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Governance

BlackRock calls on companies to improve climate risk reporting

BlackRock (BLK) is urging the companies it invests in to align their climate risk reporting with the recommendations issued by the Financial Stability Board Task Force on Climate-related Disclosures in June.

In letters issued to roughly 120 companies over the past week, Michelle Edkins, managing director and the global head of BlackRock's investment stewardship team, wrote that the firm views the task force's recommendations "as a means to achieve the comparability and consistency of reporting that is important to us as investors." It asked that companies assess the recommendations and provide insight on how their current reporting aligns with them, whether they intend to adopt them, and if they anticipate any obstacles in their adoption. The letters were sent to companies that BlackRock feels "have material climate risk inherent in their business operations," according to a copy obtained by Pensions & Investments.

The task force's recommended reported framework, which BlackRock and other investors helped develop, focuses on four themes — corporate governance, strategy, risk management, and metrics and targets. The task force is chaired by Michael R. Bloomberg and was established by the Financial Stability Board in December 2015.

The move is the latest by BlackRock on climate change after casting its first votes this year in favor of shareholder proposals asking companies such as Occidental Petroleum Corp. and Exxon Mobil Corp. to provide more detail on the topic. CEO Larry Fink said in his annual letter to CEOs earlier this year that the firm would not be "infinitely patient" with companies on environmental and social issues that carry long-term risks.

Bloomberg contributed to this story