Further to our prior post, Proxy Analytics prepared for us the following summary of key changes to Blackrock’s Investment Stewardship (BIS) publications and disclosures.
Engagement priorities remain consistent, but with greater emphasis on ‘Financial Resilience’. BIS is maintaining its focus on key areas such as board quality and effectiveness, corporate strategy, climate risks and transition, and company impacts on people, in its engagements. Additionally, BIS is placing increased emphasis on what they term “financial resilience.” This concept of financial resilience is specifically addressed in a new Investment Stewardship commentary. The commentary discusses how companies are adapting to current 'mega forces,' including the emergence of AI, geopolitical fragmentation, the transition to a low-carbon economy, and demographic divergence.
A new preference towards ISSB-aligned disclosures. In its Investment Stewardship commentary on “climate-related risks and the low-carbon transition” and its proxy voting guidelines, BlackRock now prefers disclosures aligned with the International Sustainability Standards Board (ISSB) standards, specifically IFRS S1 and S2. BlackRock does not anticipate immediate changes in aligned disclosures, but instead recognizes that companies may gradually align their reporting with ISSB standards over several years.
Further ‘softening’ of language used to discuss sustainability initiatives. Blackrock has recently found itself at the center of the highly politicized ESG debate. Last year, the firm notably stopped referring to these issues as 'ESG' and made several other changes in its communication strategy. This season's alterations, though less pronounced, continued the trend of “softening” the tone. This includes BIS removing or altering language about its 'beliefs' and making its expectations sound less prescriptive, often framing them as preferences. Additionally, some references to potential voting actions against directors in specific circumstances were removed.
A small number of new voting guidelines. BlackRock's recent updates to its proxy voting guidelines include new commentaries and policy changes on several key topics. These topics encompass the evaluation of shareholder proposals, the implementation of board term limits and consideration of director tenure, and CEO/Management succession planning.
A more detailed memo on the changes is available to Proxy Analytics’ subscribing clients. Corporate issuers who are members of the Society can request a complimentary copy of the memo via this email address.