The resolutions – which did receive backing from a significant number of shareholders at both firms – required the oil companies to set Paris-aligned targets on carbon emissions. In response, BlackRock said it was engaged in conversations with both companies, arguing that the complexity involved in areas such as reporting on indirect emissions in value chains, would take more time.
The complexities of Environmental, Social & Governance issues means that it can be difficult to boil down a particular subject into a simple yes or no answer, particularly if an asset manager or asset owner believes they may have more meaningful impact by engaging with the company than divesting or voting against resolutions.
Outside of negative screening, it remains difficult for investors to really compare like-for-like when looking at ESG products, as the ethical considerations involved can vary considerably, as too can the way impact and engagement is measured.
However, if that same company puts their head above the parapet to lecture the industry on what it should do, then best believe the same will be applied to you.
BlackRock has faced a number of critics over the years for failing to live up to its lofty ideals. Only last year a non-profit called Majority Action claimed the firm had supported just 12% of climate change resolutions and that its stewardship team raised environmental issues with only 15% of the businesses it met with.
While efforts to move the industry forward should be recognised, it is when disparities arise that questions are asked, particularly by journalists whose job it is to question what they are told. A media audit of asset management reporters that was conducted last year by JPES Partners found that 92% are concerned about greenwashing, a figure which will likely creep even higher.
And just this week a prominent financial journalist noted on twitter: “ESG hypocrisy in a post-covid world. There’s a feature I want to write….. So many examples this week.”
Some asset managers may rightly feel that they are shifting the dial for the industry but if you want to be seen as a pioneer on ESG issues (and our research has shown that 60% of large asset managers believe they are just that!), then best be prepared to answer those difficult questions.