While votes on climate-related shareholder resolutions often take center stage at corporate annual meetings, they seldom draw support from the two top U.S. index fund firms: BlackRock and Vanguard, Reuters investigation shows by RossKerber macmutual
- The far-reaching impacts of climate change on companies have investors pressing corporate leaders for action to minimize environmental damage and to maximize disclosure of risks to their businesses. The threats range from more frequent floods or wildfires that imperil major assets to regulations that could undermine profits.
“The investors who should be the leaders have so far been the laggards,” said Rob Berridge, director of shareholder engagement at Ceres, a Boston-based research and advocacy group focused on sustainability issues. Those rates were less than Walden and other investors expected given the companies’ pledges to take the issue more seriously, said Tim Smith, a director at the firm now known as Boston Trust Walden, a money manager focused on environmental and social issues.
“We typically aim to understand the companies rather than use our vote as a blunt binary instrument,” BlackRock said in response to due diligence questions from the Seattle City Employees’ Retirement System . “There’s always room for improvement, but they’re taking it seriously and doing a much more proactive job” of pressuring companies on climate and other issues, said Vermont Chief Investment Officer Eric Henry, speaking about top index fund firms. He oversees about $4.5 billion, including assets managed by BlackRock.
Officials at the plan put BlackRock on watch status, which could have led to it being dropped as an investment manager. Two years later, in December 2018, the Seattle system ended its review and kept its money with Blackrock, with a staff memo noting among other things the asset manager had voted to support a few climate risk resolutions in 2017 and 2018.
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