- First, a thank you from the
design team to Larry Fink, for forcing us to re-order this week's sections. There might be a few of you enjoying "off the grid" vacations for the last four days that missed the
annual BlackRock letter to CEOs
, so first off,
the link. (We'll make a general observation to start with - compared with prior BlackRock letters that covered social purposes, we've seen very
op-ed coverage of the statement -
carry two of only a scant few opinion takes we've seen).
While the release is chock full of substance, here's a few items we saw that may need some context. First,
BlackRock's explicit support for climate disclosures matching SASB and TCFD formats is the most significant move
interview with SASB from December
that 120 companies to date are reporting in SASB format - meaning BlackRock's goal of seeing all of its portfolio companies disclose in SASB or another material format by the end of 2020 is not a light lift for its portfolio universe.
Second, from its
to clients, the firm plans to
double the number of ESG ETFs it offers
, and work with index providers to make sure it can
offer sustainable versions of all of its largest index portfolios
, and then speaks about how it will "work with them to promote greater standardization and transparency of sustainability benchmark methodology.
We believe that ESG benchmarks should exclude businesses with high ESG risk such as thermal coal and we are engaging with index providers on this topic."
We rarely see public statements from index clients pushing their providers to make changes to selection characteristics - after all, asset managers could simply choose an alternative index or commission a custom index; read as a whole, this is a statement intended to have a broader impact than just the indices BlackRock uses today.
Third, BlackRock will change its engagement policy and
specifically align engagement goals with the UN Sustainable Development Goals
, and will
move to quarterly voting disclosure, as well as disclosing "key high-profile votes"
as they happen; further, following with SSGA's engagement summary last year,
BlackRock will begin publicly disclosing the topics that it engages with each company on annually.
Yes, there's a lot here to react to - if you haven't filled your management team in on the details yet, now's the time.