BlackRock to Double Down on Climate Offenders in 2021

BlackRock, the world’s largest asset manager, will step up its sustainability efforts next year by more than doubling the number of companies it will scrutinize for climate transgressions.

In 2021, the firm will start reviewing 1,000 of what it believes are the world’s worst climate offenders, up from 440 this past year, according to BlackRock’s “Our 2021 Stewardship Expectations,” released Thursday. The $7.4 trillion asset manager plans to take shareholder action against any businesses that are not making significant efforts to curb carbon emissions.

“We will step up our engagement efforts with this universe and consider accelerated voting actions should the substance of companies’ climate-related commitments and disclosures not meet our expectations,” BlackRock said in its report.

Arguably the biggest sustainability advocate in the investing world, BlackRock made good on its promise to take action against companies this past year. Of the 440 companies it scrutinized, BlackRock took voting action against 55 directors and put another 191 directors on notice for next year, in the fiscal year ending June.

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BlackRock said shareholder actions against directors have been effective in the past. Voting actions to revise pay policies resulted in changes at 83% of companies, while votes to increase board diversity occurred in 41% of firms.

How has BlackRock fared in its sustainability quest? Since July, challenges it backed at three businesses, aiming to elicit environmental disclosures, have had mixed results. The criteria it used to judge the companies were based on the framework created by the Task Force on Climate-related Financial Disclosures (TCFD).

At Australia’s largest power company, AGL, a proposal asking it to disclose a plan to retire its coal plants by 2035 garnered support from just 20% of voting shareholders. At Spanish airport operator Aena, a bid to give shareholders a say on climate plans was met with 95% approval. At Denmark-based bioscience company Chr. Hansen, a request to submit better TCFD climate disclosures was dismissed by the board.

BlackRock’s move to step up its efforts, along with increasing regulatory interest in climate change, has advocates hopeful that broader changes are coming for the financial sector after President-elect Joe Biden takes office in January.

This week alone, the New York State Common Retirement Fund (NYSCRF) said the companies in its portfolio would reach net zero by 2040, a more ambitious goal than the 2050 objective typically set by institutional investors. Meanwhile, the California State Teachers’ Retirement System (CalSTRS) joined an activist push to elect four new board members to ExxonMobil.

BlackRock has been dialing up the heat on climate offenders for some time, particularly after CEO Larry Fink’s bombshell letter this year to CEOs. Fink’s missive sent shockwaves throughout the financial world after he said he would set sustainability as the standard for investments.

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Tags: BlackRock, climate, Climate Change, company, Investment, Investment Fund, Larry Fink

Alex Lee

Deloitte’s long-time chief investment officer, Mary Ellen Stocks, has retired, handing over the job to Alex Lee, who has functioned as her deputy in the past.

“We accomplished a lot and left a strong team,” said Stocks, who took over the CIO position in 2004. She joined Deloitte in 1994 and first worked there in investment consulting. The auditing and consulting giant, which has 10,000 professionals, is the US unit of Deloitte Touche Tohmatsu. It is a well-known generator of insightful surveys in the finance and economics realms.

The CIO at Deloitte assists with investment and oversight for the firm’s cash assets, foundation portfolio, and pension plans. The company has both a defined contribution (DC) and a defined benefit (DB) retirement program, which has $8 billion in assets.

Lee transferred to the investment office in 2016 and before that served as a manager in Deloitte’s regulatory and compliance consulting practice. He joined the firm 12 years ago. “I have a grand vision for the team,” he said of his new role.

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Prior to coming to Deloitte, Lee was a credit analyst at UBS Financial Services, where he supported the repurchase agreement and securities-backed lending teams. He has a Bachelor of Arts from Boston College in economics and math.

Stocks has a bachelor’s from St. Lawrence University in political science and a master’s in international finance from Columbia University.