Black Rock tries to come clean
Published by MAC on 2020-01-16Source: Investment Weekly
The world's largest single commercial investor in mining makes a stab at reducing its support for unsustainble policies and practises, but doesn't act as boldy as many others have recently done - especially in regard to coal [see: Mining investors bad record ].
BlackRock's Fink embraces sustainability as 'new standard' for investing
Commits to doubling ESG ETF options to 150 among other actions
by Ellie Duncan
Investment Weekly
14 January 2020
Larry Fink has unveiled a raft of actions to integrate sustainability into
BlackRock's investment offering, with ESG set to be assessed with the
"same rigour" as liquidity and credit risk.
In his annual letter to CEOs, Fink said climate change "has become a
defining factor in companies' long-term prospects" and added that "we are
on the edge of a fundamental reshaping of finance".
He said: "Every government, company, and shareholder must confront climate
change."
Then, in an open letter to BlackRock's clients, CEO Fink added: "We
believe that sustainability should be our new standard for investing."
BlackRock was recently identified as one of the three worst-performing
asset owners with regards to climate-related proxy voting by campaign
group ShareAction, along with Capital Group and T. Rowe Price and has
faced criticism for its apparent lack of action on climate-related
matters.
Fink has now set out a number of actions, such as a commitment to double
its offerings of ESG ETFs over the next few years to 150 and launching
sustainable versions of flagship index products.
The asset manager also revealed it was in the process of removing from its
discretionary active investment portfolios the public securities, both
debt and equity, of companies that generate more than 25% of their
revenues from thermal coal production, with the aim to accomplish this by
the middle of 2020.
BlackRock confirmed that it will begin to offer sustainable versions of
its flagship model portfolios, including its target allocation range of
models, this year.
It also intends to launch sustainable versions of its asset allocation
iShares this year to "provide investors with a simple, transparent way to
access a sustainable portfolio at good value in a single ETF".
Fink said BlackRock would increase its focus on sustainability in its
stewardship activities by "mapping our priorities to specific UN
Sustainable Development Goals as well as more regularly disclosing the
companies we engage with and the topics of our discussions".
BlackRock under renewed pressure to support climate action
In his letter, Fink stated that BlackRock voted against or withheld votes
from 4,800 directors at 2,700 different companies last year.
He wrote: "Where we feel companies and boards are not producing effective
sustainability disclosures or implementing frameworks for managing these
issues, we will hold board members accountable.
"Given the groundwork we have already laid engaging on disclosure, and the
growing investment risks surrounding sustainability, we will be
increasingly disposed to vote against management and board directors when
companies are not making sufficient progress on sustainability-related
disclosures and the business practices and plans underlying them."
In terms of reporting standards, Fink said that BlackRock "is not yet
where we want to be, and we are continuously working to improve our own
reporting".