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BlackRock’s support for ESG measures falls to new low

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BlackRock’s support for ESG measures falls to new low

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BlackRock’s support for shareholder proposals on environmental and social issues has fallen to a fraction of its 2021 peak, it disclosed on Wednesday, even as its support for governance-related questions rose.

In the 12 months to the end of June, BlackRock supported just 20 of the 493 environmental and social proposals put forward by shareholders at annual meetings, or about 4 per cent of the total, according to its annual investment stewardship report.

That compares with a high of 47 per cent in 2021. By last year the figure had fallen to 7 per cent.

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The decline in support comes as companies’ efforts to address climate change and inequality — issues that were once bundled together with governance under the ESG umbrella — have become politically fraught.

Conservatives have accused BlackRock and other large asset managers of using their large holdings to pursue “woke capitalism”, while the left has complained that investors have failed to push hard enough for decarbonisation.

But governance-related activities seeking to protect shareholder rights and promote strong boards have escaped similar criticism.

The $10.6tn asset manager said that it had voted on a record 867 shareholder proposals overall, but had found very few of those on environmental and social issues to be in the best interest of its clients.

Many of this year’s proposals were “overly prescriptive, lacking economic merit or asking companies to address material risks they are already managing”, wrote Joud Abdel Majeid, BlackRock’s global head of investment stewardship.

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The number of no votes was lifted this year by BlackRock’s uniform opposition to 88 conservative-backed anti-ESG resolutions seeking to prevent companies from addressing such issues.

The world’s largest money manager voted in favour of 79 of the 374 governance proposals it considered, or 21 per cent, up from 11 per cent last year. Among the most common were proposals to introduce simple majority voting, rather than requiring a supermajority.

BlackRock’s lack of enthusiasm for environmental and social proposals contributed to low overall support for such measures at many corporate annual meetings.

The median support for environmental and social shareholder proposals at Russell 3000 companies was 21 per cent and 18 per cent, respectively, this year, according to data from ISS-Corporate. Only two climate-related questions received majority support.

Globally, BlackRock supported 88 per cent of proposals put forward by the companies it invests in, including 82 per cent of those related to pay. It also backed 90 per cent of company-nominated directors, similar to its voting in previous years.

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It said its main reasons for opposing directors were lack of independence, membership on too many boards and concerns about executive compensation.

Video: Who killed the ESG party? | FT Film
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Video: Fires Continue to Burn One Week Later in California

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Video: Fires Continue to Burn One Week Later in California

new video loaded: Fires Continue to Burn One Week Later in California

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Fires Continue to Burn One Week Later in California

The Palisades and Eaton fires, ravaging Los Angeles for more than a week, remain mostly uncontained by firefighters.

“We just had — just had Christmas morning right over here, right in front of that chimney. And this is what’s left.” “I urge, and everybody here urges, you to remain alert as danger has not yet passed. Please follow all evacuation warnings and orders without delay and prioritize your safety.”

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South Korea’s President Yoon Suk Yeol arrested after stand-off with police

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South Korea’s President Yoon Suk Yeol arrested after stand-off with police

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South Korea’s suspended President Yoon Suk Yeol was arrested on Wednesday morning following a predawn raid by police and investigators on his fortified hilltop compound.

Yoon’s detention followed a six-hour stand-off between law enforcement officials and members of the president’s security detail. It is the first time in South Korea’s history that a sitting president has been arrested.

The development marks the latest twist in a political crisis that was triggered by his failed attempt to impose martial law last month, and which has shaken confidence in the democratic integrity of Asia’s fourth-largest economy.

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Yoon was suspended from his duties after he was impeached by parliament in December following his attempt to impose martial law. The country is currently being led by finance minister Choi Sang-mok as acting president.

The operation on Wednesday, which began shortly after 4am, was the second attempt this month by the CIO to detain Yoon for questioning on insurrection and abuse of office charges.

An initial effort earlier this month was foiled by Yoon’s protection officers following a tense hours-long stand-off at the presidential residence. Yoon had previously refused to comply with investigators and had challenged their authority to bring him in for questioning.

“The rule of law has completely collapsed in this country,” Yoon said in a video statement recorded before his transfer to the headquarters of the country’s Corruption Investigation Office for questioning. “I’ve decided to appear for CIO questioning in order to prevent any bloodshed.”

According to South Korea’s state-owned news agency Yonhap, police and officials from the CIO arrived at the compound early on Wednesday and presented a warrant for Yoon’s arrest but were again initially prevented from entering by the Presidential Security Service.

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Yonhap also reported that about 30 lawmakers from Yoon’s conservative People Power party were at the compound and attempting to prevent officials from entering it.

But with hundreds of police gathered outside, some of them equipped with ladders and wire cutters to overcome barricades erected by Yoon’s protection officers, CIO officials were eventually allowed to enter the residence.

Yoon’s lawyers initially attempted to broker a deal whereby he would surrender voluntarily for questioning. But this was not accepted by CIO officials, and he was eventually arrested just after 10.30am and transferred to the investigative agency’s headquarters.

“Yoon’s arrest is the first step towards restoring our constitutional order,” said Park Chan-dae, floor leader of the leftwing opposition Democratic Party of Korea. “It underlines that justice is still alive.”

While Yoon’s powers have been transferred to Choi as acting president, he remains South Korea’s head of state while the country’s Constitutional Court deliberates on whether to approve his impeachment or reinstate him in office.

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The court held its first formal hearing into Yoon’s impeachment on Tuesday, but the session was adjourned after four minutes because the suspended president declined to attend, citing concerns for his personal safety.

The efforts by the CIO and police to detain Yoon for questioning relates to a separate, criminal process connected to his failed imposition of martial law. Yoon’s lawyers insist the CIO has no standing to pursue criminal insurrection charges against him.

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SEC sues Elon Musk, says he didn't disclose Twitter ownership on time before purchase

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SEC sues Elon Musk, says he didn't disclose Twitter ownership on time before purchase

Elon Musk speaks as part of a campaign town hall in support of Donald Trump in Folsom, Pa., on Oct. 17, 2024.

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The U.S. Securities and Exchange Commission has sued billionaire Elon Musk, saying he failed to disclose his ownership of Twitter stock in a timely manner in early 2022, before buying the social media site.

As a result, the SEC alleges, Musk was able to underpay “by at least $150 million” for shares he bought after he should have disclosed his ownership of more than 5% of Twitter’s shares. Musk bought Twitter in October 2022 and later renamed it X.

Musk started amassing Twitter shares in early 2022, and by March of that year, he owned more than 5%. At this point, the complaint says, he was required by law to disclose his ownership, but he failed to do so until April 4, 11 days after the report was due.

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Representatives for X and Musk did not immediately return a message for comment.

After Musk signed a deal to acquire Twitter in April 2022, he tried to back out of it, leading the company to sue him to force him to go through with the acquisition.

The has SEC said that starting in April 2022, it authorized an investigation into whether any securities laws were broken in connection with Musk’s purchases of Twitter stock and his statements and SEC filings related to the company.

Before it filed the lawsuit, the SEC went to court in an attempt to compel Musk to testify as part of an investigation into his purchase of Twitter.

The SEC’s current chair, Gary Gensler, plans to step down from his post on Jan. 20 and it is not clear if the new administration will continue the lawsuit.

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