Delivering on our commitment to sustainability and stewardship

Delivering on our commitment to sustainability and stewardship

Our 2021 stewardship expectations

Each year, BlackRock Investment Stewardship reviews and updates our global principles and market-level voting guidelines. The rationale for any change is to ensure that our policies are aligned with our commitment to pursuing long-term financial returns for our clients as shareholders. The updates are the natural next step following on from the commitments BlackRock made this past January.

Among other changes, for 2021 we are asking companies to demonstrate:

  • Board and workforce diversity consistent with local market best practice
  • An understanding of key stakeholders and their interests
  • Plans to align their business with the global goal of net zero greenhouse gas (GHG) emissions by 2050

See an overview of our updated policies in our report below.

Our 2021 stewardship expectations

Our commitment to transparency

In January we committed to providing our stakeholders and clients more clarity and insight into our investment stewardship practices.

Since then, we've taken action to deliver on these commitments, with increased transparency of our stewardship approach and new and enhanced reporting on our engagement and voting actions.

Our approach to sustainability with stewardship

While we've been speaking with companies for years on sustainability issues, this year we've intensified our focus and dialogue with companies facing material climate- and sustainability-related risks.

We're focusing our efforts on companies and sectors where climate change and other sustainability factors pose the greatest risk to our clients' investments and working to create long-term value for shareholders.

Read our special report to learn more about our approach to sustainability.

Executive summary

Full report

Increased transparency

Engagements and voting are two of our core responsibilities as a fiduciary to our clients. To increase the transparency of our stewardship activities, we are:

Quarterly vote disclosures
Quarterly vote disclosures
Publishing quarterly voting disclosures
Vote bulletins
Vote bulletins
Explaining our voting decisions for specific votes promptly through vote bulletins
Engagement with clients
Global engagement summary
Publishing quarterly engagement activity with topic-level detail

Q3 engagements at a glance

We engaged with 490 individual companies across a range of E, S and G topics as detailed in our Q3 Global Quarterly Report and our Q3 global engagement summary. Our engagements included, but were not limited to, the following topics:

Governance: Board composition and effectiveness discussed 260 times, corporate strategy discussed 277 times, executive compensation discussed 200 times.

Environmental: Climate risk management discussed 272 times, operational sustainability discussed 218 times.

Social: Human capital management discussed 213 times.

Holding directors accountable

We believe holding directors accountable is one of the most effective ways to encourage change at a company. Given the groundwork already laid through past engagements and the growing investment risks surrounding sustainability, we will be increasingly disposed to vote against the re-election of directors when companies have not made sufficient progress.

Learn more

Refreshing our engagement priorities

Each year, we prioritize our work around engagement themes that we believe will encourage sound governance practices and deliver the best long-term financial performance for our clients. We are providing additional transparency this year by mapping our Engagement Priorities to the UN Sustainable Development Goals (SDGs).

SDGs
SDGs
We believe there is a strong alignment between many of the topics we discuss with companies and aspects of those SDGs in which the private sector has a role to play.
Key performance indicators
Key performance indicators
We are incorporating key performance indicators to each Engagement Priority as measures to hold boards accountable.

Endorsing a Convergence of Reporting Standards

Over the past several years, BlackRock has been advocating for more widespread and standardized adoption of sustainability reporting. We believe that enhanced reporting is critical to the ability of companies and investors to take into consideration material environmental, social and governance risks and opportunities.

It is this conviction that is driving our call for the convergence of the different private sector reporting frameworks and standards to establish a globally recognized and adopted approach to sustainability reporting.

We believe the optimal outcome and the one most likely to succeed is the one proposed by the IFRS Foundation that would establish a sustainability standards board working with the existing initiatives and building upon their work. Until a global standard is established, we will continue to advocate for the reporting frameworks developed by the Task Force on Climate related Financial Disclosures (TCFD) and the Sustainability Accounting Standards Board (SASB).

Learn more

Engaging with Climate Action 100+

BlackRock joined Climate Action 100+, an investor-led initiative that aims to ensure the world’s largest corporate greenhouse gas emitters take adequate action on climate change. This was a natural evolution of our stewardship efforts and engagement on climate issues.

We view the world through our clients’ eyes
Investment Stewardship is an essential component of our fiduciary responsibility. To read more about our Stewardship practices, please visit our global website.
We view the world through our clients’ eyes