Delivering on our commitment to sustainability and stewardship
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
How do companies hold others accountable on sustainability?
On this episode of The Bid podcast, Sandy Boss, Global Head of Investment Stewardship, discusses how today's market environment has shifted company behavior and our approach to investment stewardship.
Q1 engagements at a glance
We engaged with 688 companies across a range of E, S and G topics detailed in our Q1 global engagement summary. Our engagements included, but were not limited to, the following top topics:
Governance: Board composition and effectiveness discussed 416 times, corporate strategy discussed 413 times, executive compensation discussed 281 times.
Environmental: Climate risk management discussed 343 times, operational sustainability discussed 297 times.
Social: Human capital management discussed 208 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.
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).
Encouraging SASB and TCFD aligned reporting
We are intensifying our focus and engagement with companies on sustainability-related issues and proactively promoting effective disclosures of climate-related risks. During our engagements, we advocate for disclosures aligned with the reporting frameworks developed by the Task Force on Climate related Financial Disclosures (TCFD) and the Sustainability Accounting Standards Board (SASB) and are already seeing results.
More transparency on voting
Voting is one of our core responsibilities as a fiduciary to our clients. To increase the transparency of our voting activities, we are:
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 essential component of our fiduciary responsibility. To read more about our Stewardship practices, please visit our global website.
