The investment giant’s latest stewardship report highlights that climate action is becoming an increasing point of agitation between company boards and investors, accounting for more than 2,300 of the group’s board engagements last year.
Blackrock’s investment stewardship report for 2020-21 revealed that the world’s biggest asset manager had engaged with companies 2,330 times around climate and natural capital issues, compared with 2,200 for broader strategy issues and 2,150 for board quality and effectiveness.
Of the more than 1,000 companies in Blackrock’s ‘climate-focus universe’ – which had been deemed by the investment manager to have the greatest risk to their operations from climate change – the group said more than 300 were not currently taking sufficient action on climate.
“We communicated our position throughout the past year that we expect companies to demonstrate how climate and sustainability-related risks are considered and integrated into their strategy,” Blackrock said.
“For companies in our climate universe, we have more rigorously assessed their climate action plans and risk disclosures, voting against management when we believe accelerated progress is necessary to best serve the long-term economic interests of our clients.”
The group voted against 255 directors for “climate-related concerns that could negatively affect long-term shareholder value”, according to the report.
Diversity also emerged as a key theme, with Blackrock voting against 1,862 directors at 975 companies for concerns related to board diversity. The trend was particularly pronounced for companies in the Americas region, for which diversity was the top reason to vote against a board director.
“We ask that boards explain their approach to ensuring diversity among directors and how board composition aligns with the company’s strategy and business model,” Blackrock said.
“When disclosure is insufficient, particularly in markets where we consider demographic diversity a priority, we have been raising the issue and where gender diversity remains inadequate, we typically vote against the re-election of members of the committee responsible for nominating directors.”
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