BlackRock revealed Monday that it has no immediate plans to change its proxy voting, a position that could dismay several state treasury funds and elected officials who have criticized the manager for its stance on ESG investing.
In BlackRock Investment Stewardship's 2023 global principles report, the $8 trillion manager reiterated that it believes certain environmental, social and governance factors should be considered in the evaluation of any company and its leadership. Any well-managed company would take into account sustainability-related risks and opportunities relevant to their businesses, according to BlackRock.
"Given the increased understanding of material sustainability-related risks and opportunities and the need for better information to assess them, BlackRock advocates for continued improvement in companies' reporting, where necessary, and will express any concerns through our voting where a company's actions or disclosures are inadequate," the stewardship report said.
BlackRock made two modifications to its stewardship principles, one to nature-related factors and the other to the timing of sustainability disclosures. Both were effectively codifications of positions that BlackRock already held and communicated about this year.
This year, BlackRock was already encouraging companies to adopt the recommendations of the Task Force on Nature-related Financial Disclosures — a risk management and disclosure framework for organizations to report and act on evolving nature-related risks, such as droughts, floods and other perils.
Now, those recommendations will be included in the global principles, and nature specifically will be a material sustainability-related risk and opportunity at some companies and considered accordingly, BlackRock said.
BlackRock also submitted a response to the International Sustainability Standards Board's exposure draft earlier this year, supporting a global baseline for sustainability-related financial information and climate-related disclosures by companies. That support is now part of the principles.
Although in its feedback to the ISSB, BlackRock explained in its 2023 stewardship report, there needed to be flexibility for some companies based on their evolving data, methodologies and controls, as well as whether they are a public or private business.
The stewardship group will have a new leader soon. BlackRock announced on Dec. 14 that Joud Abdel Majeid, the former deputy chief financial officer, will succeed Sandy Boss and become the head of investment stewardship, a position that has become more high-profile as the asset manager faces more ESG criticism. Ms. Boss is set to become the chief operating officer of its global client business.
So far, the rebuffing by some investors does not appear to be materially impacting BlackRock's business. While some state treasury funds are divesting hundreds of millions of dollars from BlackRock, other big institutional investors are embracing ESG and demanding that asset managers conform to higher ESG standards.
