BlackRock posted its updated global Investment Stewardship Principles and US Proxy Voting Guidelines effective as of January 2023. According to the summary, market-prompted modifications to the global principles (and corresponding market-specific guidelines) relate to nature-related disclosure expectations and the timing of sustainability-related disclosure.
The US Proxy Voting Guidelines reflect these two policy positions as follows (emphasis added):
Natural capital
The management of nature-related factors is increasingly a core component of some companies’ ability to generate sustainable, long-term financial returns for shareholders, particularly where a company’s strategy is heavily reliant on the availably of natural capital, or whose supply chains are exposed to locations with nature-related risks. We look for such companies to disclose how they consider their reliance and use of natural capital, including appropriate risk oversight and relevant metrics and targets, to understand how these factors are integrated into strategy. We will evaluate these disclosures to inform our view of how a company is managing material nature-related risks and opportunities, as well as in our assessment of relevant shareholder proposals. Our publicly available commentary provides more information on our approach to natural capital.
Material sustainability-related risks and opportunities
When assessing how to vote – including on the election of directors and relevant shareholder proposals – robust disclosures are essential for investors to understand, where appropriate, how companies are integrating material sustainability risks and opportunities across their business and strategic, long-term planning. Where a company has failed to appropriately provide robust disclosures and evidence of effective business practices, BIS may express concerns through our engagement and voting. As part of this consideration, we encourage companies to produce sustainability-related disclosures sufficiently in advance of their annual meeting so that the disclosures can be considered in relevant vote decisions.
BlackRock released its position paper on natural capital in February 2022, concurrent with its 2022 engagement priorities, which we reported on here.
See “BlackRock to Continue Asking for Climate Targets and Disclosure Despite Anti-ESG Pushback” (ESG Today), “BlackRock’s ’23 Voting Guidelines: No Major Changes” (TheCorporateCounsel.net), and “Amid ESG backlash, BlackRock says it will not change its proxy voting” (Pensions & Investments), and additional information and resources on our Institutional Investors page.
This post first appeared in the weekly Society Alert!