Five Senate Democrats have called on BlackRock to explain the divergence between its proxy voting record and its commitment to climate action.
That record "appears to contradict your public statements," said a letter Thursday from Sens. Brian Schatz of Hawaii, Elizabeth Warren of Massachusetts, Tammy Baldwin of Wisconsin, Sheldon Whitehouse of Rhode Island and Martin Heinrich of New Mexico. The senators said that BlackRock "lags all of its peers" when it comes to exercising its fiduciary responsibility to make companies account for their contributions and exposure to climate risks, and to disclose their lobbying activities.
"One aspect of BlackRock's voting record stands out: its opposition to shareholder resolutions that would improve disclosure of election spending and lobbying, including through trade associations," said the letter to BlackRock CEO Larry Fink.
"Your pattern of voting against political spending transparency resolutions is even more troubling given that members of Congress have repeatedly written to you highlighting the ways in which corporate funding of anti-climate groups has negative repercussions for the prospects of advancing climate legislation," the letter said.
The senators gave the asset manager until the end of October to answer several questions, including whether BlackRock's 2020 proxy season accurately represents what to expect going forward. "For how long could a company fail to bring its business model in line with the Paris Agreement before BlackRock would feel compelled to vote against management?" the letter asked.
The senators referenced a September report from shareholder advocacy group Majority Action on how asset manager voting shaped corporate climate action this year, which found that BlackRock and Vanguard Group voted for 99% of company-proposed directors in the energy, utility, banking and automotive sectors and voted "overwhelmingly" against climate-related shareholder resolutions. Majority Action executive director Eli Kasargod-Staub said that elected officials are joining institutional and retail investors in calling BlackRock to task.
BlackRock said in its own statement that it anticipates more engagement and voting on sustainability issues next year and is reviewing its engagement priorities and voting guidelines. It promised to provide more detail in the coming months, including how those priorities will be reflected in voting actions in the next proxy season.
"We have transformed our disclosure as a stewardship team by publishing more voting bulletins than ever before," BlackRock's statement said.
