BlackRock: Support More Climate Change Proposals

BlackRock

Each year, shareholders at dozens of companies file proposals with management requesting increased disclosure or other actions related to climate change.  For example, As You Sow filed a resolution with Hess Corporation, a major oil & gas company, requesting:

"that by 2018 Hess publish an analysis, at reasonable costs and omitting proprietary information, of long term impacts to the Company's oil and gas reserves and resources under a scenario in which demand reduction for oil and gas results from carbon restrictions or related rules of commitments adopted by governments consistent with the Paris Agreement's 2 degree C global warming target. The reporting should assess the resilience of the company's portfolio of assets through 2040 and the financial risks associated with such a scenario" [1]

The resolution earned the support of 30.1% of shareholders, a significant result. The support could have been higher.  BlackRock, Vanguard, and other large fund managers did not  support it, even whent they voted in favor of nearly identical resolutions at Exxon and Occidental Petroleum.  BlackRock and Vanguard only supported 2 out of 17 2-degree scenario resolutions, and zero of the other 73 climate change shareholder resolutions in the 2017 proxy season [2].  Why is BlackRock lagging its peers in its voting strategy, even when it claims to be focused on climate risk?  BlackRock says that "We have determined that climate change presents significant investment risks and opportunities that have the potential to impact the long-term value of many companies. For this reason, we included climate risk as one of our engagement priorities" [3].  Yet the company does not seem to be backing its words with substantive, public action in the arena of shareholder resolutions.  

According to Ceres, BlackRock's competitors have outperformed it on climate change resolution voting.  State Street supported 54.6% of climate change resolutions, Fidelity supported 51.8%, and Goldman Sachs supported 82.1% [4].  I've personally divested from BlackRock ETFs in favor those offered by of State Street (LOWC) and Goldman Sachs (JUST).  Until BlackRock shows us that it can back up its statements in favor of action on climate change, I don't plan to be a customer.

  

 

[1] https://engagements.ceres.org/ceres_engagementdetailpage?recID=a0l12000005PCnrAAG

[2] https://www.greenbiz.com/article/heres-how-mutual-fund-giants-stand-climate-related-shareholder-proposals

[3] https://www.blackrock.com/corporate/literature/publication/blk-commentary-engaging-on-climate-risk-march2018.pdf

[4] https://www.greenbiz.com/article/heres-how-mutual-fund-giants-stand-climate-related-shareholder-proposals