The world’s biggest asset manager issues a new policy update, which stresses decarbonization and board member diversity.
QUICK FACTS:
- The New York-based investment firm, which manages roughly $9.5 trillion worth of assets worldwide, now leans on the companies in its portfolio to comply with progressive guidelines on climate change, hiring, and governance.
- BlackRock says that “[w]e have engaged companies on board diversity for many years. That engagement informs our voting guidelines for 2022.”
- The firm adds that it wants “companies to demonstrate that their plans are resilient under likely decarbonization pathways, and the global aspiration to limit warming to 1.5°C.”
CORPORATIZED PROGRESSIVISM:
- “[I]n the U.S., we believe boards should aspire to 30 percent diversity of membership and encourage companies to have at least two directors on their board who identify as female and at least one who identifies as a member of an underrepresented group,” BlackRock says.
- The firm is not alone. Earlier this month, Goldman Sachs Asset Management told its portfolio companies to have boards with at least 10 percent female directors and one director from an under-represented group. If the companies did not comply, Goldman Sachs would vote against the board’s nominees. BlackRock did not specify whether it would employ similar retaliatory actions.
- Specific demographic data is now readily available to investment companies. According to a BlackRock spokesperson, this data collection will continue to grow, especially in the United States.
- “Under-represented” people include people with disabilities, veterans, ethnic or racial minorities, and those who identify as LGBTQ.
- All this happens despite the fact that an increasing number of American consumers want corporate executives to stay out of social issues.
- With respect to BlackRock’s environmental goals, whatever its stated objectives, the firm remains heavily invested in fossil fuels.
- “Keep in mind, if a foundation or an insurance company or a pension fund says, ‘I’m not going to own any hydrocarbons,’ well, somebody else is, so you’re not changing the world,” CEO Larry Fink says.
BACKGROUND:
- BlackRock operates in 38 countries and has more than 16,000 employees.
- Critics allege that the firm engages in anti-competitive behavior and that its investments in China are unscrupulous.
