Blogs

BlackRock's "2021 Stewardship Expectations - Global Principles and Market-Level Voting Guidelines" include a number of noteworthy changes from and updates to prior year expectations.

Key takeaways for the US, with reference to BlackRock's updated Global Principles and updated Proxy Voting Guidelines, include:

• Shareholder proposals: Voting on shareholder proposals will play an increasingly important role in BlackRock's stewardship efforts around sustainability (see pages 13-15 of the Proxy Voting Guidelines). As such, where BlackRock agrees with the intent of a shareholder proposal addressing a material business risk, and if it determines that management could do better in managing and disclosing that risk, it will support the proposal. BlackRock may also support a proposal if management is on track but it believes that voting in favor might accelerate the company's progress. See page 10 of the Global Principles.
• Transition to a low-carbon economy: Companies in BlackRock's expanded focus universe will be expected to disclose a business plan aligned with the goal of limiting global warming to well below 2 degrees Celsius, consistent with achieving net zero global GHG emissions by 2050, consistent with the recommendations of the TCFD. See page 9 of the Global Principles and page 14 of the Proxy Voting Guidelines.
• Key stakeholder interests: BlackRock will expect companies to report on how they have determined their key stakeholders and considered their interests in business decision-making. BlackRock also expects companies to effectively address adverse impacts that could arise from their business practices and mitigate material risks with appropriate due diligence processes and board oversight; beginning in 2021, it will prioritize a focus universe of approximately 150 companies whose business practices may have resulted in adverse impacts or reflect insufficient management of ‘social’ sustainability risks. See page 10 of the Global Principles and page 14 of the Proxy Voting Guidelines.
• Diversity, equity, and inclusion: BlackRock expects companies to disclose their workforce diversity, including demographics such as race, gender, and ethnicity, with disclosure of EEO-1 data, and the actions they are taking to advance DE&I and support an engaged workforce. See page 14 of the Proxy Voting Guidelines.
• Board composition: Among other things, BlackRock expects board diversity disclosure that includes director race and ethnicity to allow investors to make informed diversity assessments. It will also look more closely at average director tenure to ensure a balance of seasoned director knowledge and experience and new director fresh perspectives. See page 6 of the Global Principles and page 6 of the Proxy Voting Guidelines.
• Alignment of political activities with stated policy positions: BlackRock will seek to confirm through engagement or disclosure that companies' corporate political activities (including indirectly through trade association positions) are consistent with their public statements on material and strategic policy issues, as further detailed below. See pages 14-15 of the Proxy Voting Guidelines.

See also these articles: "BlackRock vows to back more shareholder votes on climate change" (Financial Times) and "BlackRock to step up sustainability action in 2021" (Pensions & Investments); BlackRock's "Approach to engagement on board diversity,"  "Approach to Engagement on Climate Risk," "Approach to Engagement on TCFD and SASB Aligned Reporting," "Approach to Engagement with Agribusiness Companies on Sustainability," "Emissions, Engagement, and Transition to a Low-Carbon Economy," "Approach to Engagement on Strategy, Purpose and Culture," "Overarching Approach to Executive Compensation," and "Approach to Engagement on Human Capital"; and additional information and resources on our Institutional Investors page.

BlackRock Seeks Disclosure of Corporate Political Spending & Activities

Further to the foregoing, BlackRock's new perspective on corporate political activities puts companies on notice that the investor will be evaluating the alignment of their political contributions and lobbying activities - including indirectly via their participation in industry and trade associations that engage in political or lobbying activities - with their publicly stated positions on material policy issues, and that it may support shareholder proposals seeking additional disclosure or justifications of any inconsistencies. The commentary further calls for corporate website disclosure that facilitates investors' understanding of how the company's communicated policy priorities are consistent with its direct and indirect political contributions and lobbying activities.

Suggested website disclosure includes: 

• The purpose of the company’s political contributions and engagement in lobbying activities and trade associations, and how this activity aligns with the company’s strategy and/or goals of public participation, including the company’s legislative and regulatory priorities.
• How the company engages in these activities (e.g., Government Relations/Policy Team).
• The company’s political contribution and lobbying policy, including management and board responsibilities.
• The board’s oversight process for monitoring political contributions and lobbying activities.
• If the company has established a PAC, and if so, how the PAC’s spending furthers the aims of the company’s political contributions.
• Trade association memberships for which dues exceed a predetermined threshold that requires board approval or oversight.
• An affirmation of compliance with federal and state laws governing political activities and lobbying.

Access additional resources on our Political Contributions and Disclosure page.