BlackRock, the largest asset manager and largest investor in fossil fuels in the US, is wielding its voting power with thousands of publicly traded companies this spring andholding its own annual shareholders’ meetingon May 21. It’s been a big year for BlackRock, which joined theClimate Action 100+,一个有影响力的气候shareholder advocacy group, back in January just before Chair and CEO Larry Fink’sannual letter to CEO’slaid out climate-related financial risks as a key long-term concern for shareholders. The next few weeks will show everyone if BlackRock really means business when it comes to climate action – its vote could make or break climate-critical resolutions at ExxonMobil, Chevron, and JPMorgan Chase.
The evolution of BlackRock’s climate commitments
In 2019, the Yes Men published a fake Larry Fink letter promising climate-friendly policies, including divestment from fossil fuel companies.
At the beginning of every year, CEO Larry Fink flexes the muscle of BlackRock’s$7 trillionin assets under management by sending a letter to public company CEOs outlining his priorities and concerns for the coming year. In 2018, Fink’s letter made waves in the investor community by declaring that companies shouldfocus on serving a social purpose. In 2019,Fink wrotethat this purpose was more important than short-term profits (although afantastic stuntby the Yes Men laid out a facetious, but much more ambitious plan for the company).
Fink’s2020 lettercalled on companies to better measure and disclose their climate-related financial risks. The letter pressured companies to disclose sustainability issues in line with theSustainability Accounting Standards Board(SASB) andTask-force on Climate-related Financial Disclosures(TCFD) recommendations. Fink alsodeclaredthat BlackRock was ready and willing to “vote against management and board members when companies are not making sufficient progress” on sustainability disclosures or business practices, and that BlackRock would be “exiting investments that present a high sustainability-related risk.” This is theletter, andstance, that’s put us on pins and needles – everyone is watching to see if BlackRockfollows throughon these commitments.
BlackRock’s disappointing track record on climate
BlackRock has ample opportunity in the coming weeks to encourage progressive climate action –voting againstJP Morgan Chase board memberLee Raymond(climate-denyingformer CEO of ExxonMobil), supporting climate action shareholder proposals atExxonMobilandChevron, and supporting shareholder proposals calling fortransparency on political spending and lobbying. Or BlackRock could do none of those things, as has traditionally been the case, and leave shareholder activists disappointed yet again.
BlackRock’s sizable investment in fossil fuels –$87.3 billion as of October 2019– makes it one of the three largest investors in fossil fuels, along with Vanguard and State Street. Perhaps in line with its historic investment strategy, the company has alackluster voting recordonclimate proposals. Aside from itsunexpected support for a 2017 resolutioncalling on ExxonMobil to report annually on what Paris-aligned climate policies would mean for its business, BlackRock has not backed many climate-related shareholder resolutions in recent years – in 2019 it supportedonly 15 percentof climate critical shareholder proposals it voted on.At least 16of these climate critical resolutions—including three at ExxonMobil—would have received majority support if BlackRock and Vanguard had voted for them. In fact, the BlackRocksupported management-backed proposalsat fossil fuel companies more often than it did at US equities overall.
BlackRock, as a publicly-traded company owned by shareholders, is also facing a climate shareholder proposal this year. Although three climate-related proposals were originally filed, the proposal to report on lobbying waswithdrawnafter the company madedisclosure commitments, as was the proposal toreport on ESG proxy voting. The BlackRock board hasunanimously recommendedthat shareholders oppose the remaining resolution, filed by As You Sow,asking the companyto report on how it intends to fully implement its stakeholder-centric view that companies have a social purpose. The board believes thatBlackRock already operatesin a fashion consistent with its principles.
Oversight of CARES Act stimulus funds
BlackRock’s climate commitments have also been in the news regarding the recent COVID-19 response and whether BlackRock will incorporate climate-related financial risks into its stimulus-backed bond investment decisions. The Federal Reserve, which acts as the central bank of the US,hired BlackRockto assist with part of the first CARES Act stimulus package. The asset manager will helpmanage the purchaseof billions of dollars worth of bonds in an attempt to stabilize the corporate bond market, which has been upturned by the pandemic. Due to BlackRock’s sizable fossil fuel investments and the need for a rapid transition to a low-carbon economy, agroup of US legislatorsandclimate NGOscalled for strict oversight of the funds and a commitment to building a resilient economy. In response,17 Senate Republicans, most fromfossil fuel-heavy states, are seeking toprohibit BlackRockfrom considering climate-related financial risks in administering bailout funds. This is a short-sighted approach given the obvious climate-related financial impacts we’ve seen in recent years fromrising sea levelsandextreme heat events.
How you can vote your conscience
You can告诉贝莱德的连任投票反对Lee Raymonddirectly! Follow the instructions in the link and have your voice be heard!
Your Stake’s online petition platform for investors is another valuable resource. Users sign up with their retirement accounts to participate in campaigns asking companies to act on environmental and corporate accountability issues. Involvement from ordinary investors – which likely means you – is crucial to the Your Stake effort and letting asset managers know your priorities. UCS and Your Stake haveset up a campaignencouraging asset managers to vote for better climate policy – if you have a moment, we’d like you to take a look at it. There are opportunities to add your voice to thousands of others and have it be heard by Wall Street.