BlackRock punishes 53 high-emissions companies over climate inaction, puts 191 more on watch
BlackRock has revealed that it took voting action against 53 companies on climate grounds in the first half of 2020, including ExxonMobil and Air Liquide.
The asset manager provided clients with a new report on Tuesday (14 July), outlining how it is ramping up its climate-related engagements with businesses this year. BlackRock notably changed its investment stewardship targets and processes earlier this year, after joining Climate Action 100+.
According to the report, 244 of the companies in BlackRock’s portfolios are making insufficient progress integrating climate risks into their business models and/or disclosures.
Of these companies, 53 were found to have repeatedly ignored the climate-related demands of investors. As such, BlackRock took voting action against them, either by calling for executive accountability or backing new shareholder proposals which would lead to stricter environmental requirements.
The likes of Chevron, ExxonMobil, Air Liquide, Daimler and Volvo are among this cohort.
“When we vote against a company, we do so with a singular purpose: maximizing long-term value for shareholders,” the report states. “We believe sustainability is core to value creation for our clients.”
The remaining 191 companies have been “put on watch”, meaning they face voting action in 2021 if improvements are not made. BlackRock is urging firms in this cohort to comply with the Task Force on Climate-Related Disclosures’ (TCFD) recommendations and to produce their sustainability reports in line with SASB standards.
BlackRock has historically faced criticism over its handling of the sustainability performance of the firms it invests in. The new report reveals that BlackRock engaged businesses in environmental discussions almost four times as much between June 2019 and June 2020 as it did the year prior. Engagement on social issues was also up by 146% year-on-year.
“Going forward, we will continue to review our process for engaging and voting on climate risk and other sustainability-related issues,” the report summarises. “We have made important progress heightening our focus on sustainability, but we are also committed to constantly enhancing our approach in order to protect our clients’ long-term investments.”
A new normal for green finance
BlackRock's report comes on the same day that new research on finance's place in creating a "just" low-carbon recovery from Covid-19's economic impact was published.
Produced by the London School of Economics and University of Leeds, in association with the All-Party Parliamentary Group (APPG) on Sustainable Finance, UK100 and HSBC, the research paper urges banks and asset managers to align their business models with net-zero more rapidly and holistically and to include social considerations in their climate planning.
BlackRock at edie's Sustainable Investment Digital Conference
edie is launching its first bespoke sustainability conference focused on green finance, with experts from ING, BlackRock, BNP Paribas and more set to discuss investment and the green recovery at the Sustainable Investment Digital Conference on 7-8 September 2020.
The two-day digital event will feature a myriad of expert panel discussions, breakouts and deep dives into key green finance themes - plus opportunities to network virtually with delegates.
For further information, sponsorship inquiries and registration, click here.