The Big Three passive asset management firms—BlackRock, State Street, and Vanguard—have been criticized for using investors’ money in pursuit of political goals. The firms use the funds that they invest on behalf of their clients and vote the proxies that, outside of a pooled index or mutual fund, investors would typically vote themselves. ESG critics have said that such practices undermine shareholder rights.
BlackRock has responded to this criticism by promising to give their clients the ability to vote the proxies associated with their stock shares. The firm began allowing some large institutional clients to vote their proxies last year and is preparing to open the option to more investors.
Ballotpedia tracks support for and opposition to the environmental, social, and corporate governance (ESG) investing movement. To learn more about arguments for, against, and about ESG, click here. For more information on reform proposals related to ESG policy, click here.