BlackRock’s stewardship team has signalled it will be focusing on companies’ responses to COVID-19 and their approaches to racial inequality, after the investment giant’s engagements on governance outflanked environmental or social issues during the last quarter.
BlackRock’s Investment Stewardship report for the second quarter saw a 22 per cent rise in company engagements compared to the year before – it engaged with 812 companies, interacting multiple times with 13 per cent of them.
More engagement themes sat in the governance realm than any of the other ESG factors, with there being 920 governance themes, 370 in environmental and 308 in social.
Board composition and effectiveness were discussed 504 times, corporate strategy was talked about 383 times and executive compensation was raised 379 times.
Meanwhile, themes such as climate risk management were discussed 272 times, operational sustainability was talked about 245 times and human capital management was spoken about 236 times.
BlackRock voted against one or more management recommendations at 45 per cent of the shareholder meetings it attended in the APAC region during the second quarter and 43 per cent worldwide.
Looking ahead, BlackRock has signalled it will be “increasingly disposed” to vote against management should companies fail to appropriately balance the needs to shareholders.
It has also called attention to race and gender diversity on boards.
BlackRock also identified 244 companies making insufficient progress integrating climate risk into their business models or disclosures, as outlined in a recent sustainability report.
The group has threatened to punish the companies’ management with voting action, if they do not make up for the lack of progress on climate risk.
Sarah Simpkins is a journalist at Momentum Media, reporting primarily on banking, financial services and wealth.
Prior to joining the team in 2018, Sarah worked in trade media and produced stories for a current affairs program on community radio.
You can contact her on [email protected].
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