Exclusive: BlackRock vows new pressure on climate, board diversity

Mon Mar 13, 2017 5:51am EDT
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By Ross Kerber

BOSTON (Reuters) - BlackRock Inc(BLK.N: Quote), which wields outsized clout as the world's largest asset manager, planned on Monday to put new pressure on companies to explain themselves on issues including how climate change could affect their business as well as boardroom diversity.

The move by BlackRock, a powerful force in Corporate America with $5.1 trillion under management, could bolster efforts like climate-risk disclosure practices developed by the Financial Stability Board, the international body that monitors and makes recommendations about the global financial system.

BlackRock, which holds stakes in most major U.S. corporations, identified its top "engagement priorities" for meetings this year with corporate leaders in documents to be posted on its website on Monday, with climate risk and boardroom diversity on the list. Reuters received advance copies of the materials.

Michelle Edkins, set to oversee the outreach effort as head of a 30-person team, said BlackRock might want to hear from companies about how they are assessing the risk that climate change may pose to their operations. Edkins cited the example of how rising ocean levels could swamp a real estate company's valuable beachfront property.

Some companies have shown leadership on the areas BlackRock considers priorities, Edkins said, while others need improvement. "There are firms where we think they're probably not moving fast enough given the risks to the business," Edkins said in a telephone interview on Sunday.

The action marked a step-up in BlackRock's advocacy with boards and executives, and comes after the fund giant was criticized by environmental and labor activists for not backing proxy resolutions dealing with climate change and other topics more often at shareholder meetings.

BlackRock stopped short of pledging to vote more often against companies' management. It said it still prefers private meetings with executives and casts critical proxy votes only as a last straw.

"We can't micromanage," Edkins said.   Continued...

FILE PHOTO: Larry Fink, Chief Executive Officer of BlackRock, takes part in the Yahoo Finance All Markets Summit in New York, U.S., February 8, 2017. REUTERS/Lucas Jackson/File Photo