14 July 2020
Blackrock takes voting action against companies on climate grounds
Whilst Blackrock has historically been accused of greenwashing, in January 2020 CEO Larry Fink announced a strengthening of their climate policies. In a letter to chief executives he said that his firm would avoid investments in companies that “present a high sustainability-related risk” and that the firm would move more aggressively to vote against management teams that are not making progress on sustainability.
Blackrock has now provided clients with a new report outlining how it is ramping up its climate-related engagements with businesses. According to the report 244 of the companies in Blackrock’s portfolio are making insufficient progress integrating climate risks into their business models and/or disclosures of which 53 were found to have repeatedly ignored the climate-related demands of investors. Blackrock has therefore taken voting action against them, either by calling for executive accountability or backing new shareholder proposals which would lead to stricter environmental requirements. See the Edie report in full here.
Blackrock is urging companies to produce reports in line with the Task Force on Climate-related Financial Disclosures (“TCFD”) – a suite of recommended reporting actions that urge companies to review their climate-related risks and opportunities and to assess how this could impact upon future strategy.
Calls from Blackrock are in line with 340 investors with nearly $34 trillion in assets under management who are asking companies to report under the TCFD recommendations and in our view is further evidence that the tide for investors is changing – climate considerations are likely to become an integral part of finance as we move toward a more climate aware future.
For more information on TCFD and how the recommendations may impact upon your business, you may find our TCFD “Coffee Break Briefing” a useful starting point – this can be accessed here.