Daily Management Review

Expectations Continues To Build Up With All Eyes On BlackRock’s New Climate Approach In 2020


BlackRock directly interacting with companies on climate risk is a “positive sign”.

BlackRock Inc faces building up pressure and weighs on making its “interactions with portfolio companies” stricter given the effect it has on its climate related records. The largest asset manager in the world has highlighted the important of ESG, while resisting so far any steps pointed out by critics such as providing more detailed information about its discussions with oil companies.
However, there is a wind of change blowing in BlackRock as the New York based asset manager is gearing up for the “2020 proxy season in the spring”. According to an email of a BlackRock’s spokesperson, Ed Sweeney:
“We share the concern about climate risk and its impact on shareholder value for all companies. Indeed, we believe evidence of the impact of climate risk on investment portfolios is building rapidly and we are accelerating our engagement with companies on this critical issue.”
On the other hand, the Amazon Watch Director, Moira Birss expects BlackRock to alter its policies with agribusinesses based on her recent dialogue with the executives of BlackRock. She said:
“It’s a positive sign that BlackRock is willing to directly engage with us”.
However, we need to wait and see if “satisfactory changes” take place. While, Boston Trust Walden’s Tim Smith in touch with BlackRock executives thinks the latter might push “corporations harder in the coming year” for the adoption of “climate-impact reporting guidance”. He also noticed the executives of BlackRock being “more receptive” towards climate change and other concerns as we head into 2020, while peers of the asset manager are taking “more aggressive” stance when it comes to environment related matters. In Smith’s words:
“They need to pay attention to this issue, especially if they lose business because of it”.
Likewise, activists are keeping an eye for the chief executive of BlackRock, Larry Fink to provide some outlines to new approaches in “his annual letter due in January”. According to Reuters analysis:
“Most big fund firms face similar calls to become more active on ESG matters, which they must balance against other client priorities like performance. BlackRock draws the most attention because of its $7 trillion in assets and because it rarely challenges management, even at poor performers”.