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Blackrock to vote for fewer climate provisions in 2022 than 2021


Laurence Fink (chairman and chief executive of BlackRock Inc.) pauses during his speech at the BlackRock Asia Media Forum, Hong Kong, China.

Justin Chin | Bloomberg | Getty Images

BlackRockThe largest global asset manager said that in 2022 it is likely to vote against climate proposals by fewer companies than in 2021. This was because these climate proposals are more rigorous and challenging than those in past years.

BlackRock’s Investment Stewardship team posted a preview on Tuesday showing how they will vote. current season of company shareholding meetings. Blackrock’s Investment Stewardship (BIS)This team includes financial professionals, who link up with corporate governance to benefit its clients.

BlackRock voted for 47% of the environmental and social shareholder propositions in 2021 (81 out of 172), according to the BIS in its note.

BlackRock will “likely support proportionately less this proxy season than 2021” because they are not consistent with the long-term financial interests of our clients. the BIS note says.

BlackRock will not support company changes that are “implicitly designed to micromanage corporations,” according to BIS. This includes any that are too prescriptive or restricting in their decision-making, which call for changes to the company’s business model or strategy, and that do not affect how the company creates long-term shareholder value.

BlackRock instead will support measures to improve the disclosures of company information, which can help investors see how well companies are positioned to adapt climate-related change. BlackRock would like to know specific information on a company’s emission scopes 1 and 2, and its plans for reducing them.

Scope 1 emissions refer to emissions directly related to an organization’s operation, which includes emissions from furnaces, boilers and vehicles. according to the U.S. Environmental Protection Agency. Scope 2 emissions refer to the carbon dioxide produced by electricity, steam heat, or cooling purchased by a company. and scope 3 emissionsThe more difficult segment of emissions that is harder to monitor and track, are those that result from the supply chain.

According to environmental advocates, the BIS note is an indication that BlackRock has softened its commitment to climate accountability in the financial sector.

BlackRock CEO Larry Fink’s 2020 letter to other corporate executivesIt is being seen as a turning point in the history of climate. Fink wrote that climate change was a key determinant of companies’ long-term future prospects. Fink wrote in boldface that he believed we were on the brink of a fundamental restructuring of finance.

However, Tuesday’s resignation letter was disappointing in comparison to the early leadership. Adele ShraimanSierra Club

Although Larry Fink is a climate leader, there are always new reasons why BlackRock cannot use its influence to make meaningful climate change action happen. “The question whether these resolutions are overly micromanaging was answered by the SEC rejecting calls from banks to stop shareholders voting. But BlackRock prefers to stand in the path of common-sense climate proposals, and let the big polluters out of the loop,” Shraiman stated in a written declaration.

Moira Burss, climate and finance director, said so. Amazon Watch, a non-profit advocacy organization.

BlackRock claims that plans to reduce the growth of fossil fuel production is too restrictive. Yet the scientific consensus, and even the International Energy Agency, make clear that ending new fossil fuel production is the minimum needed to avoid catastrophic climate change that will negatively impact all investors — not to mention every living being on the planet. BlackRock has not voted in accordance with the needs of shareholders. Shareholder proposals are now aligned to what is needed to deal with the growing crisis.

BlackRock has not yet responded to our request.

BlackRock, however, stated that the current geopolitical risks are also affecting its voting strategy for this year in its BIS Letter. Global energy markets are being affected by the conflict in Ukraine, and the resulting international efforts to reduce Russian oil.

BlackRock reported that “net exporters of energy will be expected to increase their production and net importers to speed up efforts to increase renewables in the energy mix.” “This set of dynamics will — at least in the short- and medium-term — drive a need for companies that invest in both traditional and renewable sources of energy and we believe the companies that do that effectively will produce attractive returns for our clients.”