BlackRock to Continue Engaging with Companies on Climate Strategy, Emissions Targets

Investment giant BlackRock announced the release of its Engagement Priorities for 2023, outlining the key themes identified by the firm as sources of material risk or opportunity that will form the focus of its engagements with companies this year.

The release of the engagement priorities follows several months of pressure BlackRock, who, as the largest global investment management company and a leading voice in the investment community on climate change and energy transition-related investment themes, has found itself at the center of a vocal anti-ESG movement by Republican politicians in the U.S., who have accused the firm of pushing a social agenda on companies, or of “boycotting” and working to harm energy companies.

Despite the political pressure, however, the engagement priorities released by BlackRock Investment Stewardship (BIS) remain largely unchanged from the prior year, and continue to include in sustainability-focused topics in its key themes, including “Climate and natural capital,” and “Company impacts on people,” alongside other priority topics including “Board quality and effectiveness,” “Strategy, purpose, and financial resilience,” and “Incentives aligned with financial value creation.”

In this year’s release, however, BlackRock stressed that its engagement is focused on understanding how companies manage risks and capitalize on opportunities, and that it “does not tell companies what to do.” Similarly, in its commentary section discussing its climate-focused engagements, BlackRock stated that “it is not our role to engineer a specific decarbonization outcome in the real economy.”

The climate section also stressed that the investment manager’s focus on this area “is based on our fundamental role as a fiduciary to our clients.” BIS added:

“As part of this role, we are interested in hearing from the companies in which our clients invest on the impact of climate change and the energy transition on their strategy and long-term business model. We engage on this topic because the way in which companies navigate material climate related risks and adapt through the energy transition may have a direct financial impact on our clients’ investment outcomes and financial well-being.”

One of the key aspects of BlackRock’s climate-related engagement is on disclosure, with BIS encouraging disclosures aligned with the TCFD framework, and welcoming the work of the ISSB to develop global sustainability reporting standards.

Learn more: ESGToday