Noting in its new "approach to sustainability" report that it uses the same stewardship tools of engagement and voting on sustainability issues as with other corporate governance matters, BlackRock indicates it took voting action (typically in the form of votes against directors or shareholder proposal support) this year against 22% of 244 companies it identified as not making sufficient progress on integrating climate risk into their business models or disclosures. The balance of the companies reportedly are "on watch" and should be prepared for similar voting action in 2021 if they fail to make substantial progress on their climate disclosures prior to their annual shareholder meetings.
BlackRock focuses its climate-related stewardship efforts on sectors and companies where climate change is deemed to be a material risk to the investment. Its year-over-year engagement on environmental matters increased 289% from 2018-2019 to 2019-2020, as compared to increases of 146% and 47% over the same time period for social and governance topics, respectively.
Once BlackRock puts a company "on watch," it purportedly typically gives the company 12 - 18 months to make progress before taking an adverse voting action.
See our prior reports: "BlackRock to CEOs: Sustainability Takes Center Stage," "BlackRock Joins Climate Action 100+," "BlackRock Details Sustainable Investment Vision," "BlackRock Releases 2020 Engagement Priorities," and "BlackRock Votes its Climate Policy/Views" and this Pensions & Investments article. This post first appeared in the weekly Society Alert!