The Big Three & ESG: A Guide to BlackRock, State Street & Vanguard Proxy Voting Policies & Guidance on Key ESG Issues - Governance & Securities Watch (2024)

FAQs

What is the big three and ESG? ›

The “Big Three” institutional investors, BlackRock, State Street Global Advisors and Vanguard, have significant influence on the environmental, social and governance (ESG) policies and related disclosure for public companies.

Vanguard's ESG Support Half That of BlackRock, State Street

BlackRock and State Street supported a slight majority of the 100 proposals (55 and 60, respectively), as the chart below shows. Vanguard opposed almost three fourths (72) of them.

Amidst this global trend, BlackRock, the world's largest asset manager, has taken a bold step by transitioning its investment strategy from ESG investing to a broader approach called transition investing. This move has significant implications not only for BlackRock but for the entire financial industry.

One of the biggest criticisms of ESG is that it perpetuates what it was partly designed to stop – greenwashing.

Latest Holdings, Performance, AUM (from 13F, 13D)

BlackRock Inc.'s top holdings are Microsoft Corporation (US:MSFT) , Apple Inc. (US:AAPL) , Amazon.com, Inc. (US:AMZN) , NVIDIA Corporation (US:NVDA) , and Alphabet Inc.

Who Owns BlackRock? BlackRock is publicly owned, with its shares held by various shareholders, including institutional investors like Vanguard Group and State Street Corporation and individual shareholders. The specifics of these shareholders can change over time.

1.2 billion USD (2024)

Larry Fink / Net worth

BlackRock has since made a U-turn and is trying to smooth things over with its political enemies. Fink told The Wall Street Journal in October that he backtracked from the term ESG because it had been politicized and means something different to every person.

Why are people pulling out of BlackRock? ›

Texas's public schools are pulling out billions of dollars that had been invested with asset manager BlackRock — a firm the state accused of boycotting fossil fuels.

Real Time Net Worth

Larry Fink is the founder, CEO and chairman of powerhouse investment management firm BlackRock, one of the world's largest asset managers. He and seven partners founded BlackRock in 1988.

Critics say ESG investments allocate money based on political agendas, such as a drive against climate change, rather than on earning the best returns for savers. They say ESG is just the latest example of the world trying to get “woke.”

Some supporters think the term has become so broad as to lose much of its meaning. Many point to the prevalence of greenwashing, which is when companies exaggerate the environmental benefits of their actions. Other criticisms focus on the way fund managers rank companies by how they're performing on ESG factors.

In December 2022, Florida announced that it was taking $2 billion out of the management of BlackRock, the world's largest asset manager (and biggest lightning rod for ESG criticism). This was the largest such divestment thus far. These attacks have been coordinated.

The framework divides disclosures into four pillars — principles of governance, planet, people, and prosperity — that serve as the foundation for ESG reporting standards.

ESG Is Banking's Next Big Thing!

The voice of consumers and employees is becoming increasingly influential when it comes to ESG practices. In a survey by PwC, a striking 83% of consumers expressed the belief that companies should actively engage in creating ESG best practices.

The term ESG, or environmental, social and governance, is well-known in the investor community. It refers to a set of metrics used to measure an organization's environmental and social impact and has become increasingly important in investment decision-making over the years.

The Triple Bottom Line is a way of operating and measuring the success of a company. It's redefining success to go beyond financial metrics. Meanwhile ESG is a third party measurement of the procedures and ways a company operates for the purposes of public accountability and investment opportunities.