Larry Fink has been challenged by responsible investment campaigners to force BlackRock to take a tougher line on climate change when dealing with the companies in which it invests.
The chief executive of the world’s biggest money manager writes well-publicised letters to corporate bosses each year, while BlackRock has warned that investors can no longer ignore the risk of climate change in their portfolios.
Yet a group of campaigners has accused the $6.4tn fund company of lagging behind other large investors with regard to supporting climate-related shareholder resolutions.
“The words of the world’s largest asset manager carry weight and its contribution to this narrative is welcome,” said Jeanne Martin, senior campaigns officer at ShareAction, one of the 12 campaign bodies that have written to Mr Fink. “However, the danger lies in these words not being followed up with meaningful action.”
The signatories to the letter to Mr Fink cited analysis of shareholder votes from the 50/50 Climate Project, a group that helps institutional investors engage with company boards on climate change, as evidence that BlackRock was not pushing as hard as it could.
BlackRock supported only 23.1 per cent of climate-related shareholder proposals at S&P 500 oil, gas and utility companies in the spring 2018 season of annual meetings, according to a report from 50/50. This made it one of the lowest scorers of 13 asset managers analysed.
BlackRock was also one of the worst performers in a report examining the voting record of 24 global asset managers on climate proposals at carbon-intensive companies in 2017.
It supported 14 per cent of resolutions pressing companies to disclose how they would adapt to global temperatures rising 2C, making it one of the lower scorers, and only 9 per cent on climate-related resolutions more generally, putting it at the bottom.
“BlackRock has legal obligations as a fiduciary for the investments of millions of people around the world. If it does not take stronger action to protect investors from climate risk in 2019, it will be failing to fulfil those duties,” said James Thornton, chief executive of ClientEarth, an environmental legal group involved in the campaign.
The letter was sent to Mr Fink ahead of the BlackRock’s chief’s missive to corporate chief executives.
BlackRock said it prioritised climate risk in its discussion with companies.
“Our process emphasises engagement before voting because we believe that is the most effective way to achieve productive outcomes for our clients’ long-term interests,” it said, adding that its stewardship team engaged with more than 230 companies globally on climate risk in the year to June.
This was “significantly more than the approximately 30 companies that had shareholder proposals on the agenda of their shareholder meetings,” the company said.
The 12 signatories called on BlackRock to vote in favour of shareholder proposals requesting that companies move towards aligning their businesses with the Paris climate goals and vote against the reappointment of directors of companies that refuse to do so.
Proposals they highlight include one filed by the pension funds of New York state and the Church of England for ExxonMobil, the world’s largest listed oil company, to set targets for cutting its greenhouse gas emissions.
They also asked BlackRock to back proposals requesting greater transparency on a company’s spending in relation to climate lobbying and to reject remuneration policies where companies did not agree to link incentives to climate risk.
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