Don’t Fear the ESG Boogeyman

Welcome back to Troop’s Insights newsletter. We build tools for modern asset stewardship and we think out loud. In this space you’ll find our latest analysis of the corporate governance space, plus peeks into our product suite’s development. Consider it a conversation about the future.

BlackRock Expands Access to Voting Choice Platform

In an effort to give its clients a say in the proxy voting process, BlackRock offers a service called—fittingly enough—BlackRock Voting Choice, which lets investors choose their own voting policies for their portfolios, rather than relying entirely on BlackRock’s choices. Certain institutional investors have been eligible for the program since 2022, but now, as BlackRock continues to face criticism from right-wing politicians over its supposedly “woke” voting agenda, the firm is opening it up to some retail clients: specifically, the 3 million accounts invested in the iShares Core S&P 500 ETF (IVV). 

As Investment News sagely notes, the actual policy choices themselves are still fairly limited; as an eligible client, you can pick between a few different boilerplate options from ISS and Glass Lewis.

Learn more about Troop’s approach to deepening voting policy here.

How Much Lobbying Is Too Much?

The Center for Political Accountability, a non-profit that pushes for transparency around corporate lobbying and election spending, recently put out a guide to help companies keep themselves on the right track. It’s called the Guide to Becoming a Model Code Company, and lays out exactly what a company’s board has to do to get the CPA’s seal of approval. It turns out that it’s not all that demanding: the CPA isn’t asking for disclosures of corporate PAC spending. What it does ask for is “disclosure of all direct political contributions to candidates, parties, or political committees made with corporate treasury funds,” as well as assurance that the board is looking into whether the politicians it supports are compatible with company values.

The timing of this release is also an implicit warning to directors—one last kick in the pants before the chaos of the 2024 presidential election.

Culture Wars and Climate Denialism

The word “Orwellian” gets deployed far too much these days. Still, it can pack a punch in the right context, as in this new article from the legal scholar Leo E. Strine, Jr., “Ignorance is Strength: Climate Change, Corporate Governance, Politics, and the English Language,” which argues that the “so-called culture wars have fully penetrated the debate over climate change and corporate governance, and in a distinctly Orwellian way, involving the manipulative use of language, denial of fact, and process of doublethink that Orwell warned were all inimical to freedom.”

The idea is that, if politicians can’t even accept basic realities—specifically, that the environment is in fact changing as a result of human interference—then it’s hard to imagine a future where we can all sit down and develop smart corporate governance approaches to those realities. It’s not just about “wokeness” or the “ESG” boogeyman: these are real issues that affect every human being, and every company on the planet.

Strine sums it up in brief: “A free society cannot function if political leaders and citizens do not accept that two plus two make four and work out their legitimate differences over how to address that reality.”