Some European investment firms have already started reporting such a metric. Secondly, Fink makes a commitment to publishing a “temperature alignment metric” for public equity and bond funds.Īlso referred to as an “implied temperature rise” or “portfolio warming potential,” this metric gives an indication of a portfolio’s aggregate global warming trajectory, which can be used to evaluate how well a portfolio is doing in staying within an allowable carbon budget that conforms to a bigger-picture net-zero transition plan. It remains unclear whether this list will be publicly disclosed and the laggards named ahead of their respective shareholder meetings. So how does Fink’s 2021 letter depart from previous years, and in what ways does it commit BlackRock to using its $8.7 trillion capital market influence to “confront the global threat of climate change”?īelow are five points from both the CEO letter and the companion client letter, called " Net Zero: A Fiduciary Approach," that stand out to us.įirstly, the companion letter-the one sent to BlackRock clients-commits to "increasing the role of votes on shareholder proposals in our stewardship efforts around sustainability." At the end of 2020 BlackRock reports already having supported half of the 22 shareholder proposals voted in the second half of 2020.įurthermore, the letter commits BlackRock to a more-formalized climate engagement strategy, identifying carbon-intensive companies that risk voting action where significant progress is not made toward increased transparency, as well as being flagged for potential exit from discretionary active strategies. Morningstar’s proxy voting data shows that between 2016 and the close of the 2020 proxy season, the asset manager’s funds had supported only 10 of 165 climate change resolutions voted at U.S. One area where BlackRock lost points was its ESG proxy voting record. But it was also an effort to catch up to global rivals that have more thoroughly inculcated ESG standards in their investment processes, operations, and cultures." The world's largest money manager's vow could prove to be a turning point for the industry-a sign that investment firms can no longer ignore ESG risks. "BlackRock in January 2020 declared its desire to augment and extend its existing ESG efforts throughout its organization. Members of this category were strong in some areas and weak in others. BlackRock was among 40 asset managers evaluated and was assigned a “Basic” level, meaning it ranked third-tier in a four-tier ranking system. In November 2020, Morningstar published the first round of a new asset manager ESG Commitment Level evaluation based on an analysis of how intentionally an asset manager incorporates ESG factors into their investment processes and organizations. However, this strident tone hasn’t altogether squared with BlackRock’s investment approach. While stopping short of calling it "stakeholder capitalism," the vision he articulates over the following three letters clearly goes beyond the prevailing "shareholder primacy" model of governance. The term "purpose" appears for the first time in Fink's 2018 message. BlackRock voted for shareholder resolutions at Exxon XOM and Occidental OXY that asked the companies to report on the business risks of a low-carbon policy scenario.
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Subscribe to CNBC PRO for exclusive insights and analysis, and live business day programming from around the world.In 2017 BlackRock cast its first vote in support of climate resolutions that management had opposed. "I don't believe we will be the same operational firm we were pre-Covid," he noted, adding that he believes the company will be a "better firm" in the wake of the pandemic. This is top of mind while children remain at home, since women are often the primary caregiver. When thinking about bringing employees back to the office, one of the primary considerations is ensuring that men and women can return in equal measures. Fink said that starting next week he will be back in the office on a more regular basis - "at least three days a week." How long can you keep that culture together?" he said.Īs of last week, about 30% of the firm's leading executives were back in the office. But I really am worried about this whole idea of culture. "Through technology we've been operating really well, really efficiently. He noted the firm's heavy investments in technology as aiding work-from-home operations. Personal Loans for 670 Credit Score or Lower Personal Loans for 580 Credit Score or Lower Best Debt Consolidation Loans for Bad Credit
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