DIRECTIVE 2007/36/EC AS AMENDED BY DIRECTIVE 2017/828

Education – Introduction FAQs

    • Ensure that all investors are incentivised to participate in the long run to the life of companies in which they invest in order to make a more long-term sustainable EU economy.
    • Ease the identification of the shareholders of EU listed companiesby calling on intermediaries to communicate information regarding shareholders upon company’s request (name, contact, registration number, number of shares).
    • Improve involvement of shareholders in corporate governance by calling on companies to provide their shareholders with information on voting in general meetings.
    • Encourage transparency in the investment strategy by calling on institutional investors and asset managers to disclose relevant information.
    • Influence directors’ remuneration by involving the shareholders (through voting) in the company’s process of establishing and publishing remuneration policies and reports on their implementation.
    • SRD II puts obligations on: EU companies with shares traded on EU regulated markets; EU life insurers and occupational pension schemes; EU asset managers; EU proxy advisors; and ‘intermediaries’ both in and outside the EU in so far as they provide services relating to EU listed shares.
    • BlackRock will continue to work with institutional investors to support them in meeting their obligations under SRD II.  BlackRock Investment Stewardship (BIS) publishes its engagement policy and discloses its engagement activity on its website
    • BlackRock is committed to providing transparency into our investment stewardship activities. Learn more about how we are delivering on our commitment here.
    • As a fiduciary investor on behalf of our clients, our obligations to our clients is of critical importance.  We aim to enhance our disclosures to clients to provide transparent information about the financial and non-financial performance of investee companies and how our investment strategies meet client needs.
    • We will work with each institutional investor to ensure that they have the information they require to meet their obligations at the time required.
  • BlackRock makes available the following disclosures to help asset owners (institutional investors) evaluate how as an asset manager for your portfolio or the BlackRock funds you are invested in, we act in your best long-term interests.

    • How BlackRock’s strategy and its implementation
    • complies with the agreements entered into with the Institutional Investor and
    • contributes to the medium to long term performance of the assets or the fund the Institutional Investor is invested in
    • Whether and how BlackRock makes decisions by evaluating the medium to long-term performance of the investee company, including non-financial performance
    • Reporting on the key material medium to long term risks associated with the investments
    • Use of proxy advisors for engagement activities
    • BlackRock policy on securities lending and how it is applied to fulfil engagement activities, particularly at the time of general meetings
    • Conflicts of interests that arose in connection with engagement activities and how BlackRock dealt with them
    • Portfolio composition, turnover and turnover costs
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  • BlackRock is a global investment manager, serving its clients with a commitment to help more and more people plan for their financial future. Our investment philosophy is centered on understanding each client’s specific objectives, constraints and risk tolerance; from this our investment specialists partner with each client to design customized investment policies. 

    BlackRock is committed to long-term sustainable investing and so we incorporate material Environmental, Social and Governance (ESG) information in our investment decision process with the objective of improving the long-term financial outcomes of our clients’ portfolios.

    Learn more about BlackRock Sustainable Investing here. BlackRock’s disclosure under the Sustainable Finance Disclosure Regulation regarding sustainability risk integration is available here.

    BlackRock has dedicated client services, strategists and portfolio managers focused on delivering solutions to its clients. These professionals leverage BlackRock’s centres of expertise to deliver market leading solutions in line with the arrangements entered into with each client (in particular the investment objectives and guidelines set out in the investment management agreement entered into with segregated account clients).

    BlackRock provides each segregated account client with reports on its investment activity. This activity is carried out according to the investment guidelines of your segregated mandate.  The periodic statements also provide information on the performance of your segregated account.

    As an essential component of our responsibility to our clients, we engage with companies to advocate for the sound corporate governance and business practices that drive the sustainable, long-term financial returns that enable our clients to meet their investing goals. We use our voice as shareholders to encourage companies to focus on material issues, like climate change, the fair treatment of workers, and racial and gender equity, as well as financial performance.

  • As a BlackRock client your periodic reports detail the composition of your portfolio.

    The turnover of equities within a portfolio will vary in relation to the investment strategy.  The turnover of equities and other securities within your portfolio is detailed within your portfolio transaction reports included in the periodic reporting you receive from us.

    The transaction costs associated with the turnover of financial instruments within your portfolio are provided in accordance with MiFID within the ex-post cost disclosure of your statements.

  • ESG integration is part of both our active investment process and index investment processes and oversight. BlackRock has a consistent framework for ESG integration that also permits a diversity of approaches across different investment teams and strategies. ESG considerations that are material will vary by client objectives, investment style, sector, and market trends. Depending on the nature of the strategy of the fund or segregated account, which influences the assessment and materiality of the following considerations, when making investment decisions, we consider long-term financial forecasts of investee companies. These are developed using a combination of both market (consensus) estimates and the views of portfolio managers as to how the financial performance of the company is likely to develop over time. For our public market strategies, we are continuously expanding access to high quality ESG data sources.  In addition to third party data, we have developed proprietary measurement tools to deepen our investors’ understanding of material ESG risks.

    Fundamental investment teams meet with company leadership, project sponsors, and other entities, with the BlackRock Investment Stewardship team when appropriate, to support investment research, including of material sustainability issues. Systematic investors and index portfolio engineers rely on the BlackRock Investment Stewardship team to conduct engagements with portfolio companies to drive the implementation and oversight of best practices in material sustainability areas to support long-term financial performance.

    In our index investments business, we work with index providers to expand and improve the universe of sustainable indexes, and our investment stewardship processes encourage the companies in which our clients are invested to manage and disclose material sustainability risks effectively.

    All investment teams have an integration statement which explains to what degree ESG considerations are included in the investment process. Portfolio managers have access to ESG research, data and insights to inform investment decisions.  Sustainability issues can contribute to a company’s long-term financial performance, and so further incorporating these considerations into investment research, portfolio construction and portfolio review can help enhance long- term risk adjusted returns. See more on ESG integration here and BlackRock’s disclosure under the Sustainable Finance Disclosure Regulation regarding sustainability risk integration is available here.

    Throughout the investment process a wide range of risks are considered by BlackRock.   Whilst the risks identified may not be exhaustive, fund offering documentation and segregated account client reporting further detail applicable material risks.

    BlackRock Investment Stewardship’s activities are focused on maximizing long-term value for our investors.  BlackRock Investment Stewardship does this through engagement with boards and management of investee companies and, for those clients who have given us authority, through voting at shareholder meetings. In particular BlackRock Investment Stewardship  has a focus on board quality and effectiveness, climate and natural capital, strategy, purpose and financial resilience, incentives aligned with value creation and company impacts on people (more details here).

  • BlackRock Investment Stewardship subscribes to two global research providers and several market-specific providers, as an input to support our research capabilities. However, our voting and engagement analysis is determined by several key inputs including a company’s own disclosures and our record of past engagements. BlackRock does not follow any single proxy research firm’s voting recommendations. Further information can be found within BlackRock Investment Stewardship philosophy and approach.

  • BlackRock’s approach to the balance between securities lending and proxy voting is driven by our clients’ long-term economic interests. The decision whether to recall securities on loan for voting purposes  is based on a formal analysis of the anticipated revenue to the client from the shares on loan compared to the assessed economic benefit of casting votes. Generally, we expect that the likely long-term economic benefit to clients of casting votes would be less than the securities lending income. This is either because, in our assessment, the resolutions being voted on are routine and will not have significant economic consequences or because the outcome would not be affected by BlackRock voting the marginal holding of loaned securities. More detail on our approach to this assessment can be found here:

     From time to time, BlackRock Investment Stewardship may determine that the expected near- and long-term economic benefit of voting clients’ entire holding is greater than the anticipated lending revenue. We do not recall shares on loan to vote unless we can make the case that the optimal voting outcome would be economically beneficial for clients and voting all eligible shares in BlackRock’s portfolios would increase the likelihood of achieving that outcome.

    Periodically, BlackRock reviews our process for determining whether to recall securities on loan in order to vote and may modify it as necessary.

  • BlackRock Investment Stewardship maintains policies and procedures that are designed to prevent undue influence on BlackRock’s proxy voting activity. Such influence might stem from any relationship between the investee company (or any shareholder proponent or dissident shareholder) and BlackRock, BlackRock’s affiliates, a BlackRock advised fund or its affiliate, or BlackRock employees.  There are a number of situations where BlackRock determines not to vote itself due to regulatory restrictions or a perceived or actual conflict of interest. In such cases, BlackRock uses an independent third party, referred to as an independent fiduciary, to instruct the votes on our clients’ holdings. The list of companies for which BlackRock appoints an independent fiduciary is managed by BlackRock’s Legal and Compliance team.

    BlackRock Investment Stewardship appointed Sustainalytics to act as BlackRock’s independent fiduciary in making proxy voting decisions. In selecting Sustainalytics, BlackRock has reviewed its suitability against the characteristics outlined in our statement on conflicts of interest and proxy voting best practices. Sustainalytics makes voting decisions based solely on BlackRock’s publicly available proxy voting guidelines, which aim to advance clients’ long-term economic interests, and information disclosed publicly by the relevant companies. BlackRock cannot influence Sustainalytics’ voting determination and does not know their voting decision prior to Sustainalytics providing our proxy voting agent with vote instructions.

    As detailed in our statement on conflicts of interest, BlackRock Investment Stewardship’s oversight process in relation to Sustainalytics’ role is to review annually, after peak shareholder meeting season, the votes cast by it to ensure that they reflect BlackRock’s published voting guidelines. The team reports the findings of the review to BlackRock’s Investment Stewardship Global Oversight Committee, a risk-focused committee comprised of senior representatives across BlackRock, including from various BlackRock investment teams. The Committee is responsible for confirming the reappointment of BlackRock’s independent fiduciary. The process also involves discussing with Sustainalytics any votes that seemed inconsistent with BlackRock’s guidelines and to explain any changes to voting guidelines planned for the following year.

  • As a fund investor, BlackRock makes available to you fund prospectuses, KIID/KIDs, annual reports and fund fact sheets through website search function. The investment objectives and the strategies are articulated within the prospectuses and KIID/KIDs of our funds and the KIID/KIDs, annual reports and fact sheets describe and show performance against those objectives and strategies.

    BlackRock is committed to long-term sustainable investing and so we incorporate material Environmental, Social and Governance (ESG) information in our investment decision process with the objective of improving the long-term financial outcomes of our funds. We have integrated ESG considerations across our investment research, portfolio construction, and stewardship processes. Learn more about BlackRock Sustainable Investing here. BlackRock’s disclosure under the Sustainable Finance Disclosure Regulation regarding sustainability risk integration is available here.

    BlackRock offers a well-considered product governance process which carefully designs funds aimed at delivering for investors’ needs and objectives. A global team scrutinise products and manage the design and delivery through a three-tiered product development committee approval process and also through the asset managers’ board and regulatory approval processes. The team also monitors funds on an ongoing basis in partnership with BlackRock’s investment and risk functions through the fund lifecycle with the aim of keeping it aligned with investors’ interests.  

    As a fiduciary investor, BlackRock undertakes investment stewardship engagements and proxy voting with the goal of protecting and enhancing the long-term value of the assets we manage. In our experience, sustainable financial performance and value creation are enhanced by sound governance practices, including risk management oversight, board accountability, and compliance with regulations.

  • For investors of BlackRock funds within the scope of SRD II the portfolio composition can be found within the annual reports in the Literature Section of the fund product page and summarised holdings within the fund fact sheet.

    The portfolio turnover of equities within a portfolio will vary in relation to the investment strategy.  For your relevant fund investments, the Portfolio Turnover Rate of all securities within the fund can be found within the summary table.

    The transaction costs associated with the turnover of all instruments within the relevant BlackRock fund produced in accordance with MiFID  is available within the ex-post cost disclosure of the European MiFID Template (EMT).

  • ESG integration is part of both our active investment process and index investment processes and oversight. BlackRock has a consistent framework for ESG integration that also permits a diversity of approaches across different investment teams and strategies. ESG considerations that are material will vary by client objectives, investment style, sector, and market trends. Depending on the nature of the strategy of the fund or segregated account, which influences the assessment and materiality of the following considerations, when making investment decisions, we consider long-term financial forecasts of investee companies. These are developed using a combination of both market (consensus) estimates and the views of portfolio managers as to how the financial performance of the company is likely to develop over time. For our public market strategies, we are continuously expanding access to high quality ESG data sources.  In addition to third party data, we have developed proprietary measurement tools to deepen our investors’ understanding of material ESG risks.

    Fundamental investment teams meet with company leadership, project sponsors, and other entities, with the BlackRock Investment Stewardship team when appropriate, to support investment research, including of material sustainability issues. Systematic investors and index portfolio engineers rely on the BlackRock Investment Stewardship team to conduct engagements with portfolio companies to drive the implementation and oversight of best practices in material sustainability areas to support long-term financial performance.

    In our index investments business, we work with index providers to expand and improve the universe of sustainable indexes, and our investment stewardship processes encourage the companies in which our clients are invested to manage and disclose material sustainability risks effectively.

    All investment teams have an integration statement which explains to what degree ESG considerations are included in the investment process. Portfolio managers have access to ESG research, data and insights to inform investment decisions.  Sustainability issues can contribute to a company’s long-term financial performance, and so further incorporating these considerations into investment research, portfolio construction and portfolio review can help enhance long- term risk adjusted returns. See more on ESG integration here and BlackRock’s disclosure under the Sustainable Finance Disclosure Regulation regarding sustainability risk integration is available here.

    Throughout the investment process a wide range of risks are considered by BlackRock.   Whilst the risks identified may not be exhaustive, fund offering documentation and segregated account client reporting further detail applicable material risks.

    BlackRock Investment Stewardship’s activities are focused on maximizing long-term value for our investors.  BlackRock Investment Stewardship does this through engagement with boards and management of investee companies and, for those clients who have given us authority, through voting at shareholder meetings. In particular BlackRock Investment Stewardship  has a focus on board quality and effectiveness, climate and natural capital, strategy, purpose and financial resilience, incentives aligned with value creation and company impacts on people (more details here).

  • BlackRock Investment Stewardship subscribes to two global research providers and several market-specific providers, as an input to support our research capabilities. However, our voting and engagement analysis is determined by several key inputs including a company’s own disclosures and our record of past engagements. BlackRock does not follow any single proxy research firm’s voting recommendations. Further information can be found within BlackRock Investment Stewardship philosophy and approach.

  • BlackRock’s approach to the balance between securities lending and proxy voting is driven by our clients’ long-term economic interests. The decision whether to recall securities on loan for voting purposes  is based on a formal analysis of the anticipated revenue to the client from the shares on loan compared to the assessed economic benefit of casting votes. Generally, we expect that the likely long-term economic benefit to clients of casting votes would be less than the securities lending income. This is either because, in our assessment, the resolutions being voted on are routine and will not have significant economic consequences or because the outcome would not be affected by BlackRock voting the marginal holding of loaned securities. More detail on our approach to this assessment can be found here:

    From time to time, BlackRock Investment Stewardship may determine that the expected near- and long-term economic benefit of voting clients’ entire holding is greater than the anticipated lending revenue. We do not recall shares on loan to vote unless we can make the case that the optimal voting outcome would be economically beneficial for clients and voting all eligible shares in BlackRock’s portfolios would increase the likelihood of achieving that outcome.

    Periodically, BlackRock reviews our process for determining whether to recall securities on loan in order to vote and may modify it as necessary.

  • BlackRock Investment Stewardship maintains policies and procedures that are designed to prevent undue influence on BlackRock’s proxy voting activity. Such influence might stem from any relationship between the investee company (or any shareholder proponent or dissident shareholder) and BlackRock, BlackRock’s affiliates, a BlackRock advised fund or its affiliate, or BlackRock employees.  There are a number of situations where BlackRock determines not to vote itself due to regulatory restrictions or a perceived or actual conflict of interest. In such cases, BlackRock uses an independent third party, referred to as an independent fiduciary, to instruct the votes on our clients’ holdings. The list of companies for which BlackRock appoints an independent fiduciary is managed by BlackRock’s Legal and Compliance team.

    BlackRock Investment Stewardship appointed Sustainalytics to act as BlackRock’s independent fiduciary in making proxy voting decisions. In selecting Sustainalytics, BlackRock has reviewed its suitability against the characteristics outlined in our statement on conflicts of interest and proxy voting best practices. Sustainalytics makes voting decisions based solely on BlackRock’s publicly available proxy voting guidelines, which aim to advance clients’ long-term economic interests, and information disclosed publicly by the relevant companies. BlackRock cannot influence Sustainalytics’ voting determination and does not know their voting decision prior to Sustainalytics providing our proxy voting agent with vote instructions.

    As detailed in our statement on conflicts of interest, BlackRock Investment Stewardship’s oversight process in relation to Sustainalytics’ role is to review annually, after peak shareholder meeting season, the votes cast by it to ensure that they reflect BlackRock’s published voting guidelines. The team reports the findings of the review to BlackRock’s Investment Stewardship Global Oversight Committee, a risk-focused committee comprised of senior representatives across BlackRock, including from various BlackRock investment teams. The Committee is responsible for confirming the reappointment of BlackRock’s independent fiduciary. The process also involves discussing with Sustainalytics any votes that seemed inconsistent with BlackRock’s guidelines and to explain any changes to voting guidelines planned for the following year.