BlackRock Inc., the world’s largest asset manager, has vowed to back more shareholder resolutions on climate change and social issues in 2021, as pressure remains on the powerful Wall Street influencer to back up a pledge from chief executive Larry Fink to act to keep global warming from derailing the financial system.
With $7.8 trillion under its watch and a stake in many publicly-traded companies, the fund giant
BLK,
has grabbed the investment world’s attention on global warming and other social issues, including how significant a role climate change and other ESG factors should play in creating the most return for investors, as well as avoiding exposure to stranded assets, for instance, as global energy use diversifies away from fossil fuels.
More institutional investors are taking steps to cut ties with fossil fuels or set targets for net-zero emissions among their holdings, including the New York state pension fund just this week.
BlackRock said in a report out Thursday that supporting investor resolutions will play an “increasingly important role in our stewardship efforts around sustainability.”
The asset manager focused on 440 carbon-intensive companies during the last proxy season ended June 30, but will now expand that scrutiny to 1,000 companies in 2021, the report said. The new universe of 1,000 companies represents 90% of major global emissions.
But BlackRock, say its critics, has still been too slow to address shareholder concerns on climate. The asset manager supported fewer environmental votes at shareholder meetings in the 12 months to June compared with the previous year, according to data from Proxy Insight.
A network of climate-activist groups, including the notable Sunrise Movement, named BlackRock’s Big Problem tweeted a response to the announcement.
“One: BlackRock has a history of talking a big game on climate action in the press, but holding back when the public eye looks elsewhere… Two: BlackRock isn’t actually demanding that companies do what they can to halt climate change… it’s demanding that companies merely report on *risks to them* from climate change. As the world’s largest manager-owner of corporate assets, BlackRock can compel the companies to make *actual* emissions reductions and protect forests —asking that they just report on their progress isn’t good enough,” they wrote.
“BlackRock has made a huge U-turn on climate — the result of years of intense activist and client pressure. But Blackrock, you still have a big problem. You can be a transformative leader on climate. But you still need to step it up.”
Sandy Boss, head of investment stewardship at the asset manager just since May, told the Financial Times that BlackRock had traditionally given companies the “benefit of the doubt” that they treated issues such as climate change seriously, but there is a “sense of urgency now” that businesses must take faster action. She has said that the asset manager often engages privately with companies on climate matters. She also said that shareholder proposals have gotten more specific with how they want companies to show climate-risk management plans, clarity that the asset manager could find easier to work with.
BlackRock did not immediately return a request for comment.
