Investment Stewardship

2022 policies update

Feb 23, 2022
  • BlackRock

BlackRock’s purpose is to help more and more people experience financial well-being. We manage assets on behalf of institutional and individual clients, the majority of whom are investing to meet long-term financial goals, such as a secure retirement. Investment stewardship is central to our fiduciary responsibilities to our clients to advance their long-term economic interests. We engage with companies to promote corporate governance standards and sustainable business models that we believe contribute to the durable, long-term profitability our clients depend on to meet their financial goals. At BlackRock we take this responsibility very seriously and, consistent with our leadership position in the industry, have invested to establish one of the largest investment stewardship teams.

Our Policy Updates in Context

Each year, BlackRock Investment Stewardship (BIS) reviews and updates our Global Principles and market-specific proxy voting guidelines. These documents set out the core elements of corporate governance that guide our investment stewardship activities globally and within each regional market, including when voting at shareholder meetings. Our policies are informed by the fact that many of BlackRock’s clients are investing to achieve long-term financial goals.

BIS is committed to constructive, long-term-focused engagement that supports companies in their efforts to deliver durable, long-term value to shareholders. As companies’ operating environments change in response to consumer trends, public policies, and macroeconomic factors – and corporate governance standards evolve in response – so must our policies. At the same time, we recognize that companies are facing continued uncertainty and pressures in a challenging business environment.

We update our Global Principles and regional voting guidelines annually to reflect changes in market standards and to help companies understand our views on emerging corporate governance issues. In 2021, we made updates to our policies in line with BlackRock’s intensified focus on sustainability across all our investment activities on behalf of clients. In this context, our 2022 policy updates are more incremental, seeking to reflect our latest views on certain governance issues and incorporating insights gained from company engagements, client feedback, regulatory developments, and BlackRock and third-party research. Below we outline five notable updates we have made to our 2022 Global Principles, which are:

1. Climate risk
We continue to ask that companies disclose a net zero-aligned business plan that is consistent with their business model and sector. For 2022, we encourage companies to demonstrate that their plans are resilient under likely decarbonization pathways, and the global aspiration to limit warming to 1.5°C. We also encourage companies to disclose how considerations related to having a reliable energy supply and just transition affect their plans.

2. Board diversity
We are strengthening our focus on diversity of personal characteristics on boards, which in our view should aspire to have meaningful diversity of membership, at least consistent with local market regulatory requirements and best practices. We recognize that building a strong, diverse board can take time.

3. Sustainability reporting
Given continuing advances in sustainability reporting standards, in addition to our ask that all companies report in alignment with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD), we are evolving our perspective on sustainability reporting to recognize that companies may use standards other than that of the Sustainability Accounting Standards Board (SASB), and reiterate our ask for metrics that are industry- or company-specific.

4. ESG in executive compensation
We highlight that if environmental, social, and governance (ESG) criteria are included in executive compensation programs, those metrics should be rigorous, aligned with a company’s strategy and business model, and linked to company performance.

5. Changes to corporate form
We introduce our position that companies or shareholders proposing to change a company’s corporate form (e.g., public benefit corporation) should put the measure to a shareholder vote, if not already required to do so under applicable law. Managers or shareholders proposing the changes should clearly articulate in their proposal how shareholders and different stakeholders would be impacted.

To learn more about our 2022 policies updates, please see the full summary:

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