targets or even disclose emissions associated with the use of its products. ExxonMobil even refused shareholder demands to meet with an independent director of the company to press these issues. In response, Climate Action 100+, a global investor initiative backed by over $34 trillion in assets under management, backed a resolution to create an independent chair of the board, a critical structural reform for climate accountability that would put a check on the CEO and board. That resolution received 41% support from voting shareholders, while 36% backed a resolution calling on ExxonMobil to report its lobbying activity, an essential reform at a company infamous for backing climate denial efforts and that still has major gaps in its disclosures. BlackRock and Vanguard together control 14.7% of ExxonMobil stock — if they had voted for these resolutions, they would have passed. But their major funds voted against them.
• The Climate Action 100+ coalition also backed critical shareholder resolutions at carmakers Ford and GM, but BlackRock and Vanguard voted against those as well. CA 100+ backed resolutions calling for GM and Ford to enhance disclosure and governance on climate lobbying after it was revealed that the Auto Alliance, a leading automotive trade association backed by these manufacturers, was lobbying to weaken fuel efficiency standards. BlackRock and Vanguard voted against both resolutions, undermining the efforts of CA 100+ to drive accountability on these issues.
• At Duke Energy, the largest CO2 emitter of all electric utilities in the U.S., BlackRock and Vanguard voted against a critical measure to bring transparency to the company’s lobbying activity. Duke is known to support organizations seeking to undermine responsible climate policy, including the American Legislative Exchange Council and the secretive Utility Air Resources Group. 36% of Duke’s voting shareholders backed the resolution, but BlackRock and Vanguard, which control 15% of the company’s common stock, voted against it. BlackRock and Vanguard also voted to re-elect a known climate change denier, Daniel DiMicco, to Duke’s board of directors to serve on a committee charged with overseeing the company’s sustainability and political influence efforts. At a time when Duke Energy must be undertaking the massive business transformation required to achieve net-zero emissions by 2050, BlackRock and Vanguard continue to give Duke a free pass to continue business as usual.
• At Dominion Energy, a major investor-owned utility, BlackRock and Vanguard voted against a resolution demanding an independent chair of the board — a critical reform for accountability to long-term investors on climate change. Electric utilities must eliminate CO2 emissions as rapidly as possible, but Dominion leadership has drawn criticism for slowing, not accelerating, its rate of decarbonization. The company has doubled down on the controversial and potentially uneconomic Atlantic Coast Pipeline project, and Dominion’s lead independent director has longstanding ties to the pipeline project himself. Despite 40% of voting shareholders and proxy advisor Institutional Shareholder Services calling for an independent chair at Dominion, BlackRock and Vanguard’s major funds both voted against it. BlackRock and Vanguard together own over 12% of Dominion’s shares — meaning if they supported the resolution, it would have passed.

Just as they have in past years, BlackRock and Vanguard continue to be a driving force behind the climate crisis by wielding their considerable shareholder power to shield fossil fuel, energy utility, and auto executives from facing accountability. Majority Action’s forthcoming 2019 Asset Manager Climate Scorecard will analyze these and other critical climate shareholder votes to further address how leading asset managers torpedo necessary measures to address the long-term risks of climate change.