BlackRock, the world’s largest asset manager, has disclosed that in the past year it has voted 55 times against directors at 49 companies for failing to make progress on tackling the climate crisis.
The firm announced its sustainability focus in January, when it said it would be getting tough on companies that did not meet its expectations on dealing with climate risk, and would vote against them at annual shareholder meetings.
It announced in its annual investment stewardship report that it cast more than 5,100 votes against company directors in the past 12 months to hold management to account for failing to make headway on a range of issues, from environmental goals and corporate strategy to board diversity. This was 300 more than in the previous year.
The fund manager said in July it had identified 244 companies that were not making progress on the climate emergency, and voted again 53 of them. The list of those it voted against was dominated by energy companies, including the oil companies ExxonMobil and Chevron, and also featured the vehicle manufacturers Volvo and Daimler, and the German airline Lufthansa.
BlackRock put the remaining 191 companies “on watch”, the first time it had disclosed the number of firms it was reviewing, thereby warning them they risked having votes cast against them at 2021 shareholder meetings unless they made significant progress in the interim.
Larry Fink, the chief executive of the investment firm, wrote in his annual letter to chief executives in January that the company would lower its exposure to fossil fuel companies, divest from thermal coal and vote against companies that did not make progress.
BlackRock, which manages assets worth $7.3tn (£5.5tn), including large holdings in major oil producers such as BP, Shell and ExxonMobil, has previously been accused by environmental campaigners of hypocrisy for routinely voting against shareholder motions that directed boards to take action on the climate crisis.
Its voting transparency has improved, according to Wolfgang Kuhn from the campaign group ShareAction. However, he believed the asset manager should move towards stronger systematic support of climate resolutions.
“To show true progress, BlackRock needs to take responsibility for their passive products as well,” Kuhn said, referring to the fact that the majority of the firm’s investments sit in index funds that broadly follow the stock market. “Passive investment is not a god-given entitlement to get around responsibility. If you can’t exclude systemically dangerous companies from your index, then take them out,” he said.
BlackRock said it intended to continue engaging with and voting against companies in the next 12 months. Sandy Boss, the global head of investment stewardship, said the economic impact of the pandemic had emphasised “the need for the private sector to take a more active role in tackling global challenges”.
“Climate change, social and racial equity, and demographic and technological shifts all expose companies to material business risks,” he said.