ESG Questionnaire Response - BlackRock Inc.

ESG Policies

1. Please provide your ESG-related policies.

The following documents lay out our strategy and policies towards sustainability at BlackRock:

2020 Letters to CEOs and Clients: These two letters lay out how BlackRock has made sustainability its new standard for investing. These documents outline initial steps that BlackRock took in 2020 to advance ESG integration, launch new products, increase transparency, and bolster sustainable investing across the firm.

Letter to CEOs

Letter to Clients

2021 Letters to CEOs and Clients: In 2021, we expanded on our commitment to making sustainability our standard by adding a focus on supporting the goal of net zero greenhouse gas emissions by 2050 or sooner.

Letter to CEOs

Letter to Clients

2020 TCFD Report: BlackRock’s TCFD report provides a comprehensive overview of our approach to managing climate risk.

ESG Investment Statement: Our firmwide ESG integration statement outlines how we are integrating ESG investment insights and data across our entire platform. Fund-level ESG integration statements can be found on our product pages, or available upon request.

2. Are sustainable investing and ESG factors integrated into your investment process and portfolio management decisions? If yes, please provide details.

Yes, as discussed in question 1, our firmwide ESG integration statement outlines how we are integrating ESG investment insights and data across our entire platform.

3.a. Are you a signatory to the UNPRI?


3.b. If you are signatory to other coalitions, please list them.

BlackRock engages the global investment and corporate community to promote a sustainable financial system through a number of coalitions and shareholder groups. In addition to those listed below, we work informally with other shareholders (where such activities are permitted under the law) to engage companies on specific issues or to promote market-wide enhancements to current practice.


Broad-based Initiatives Environmental Governance

Business for Social Responsibility (BSR) (2020)

Better Building Partnership (2020)

Global Impact Investing Network (GIIN) (2020)

International Capital Markets Association – AMIC Sustainable Finance Working Group and Green Subcommittee of the Board (2019)

SASB – Sustainability Accounting Standards Board (2011)

UN Principles for Responsible Investing (PRI) (2008)

UN Global Compact (2020)

IFC Operating Principles for Impact Management (2020)

CDP (formerly Carbon Disclosure Project) (2007)

CICERO Climate Finance (2016)

Climate Action 100+ (2020)

Climate Bonds Initiative (2015)

Ellen MacArthur Foundation (2019)

Green Bond Principles (2015)

GRESB (2011)

IIGCC Workstream on Aligning the Banking Sector with the Goals of the Paris Agreement (2020)

AM – Net Zero Asset Managers Initiative (2020)

One Planet Asset Managers Initiative (2019)

Taskforce on Scaling Voluntary Carbon Markets (2020)

TCFD – Task Force on Climate related Financial Disclosures (2017)

The Terrawatt Initiative (2017)

Vatican Energy Transition and Care for Our Common Home (2019)

World Economic Forum’s Future of Energy Council (2016)

International Corporate Governance Network (ICGN) (2008)
Middle East
and Africa

Abu Dhabi Sustainable Finance Declaration (2020)

Association for Financial Markets in Europe – Sustainable Finance Policy Working Group (2017)

Dutch Association of Investors for Sustainable Development (2018)

Dutch Fund and Asset Management Association – Sustainability Committee (2019)

ESG Ireland (2020)

European Fund and Asset Management Association – Responsible Investment and Stewardship Committee (2015)

Green + Gilt (2020)

Institut du Capitalisme Responsible (2017)

Impact Investing Institute (2019)

Pensions for Purpose (2019)

“Race at Work Charter” by Business in the Community (2020)

Spainsif (2020)

UK HMT Asset Management Taskforce (2017)

UK Investment Association – Sustainability and Responsible Investment Committee (2018)

UK Investor Forum – Governance and Engagement Committee (2015)

Dutch Fund and Asset Management Association: National Climate Agreement (2019)

Institutional Investors Group on Climate Change (IIGCC) (2004)

Eumedion Corporate Governance Forum (2010)

Corporate Governance Forum (1992)

Pensions and Lifetime Savings Association Stewardship Disclosure Framework (2015)


Defined Contribution Institutional Investment Association – ESG Subcommittee (2018)

Hispanic Promise (2020)

Management Leadership for Tomorrow (MLT) (2020)

Open Letter from Leaders of the Partnership for New York City (2020)

MAC Action Plan for Racial Equity (2021)

American Council on Renewable Energy (2013)

American Wind Energy Association (2016)

Ceres Investor Network on Climate Risk and Sustainability (2008)

Consejo Consultivo de Finanzas Verdes (2020)

Broadridge Independent Steering Committee (1999)

Commonsense Principles of Corporate Governance (2016)

Council of Institutional Investors (2006)

Canadian Coalition for Good Governance (2005)

Investor Stewardship Group (2017)

Asia Pacific

Responsible Investment Association Australasia (2011)

Taiwan Stock Exchange Stewardship Code (2020)

Asian Investor Group on Climate Change (2016)

Hong Kong Green Finance Association – ESG Disclosure and Integration Working Group (2018)

Investor Group on Climate Change Australia / New Zealand (2009)

Asian Corporate Governance Association (2011)


3.c. Indicate any other international standards, industry guidelines, reporting frameworks, or initiatives that guide your responsible investing practices.

Please see our answer to 3b above.

4. Please describe how ESG oversight and integration responsibilities are structured at your firm, including the process for escalation of key ESG issues. How do you obtain ESG information/data (e.g. public information, third party research, reports and statements from the company, direct engagement with the company)?

BlackRock has a dedicated Sustainable Investing team which oversees the firm’s global efforts on sustainable investing. The BlackRock Sustainable Investing team partners with investment professionals to deliver innovative products and solutions, integrate sustainability considerations across investment processes, and drive sustainable investing research efforts. The BlackRock Sustainable Investing team works closely with the BlackRock Risk and Quantitative Analysis Group to ensure high-quality ESG integration across investment teams as well as with the BlackRock Investment Stewardship team and the Corporate Sustainability team to ensure a holistic approach to sustainability at BlackRock.

All investment professionals are responsible for ensuring that ESG considerations are considered within BlackRock’s investment practices. Senior representatives from each investment team across the firm lead in this effort, with support given by one or more representatives from investment groups across the firm, who work together to advance ESG research and integration, support active ownership, and develop sustainable investment strategies and solutions.

The Risk and Quantitative Analysis Group, which is responsible for evaluating all investment, counterparty, and operational risk at the firm, evaluates ESG risk during its regular reviews with portfolio managers to ensure that investment teams have sufficiently considered ESG risk in their investment decisions, and that investments in highest ESG risk categories are deliberate, diversified and scaled. The Investment Sub-Committee of BlackRock’s Global Executive Committee oversees investment process consistency across the firm’s investment groups, including the incorporation of sustainability risk and insights into investment decision-making. Members of the Sub-Committee include the global heads or sponsors of all of BlackRock’s major investment verticals: ETFs and Index Investments, Global Fixed Income, Active Equities, Multi-Asset Strategies, BlackRock Alternative Investors, Trading & Liquidity Strategies including Cash Management, and Client Portfolio Solutions.

The Global Head of BlackRock Investment Stewardship oversees the development of the firm’s global engagement principles and regional proxy voting guidelines, ensuring consistency throughout the team’s analysis and corporate engagement.

The Chief Corporate Sustainability Officer is responsible for driving connectivity and accountability across the organization on sustainability and partners closely with various functions including Human Resources, Social Impact, Technology & Enterprise Services, BlackRock Sustainable Investing, and BlackRock Investment Stewardship to develop and implement BlackRock’s corporate sustainability framework, policies, and disclosures.

The Nominating and Governance Committee of the Board of Directors is responsible for the periodic review of BlackRock’s policies, programs and reports relating to environmental (including climate change), social and other sustainability matters in coordination with the other standing Committees of the Board.

Regarding data sources, portfolio Managers have access to research, data, tools, and analytics to integrate ESG insights into their investment process though Aladdin. Aladdin is the operating system that connects the data, people and technology to manage money in real time, as well as the engine behind BlackRock’s ESG analytics and reporting capabilities. Having access to this data adds value to all strategies under management when embedded into the investment process. BlackRock’s portfolio managers use Aladdin to make investment decisions, monitor portfolios and have access to material ESG insights that can inform the investment process.

ESG datasets are largely sourced from external vendors (principally MSCI and Sustainalytics, with ~1,600 metrics currently available and further metrics from Refinitiv and Clarity AI being added in the coming year), including headline ESG scores, carbon data, product involvement metrics or controversies have been rolled out to Aladdin tools and support the full investment process, from research, to portfolio construction and modelling, to reporting. In addition to the broad and ever-expanding set of third-party ESG metrics, BlackRock portfolio managers now have access to material ESG insights powered by our internal research models.

More details are available upon request.

5. What channels do you use to communicate ESG-related information to clients and/or the public? Do you produce thought leadership (written reports and publications)? If so, is the information available to the public? Please provide links, if applicable.

There are multiple channels through which we communicate ESG related information to our clients. One of them is through portfolio reporting. For example, a standard ESG & Carbon Exposure report is available to clients upon request. This report helps our clients understand the sustainability characteristics of their portfolios and run a carbon footprint relative to a benchmark.

Aladdin supports BlackRock’s ESG and Carbon reporting capabilities at a portfolio level based on underlying security ESG and Carbon data sourced from MSCI. The report provides portfolio exposure analysis, with a view of ESG and carbon emission scores by sector, ESG Ratings by market value and decomposition of Active Risk by ESG Ratings We have provided a sample template of an ESG and carbon exposure report below.

Examples of our research publications are shown below:

Troubled Waters: water stress risks to portfolios

Published in July 2020, Troubled Waters explores the financial implications of water stress by geolocating physical assets, overlaying climate analytics to assess the granular risks in each location and aggregating the data up to entities that hold the assets to assess their overall exposure. The global real estate investment trust (REIT) market was used to illustrate water stress risks.

Sustainable Investing: Resilience amid uncertainty

Published in May 2020, this research paper investigates the impact of COVID-19 market volatility on sustainable investing performance and flows. We find that sustainable funds significantly outperform their non-sustainable peers, with particularly strong performance in themes such as customer relations, firm culture, and board effectiveness, providing insight into the source of resilience. We also find that sustainable fund inflows remained steady and strong during peak periods of volatility, even while many traditional funds experience net outflows. All in all, the COVID-19 crisis has introduced another strong set of evidence in favor of sustainable investing.

Sustainability: The tectonic shift transforming investing

Published in February 2020, this paper examines the implications of the long transition toward the practice of sustainable investing that is likely to drive market adjustments for years and even decades. The coming capital reallocation is not yet in prices: this long transition in sustainable preferences and practices will make some assets more expensive (those with high sustainability) and others cheaper (those with low sustainability). This means that assets with high sustainability will be rewarded through the long transition period, the opposite of what others posit.

Sustainability: the bond that endures

Published in November 2019, this piece includes details on how ESG bond indexes have created sustainable building blocks that can help bring sustainability to the core of portfolios, research measuring the sustainability of government bond issuers from an ESG perspective, and a first-of-its-kind materiality matrix for global credit, which assesses the financial materiality of key ESG factors across 11 industries.

Sustainability: the future of investing

Published in February 2019, this publication highlights BlackRock’s narrative and approach to sustainable investing and describes the shift from sustainable investing being viewed as a trade-off exercise to it being tied to long-term growth potential.

Sustainable Investing: a ‘why not’ moment

Published in May 2018, this publication discusses sustainable investing’s trajectory into the mainstream, as well as the early evidence of materiality associated with ESG considerations. The paper suggests that employing a sustainable investment approach does not mean giving up risk-adjusted returns: we believe that it is feasible to create sustainable portfolios that do not compromise return goals and may even enhance riskadjusted returns in the long run. The piece additionally demonstrates outperformance in ESG-focused emerging market indices, identifying issues such as shareholder protections, natural resource management and labor relations as potential performance indicators.

6. Do you have periodic reviews of your ESG process/approach to assess its effectiveness? What are the results? What would cause you to disregard ESG issues in your investment/analysis decisions?

Yes, there are periodic reviews of our ESG process/approach to assess its effectiveness. Our answer to Question 4 above highlights the various teams which help in doing this.

As of November 2020, all active portfolios and advisory strategies at BlackRock are 100% environmental, social, and governance (ESG) integrated. BlackRock’s portfolio managers are accountable for appropriately managing exposure to ESG risk we have put in place the following:

  • Strategy-level ESG integration statements for products across the active investment platform are available on our websites. These statements describe how and when in the investment process portfolio managers assess and incorporate sustainability-related considerations, consistent with the  strategy objectives and the specific asset class and investment style.
  • Product sustainability characteristics are also available for retail funds globally, including ESG metrics, carbon intensity, as well as certain business involvement characteristics to the extent available to provide additional transparency to our clients.
  • ESG risk analysis is now embedded in 100% of regular portfolio risk reviews between BlackRock’s Risk and Quantitative Analysis group (RQA) and active portfolio management teams. This means that sustainability-related risks are considered in the same structured investment risk management process as traditional risks like credit or liquidity risk.
  • Discussion of ESG integration approach and sustainability-related portfolio positioning is now included in all quarterly Chief Investment Officer (CIO)-led portfolio reviews for active investment groups. CIO portfolio reviews provide oversight of investment process and portfolio risk and performance across active strategies. Reviews provide a challenge function on portfolio exposures and execution of investment strategy in light of changing market dynamics.
  • Both of the above are supported by an internal Sustainability Exposure and Risk Dashboard, which provide a point in time review of portfolio characteristics and exposure to heightened scrutiny sustainability risk characteristics. as well as metrics from BlackRock’s sustainability research framework (described in the “Material Insights” section of our latest whitepaper). Investment teams have ongoing access to Dashboard analytics including via customized workspaces in Aladdin - supporting portfolio analysis and “what if” modelling through the lens of ESG risk exposure.
  • We have dramatically expanded the ESG data available to our portfolio managers as part of the core portfolio management and risk management platform, Aladdin. 1,600 key performance indicators are now available to portfolio managers in Aladdin from third-party data providers; BlackRock’s internal sustainability research framework scoring is also available alongside third party ESG scores in core portfolio management tools. Across our Aladdin environment, BlackRock is using data from more than a dozen sustainability data providers as well as a range of models and tools ranging from portfolio optimizers that can improve execution of screened strategies to Carbon tax stress-testing models and climate “value at risk” models.


7. Describe how you identify, assess, and manage climate-related risks.

For custom requests, BlackRock can help investors understand their exposure to potential ESG related risks and opportunities and provide decision useful analytics and reporting. For example, within environmental issues, we are developing a suite of analytic modules related to climate change and the transition to the low carbon economy. These will examine factors such as carbon emissions intensity, fossil fuel reserves, water consumption intensity, and environmental-related controversies data across high-risk industries. Within social issues, we have provided clients analysis on controversial weapons and firearms exposure as well as across diversity measures. Finally, within governance, we have examined board-related controversies and corruption scandals. These can generally be applied across a global equity and corporate debt portfolios. We have also partnered with clients to look at new and innovative ways to measure the ‘impact’ of dollars invested, including carbon emissions sequestered and communities served based on investment outcomes. BlackRock can tailor the analytics and reporting depending on client specific needs and objectives.

  • We are analyzing aggregate portfolio MSCI ESG Quality score as well as the E, S and G scores; carbon emissions intensity (metric tons CO2 / $sales); MSCI metrics on exposure to sustainable impact themes, and business involvement; as well as highlight to the client which of their fund holdings score best / worst on the aggregated ESG score and carbon emissions metrics above 
  • Should a client want to improve the sustainability metrics of their portfolio / build a new sustainable portfolio from scratch, BlackRock’s portfolio consulting teams can provide a portfolio consultation on this topic
  • Impact reports are also available for most iShares Sustainable ETFs in the U.S. on These reports go further than standard sustainability data available for all iShares funds by providing more metrics (such as related to gender diversity) as well as company examples, to further enhance transparency. Two sample impact reports are included here: ESGU Impact Report, BGRN Impact Report

Finally, specific to regulatory drivers associated with Transition Risks, BlackRock Sustainable Investing has developed a Carbon Price Stress Test, which simulates the financial impact of an imposed price or tax on carbon emissions. We believe climate regulation will be a key potential source of risk as the world moves to a lower carbon economy and may have significant impact on carbon intensive companies and industries.

8. Describe the climate-related risks and opportunities you have identified over the short, medium, and long term.

Please refer to answer to question 7.

9. Describe the resilience of your investment strategy, taking into consideration different climate-related scenarios.

As long-term investors, we are mindful of the heightened risk of physical climate risk which poses a risk to our client’s assets. By using probabilistic projections of climate change, we are identifying exposure of our client’s assets to unpriced climate change risks. These projections are implying a whole host of first and second order impacts – ranging from physical infrastructure damage and increased energy demand to changes in crop yields. Using these first and second order impacts, we are aiming to contextualize financial risks for some of the longer-term assets.

10. Do you track the carbon footprint of portfolio holdings?


If yes, please describe the methodology and metrics used, and whether you have a set target for reducing the portfolio's footprint.

Please refer to answer to question 7 for methodology and metrics used. There is no set target for reducing the portfolio’s footprint.

11. What are your firm's emissions? Please demonstrate how/whether you are taking steps to reduce these emissions.

For the full year ending 31st December 2019, BlackRock’s corporate GHG emissions (in metric tons of CO2e) was 25,958.

BlackRock’s TCFD report provides a comprehensive overview of our approach to managing climate risk and the steps we are taking to reduce these emissions. For example, it highlights how BlackRock’s operations are carbon neutral. This achievement includes Scope 1, Scope 2, and Scope 3 employee business travel, serviced offices, and co-located data center emissions. We have achieved this milestone by employing energy efficiency strategies, achieving our 100% renewable energy goal, and offsetting emissions we could not otherwise eliminate.


12. Please provide the composition of your senior leadership team and board of directors, including women and visible minorities. How do you encourage diversity of perspectives and experience?

The BlackRock Global Executive Committee (“GEC”) sets and communicates the strategic vision of the firm; to define, implement and instill the firm’s culture; and to oversee operations and business performance. The GEC will also identify and develop a strong, diverse bench of future leaders and work to strengthen and promote the firm’s reputation, regulatory posture and relations with strategic stakeholders. Members of the GEC include:

Biographies for members of the GEC are available at

Board Diversity at BlackRock

BlackRock’s Board of Directors believes diversity on the Board is critical to the success of BlackRock and the company’s ability to create long-term value for its shareholders. The Board has and will continue to make diversity in gender, race and ethnicity, age, career experience, and geographic location – as well as diversity of mind – a priority when considering director candidates. The diverse backgrounds of our individual directors help the Board better oversee BlackRock’s management and operations and assess risk and opportunities for the company’s business model from a variety of perspectives. BlackRock’s commitment to Board diversity enhances the Board’s involvement in our company’s multifaceted long-term strategy and inspires deeper engagement with management, employees and clients around the world.

Our current Board consists of 16 members, 14 of whom are independent. The Board includes five women and six Directors who are non-U.S. or dual citizens. Three of our 14 independent directors self-identify as racially/ethnically diverse, with one as Black/African American, one as Hispanic/Latin American and  one as Middle-Eastern/North African. Several of our Board members live and work overseas in countries and regions that are key areas of growth and investment for BlackRock, including Canada, Mexico, the Middle East and Continental Europe.

As BlackRock’s businesses have evolved, so has its Board of Directors. Today, our Board consists of senior leaders (including 12 current or former company CEOs) with substantial experience in financial services, consumer products, manufacturing, technology, banking and energy, as well as several directors who have held senior policy and government positions. In addition, six new directors have joined our Board and nine longer-tenured directors have departed from our Board in the past five years.

To learn more about our Board of Directors, please visit

Enhance transparency and greater accountability for I&D Outcomes

  • Senior leaders are held accountable for progress on diversity. The BlackRock, Inc. Board of Directors oversees our Global Executive Committee’s compensation and bonus pools, which are determined in part on how they deliver against annual Talent and Diversity objectives. These objectives include an increase in the number of women at all levels and progress against our short-term goal of 30% women in senior management roles.
  • Since 2016, we have used a diversity dashboard in the quarterly business review process, to measure progress in each business’ hiring, retention and development of diverse employees at each title in the firm, regional and functional levels. By creating focus and transparency, leaders are able to continuously challenge themselves and make the day-to-day decisions that will drive the diversity agenda. We also measure and review performance ratings, promotion, and compensation to ensure fair and objective decision making.
  • Larry Fink, CEO of BlackRock, is a founding member of the 30% Club in the US -- a group committed to achieving 30% female representation on our Board of Directors. Michelle Edkins, Global Head of Investment Stewardship for BlackRock, serves on the US Steering Committee and coordinates the 30% Club Investor Group. BlackRock also participates in the 30% Club initiatives in Australia and Hong Kong. 
  • BlackRock is a signatory of the UK HM Treasury’s Women in Finance Charter, pledging to make an effort towards gender balance across the financial industry.
  • Larry Fink is a signatory of the CEO Action for Diversity & Inclusion organised by PwC.
  • Members of our Global Executive Committee and Human Capital Committee have committed personal and professional time to support organisations increasing diversity within our industry, including the Robert W. Toigo Foundation, where Mark McCombe, a member of our Global Executive Committee, serves as the chair and 100 Women in Finance where Armando Senra is a Board member.
  • Last year, we built training programs and tools for our managers to create more diverse and inclusive teams and began embedding those expectations in our talent processes. We also run an annual People Manager assessment which provides our managers with upward feedback on how they are progressing against those expectations. Additionally, BlackRock strives to provide employees with opportunities to grow and develop great careers. We develop employees through experience, exposure and education (training). To meet the requirements of laws, regulations and policies, we conduct annual training for all employees on ‘Respect in the Workplace’ training, which focuses on creating a respectful work environment, ensuring equal employment opportunities, and prevention of discrimination, harassment and retaliation.
  • We measure employee reaction to our I&D efforts through our annual Employee Opinion Survey (EOS), which has 90+% participation every year. In the 2019 EOS, 87% of staff indicated they believe that BlackRock is committed to diversity, up 13 percentage points since 2010; 83% believe that BlackRock is committed to inclusion and 83% of our people feel that they can be themselves at work. We do review the experience gaps between different populations and continue to narrow those over time.
  • In 2017, we added the concept of “belonging” to the EOS and began measuring the success of our efforts with each person in the firm. In 2019, 80% of our employees indicated that they feel like they belong on the team they most often work with.

Impact and Outcomes

We have made a long-term commitment to increasing diversity across all levels of the firm through hiring, retention, promotion, and development initiatives. We embrace the responsibility we have to our employees and to the communities in which we operate. We also recognise the scale of the issue and the multi-year focused effort required.

Over the past 3 years, we have seen significant increases in our recruitment of diverse talent, which is an important indicator of the future composition of our employee-base and management. In 2019, nearly half of all hires were women (49%), bringing our global female representation to 42% as of January 1, 2020. As for ethnic minorities, in the US, 51% of our 2019 hires identify as an ethnic minority. Ethnic minority in this context refers to individuals who report their ethnicity as Asian, Black or African American, Hispanic or Latino, Other.

In addition, we are encouraged by the progress we are seeing in our campus recruiting program, which included over 400 new hires in 2019. We have evolved our campus recruiting strategy to promote our opportunities across a wider range of universities. We actively seek out students through a variety of channels including targeted events, conferences and direct outreach, in order to ensure a diverse talent pool. This approach reflects our belief that high performing talent can be found everywhere.

As a firm, we recognise and are proud of the strides we have made with our diversity and inclusion strategy while acknowledging the work ahead of us and recommitting our focus on future progress.

We also increased our female Board representation to five members which is 28% of our Board.

BlackRock has a history of supporting the LGBT community internally and externally.

  • In 2011, we introduced a Parity Payment to eligible employees to offset imputed income costs that the employee was incurring by having a same sex spouse or domestic partner on their benefits
  • In 2012, we signed the amicus brief in support of gay marriage, a precursor to the Supreme Court case that extended the right to marry to all U.S. citizens, regardless of sexual orientation or gender identity
  • In 2019, we received our eighth consecutive 100% score on the Human Rights Campaign Corporate Equality Index; index evaluates non-discrimination workplace protections, domestic partner benefits, transgender-inclusive health care benefits, competency programs and public engagement with the LGBT community
  • Introduced a Gender Transition guide to provide support, resources and information

Cultivating and advancing diversity and inclusion across the organization

We track and monitor voluntarily disclosed diversity data to review hiring, promotion, and attrition at the firm, regional, and functional levels. We also review performance data, promotion, and compensation to seek to ensure fair and objective decision-making. During the firm’s Quarterly Business Reviews of each business unit, senior management has focused conversations with each business about their plans and progress with respect to diversity and inclusion.

The Management Development and Compensation Committee of BlackRock’s Board oversees our GEC compensation and bonus pools, which are determined, in part, based on how members of the GEC deliver against annual Talent and Diversity objectives.

Further, our 2019 Proxy Statement discusses how organisational strength objectives, such as building a more diverse and inclusive culture and developing great managers and leaders, are factored into performance assessments of BlackRock’s Named Executive Officers.

Encouraging greater diversity on our Board and the GEC

Larry Fink, the GEC, and the Board are committed to diversity throughout BlackRock, including at the GEC and Board level — as demonstrated by Larry’s founding membership of the 30% club which aims to achieve gender balance on Boards and throughout corporations. Additionally, BlackRock set a goal to double representation of our Black senior leaders and increase overall black representation in the workforce by 30%.

BlackRock and its Board believe diversity in the boardroom is critical to the success of the Company and its ability to create long-term value for our shareholders. The Board has and will continue to make diversity in gender, ethnicity, age, career experience and geographic location – as well as diversity of mind – a priority when considering director candidates. The diverse backgrounds of our individual directors help the Board better evaluate BlackRock’s management and operations and assess risk and opportunities for the Company’s business model. BlackRock’s commitment to diversity enhances Board involvement in our Company’s multi-faceted long-term strategy and inspires deeper engagement with management, employees and clients around the world. We currently have five women, one of whom is African American, and six directors who are non-U.S. or dual citizens. Several of our directors live and work overseas in countries and regions that are key areas of growth and investment for BlackRock. As such the broader organisation will most likely move faster compared to the very senior levels – we will achieve progress, not perfection, in the coming years.

Our SASB disclosure provides an overview of the programmes and practices we have in place to encourage diversity and inclusion including senior management accountability mechanisms, leadership development programmes, employee networks, and world-class benefits to attract and retain the best talent.

Proxy Voting

13. What proportion of the time do you vote with or against management on shareholder resolutions, board appointments, and auditor appointments? What proportion of the time do you vote with or against management on ESG issues? How does this break down for climate, diversity, and remuneration issues?

As a large global investor, BlackRock votes at over 17,000 shareholder meetings and approximately 160,000 meetings annually. Our starting position is to support management. We generally prefer to engage in the first instance where we have concerns, and give management time to address or resolve the issue.

While most voting is on relatively routine matters, there are some proposals that attract significant attention and are particularly sensitive or high profile. During proxy season, we schedule daily team meetings and set standing meetings between regional teams which allow our team to leverage the collective expertise of our global team. These processes ensure that high profile votes receive the necessary due diligence. We vote against management proposals if the company is unresponsive or seems not to be acting in the long-term interests of shareholders. Sometimes a meeting with the company is necessary to ensure an informed vote or to advise that we cannot support management on certain proposals and to explain why.

We also confer with, and engage alongside, BlackRock’s active equity portfolio managers where an issue is closely related to long-term shareholder value, e.g. deciding how to vote on a material financial transaction. To ensure that active portfolio managers can execute votes in a manner consistent with their view of what is in the best interests of the clients invested in their fund, our process allows us to cast votes differently where index and active investors might have a different perspective on an issue. Key points from any engagement are noted in Aladdin® Research for use in client reporting and future engagement and voting analysis.

In general, our guidelines should give interested parties a sense of when we’re likely to vote against management. Our voting statistics and our market-specific voting guidelines are available on our website here.

Voting statistics for the 2020 Calendar Year

We aim to vote at all shareholder meetings of companies in which our clients are invested. In cases where there are significant obstacles to voting, such as share blocking or requirements for a power of attorney, we will review the resolutions to assess the extent of the restrictions on voting against the potential benefits. We generally prefer to engage with the company in the first instance where we have concerns and give management time to address the issue. We will vote in favor of proposals where we support the approach taken by a company’s management or where we have engaged on matters of concern and  anticipate management will address them. BlackRock will vote against management proposals where we believe the board or management may not have adequately acted to advance the interests of long-term investors. We ordinarily refrain from abstaining from both management and shareholder proposals, unless abstaining is the valid vote option (in accordance with company by-laws) for voting against management, there is a lack of disclosure regarding the proposal to be voted, or an abstention is the only way to implement our voting intention. In all situations the economic interests of our clients will be paramount.

We believe that when a company is not effectively addressing a material issue, its directors should be held accountable. We will generally engage directly with the board or management of a company when we identify issues. We may vote against the election of directors where we have concerns that a company might not be dealing with E&S factors appropriately. Sometimes we may reflect such concerns by supporting a shareholder proposal on the issue, where there seems to be either a significant potential threat or realized harm to shareholders’ interests caused by poor management of material E&S factors. In deciding our course
of action, we will assess the nature of our engagement with the company on the issue over time, including whether:

  • The company has already taken sufficient steps to address the concern
  • The company is in the process of actively implementing a response
  • There is a clear and material economic disadvantage to the company in the near-term if the issue is not addressed in the manner requested by the shareholder proposal

2020 Annual Stewardship Report

In March 2021, BlackRock Investment Stewardship (BIS) published its 2020 Investment Stewardship Calendar Year Annual Report, covering our investment stewardship work from January 1, 2020 to December 31, 2020. The report reviews our activities over the course of 2020 and provides insight into how companies are addressing material environmental, social, and governance (ESG) risks and opportunities.

In previous years, BIS has published an annual report to coincide with the publication of our annual voting record with the U.S. Securities and Exchange Commission. For example, our latest report was published in September 2020. That report covered the year from July 1 to June 30. In line with our commitment to transparency, this report builds on that content to cover the full year. Moving forward, we will be reporting on a calendar year basis as we observe that many of our clients find this cycle most relevant to their own reporting, such as those required under the UK Stewardship Code or the Principles for Responsible Investment.

The key highlights set out in the report for 2020 include:

  • 3,500+ engagements with companies. This was a 35% increase compared to 2019 and covered nearly 65% of our clients’ equity assets under management.
  • 212% increase year-on-year in “E” engagements. These environmental engagements emphasized how companies are addressing climate risk and the transition to a low-carbon economy.
  • 142% increase in engagements on “S” issues. Given the context of the COVID-19 pandemic, our social engagements focused on how companies were addressing the needs of their employees, customers, and other stakeholders.
  • 5,450 votes against (or withheld) for proposals to re-elect directors. More than any prior year, we held directors accountable when companies did not make sufficient progress on issues central to long-term value creation.

The report also includes a selection of case studies on our engagements in 2020 that showcase BIS’ priorities and demonstrate our stewardship work in action. 2020 was a year like no other, and we expect scrutiny of companies’ societal impact and commitment to stakeholders to remain high in 2021, as detailed in our recently published 2021 Engagement Priorities.

Please find our 2020 Calendar Year Stewardship Report on our website here.

14. What proportion of all independent ESG shareholder resolutions do you support?

BlackRock supported shareholder proposals 16.3% of the time in 2020. Please read more in our 2020 Calendar Year Stewardship Report here.

15. What proportion of remuneration packages do you vote in favour of? In your view, is the current level of executive remuneration too high, too low, or about right? How is this view reflected in your voting record on remuneration?

Where we believe a company’s compensation structures are misaligned with long-term performance, BIS will use our vote to hold the members of the compensation committee, or equivalent board members, accountable for poor compensation practices or structures. In 2020, we voted against the re-election of over 690 compensation committee directors responsible for setting executive pay at 350 companies across 29 markets globally. That is similar to last year when we voted against 739 compensation committee directors at 347 companies across 26 markets. These votes against compensation committee members are attributable to concerns that executive pay policies or outcomes are not aligned with the interests of longterm shareholders. Our votes against compensation committee members were highest at U.S. companies. In calendar year 2020, we held directors accountable for poor pay practices at 87 different companies. This figure is up from the prior two years when we voted against committee members at 73 U.S. companies each year. Other markets where companies received relatively high votes against directors due to pay concerns were the UK (54), France (40), and South Africa (34).

Read more about our engagement and voting on remuneration in our 2020 Calendar Year Stewardship Report on our website here, and our approach to engagement on incentives aligned with value creation here.

16. Have you ever co-filed an ESG-related shareholder resolution? If so, how many and with what frequency?

We do not propose shareholder resolutions (sometimes called “shareholder proposals”) either directly or on behalf of clients. Shareholder resolutions tend to cover a wide-range of business issues that are complex and nuanced, particularly in relation to social or environmental factors. In our view, this makes the issue more suitable for engagement than the binary and blunt mechanism of voting. Where, following engagement, we are still concerned that a company might not be dealing with the business-relevant social or environmental factor raised in the shareholder proposal, we may hold the company accountable by voting against the election of relevant directors. We would generally only vote in favor of shareholder proposals where we identified a significant potential threat to shareholders’ interests caused by poor management of the factor under consideration, and even then, only after extensive engagement had not achieved the desired response from management or the board. We may support governance-related shareholder proposals that in our view would enhance shareholder returns.

Our team also publishes statements on our analysis, engagements and votes in relation to certain high high-profile votes at company shareholder meetings. These vote bulletins aim to explain our approach and decision publicly on the day of the meeting, or shortly thereafter, so interested clients and others can be aware of BlackRock’s vote when it is of most relevance to them. We do not disclose our vote intentions in advance of shareholder meetings as we do not see it as our role to influence other investors. Our role is to send a signal to the company about how well we believe the board and management has done in delivering long-term shareholder value. We also file our voting record with the U.S. Securities and Exchange Commission each August; these disclosures are available on our website here and here.


18. How many companies do you engage with? What proportion of your engagements focus on environmental and social issues? What are your engagement goals? Are these goals outcome/action- based (e.g. decreases in emissions or increases in number of women on the board) or means-based (reporting on emissions or number of women on the board)?

Engagement figures for the 2020 Calendar year

The BlackRock Investment Stewardship team consists of 60+ dedicated professionals responsible for encouraging good governance at the companies in which we invest on behalf of clients. The team held 3,501 engagements with 2,110 companies based in 55 markets from January 1 to December 31, 2020. This represented over 65% by value of the equity assets BlackRock manages on behalf of clients, as of December 31, 2020. We held multiple engagements with 22% of the companies.

Please read more about BlackRock’s engagement activity in our Global Quarterly Stewardship Reports, our Annual Stewardship Reports, and our 2020 Approach to Sustainability Report found here.

Engagement is core to our stewardship efforts as it enables us to provide feedback to companies and build mutual understanding about corporate governance and sustainable business practices. Each year, we set engagement priorities to calibrate our work around the governance and sustainability issues we consider to be top of mind for companies and our clients as shareholders. We believe an intensified focus on these issues advances practices and contributes to companies’ ability to deliver the sustainable long-term financial performance on which our clients depend.

As we flagged in Our 2021 Stewardship Expectations, our priorities build on themes that we have focused on for the past several years. We hope that by explaining our areas of focus, company boards and management are better able to assess gaps in their practices and whether they might need to engage with BIS. The priorities provide clients with insight into how we are conducting engagement and voting activities on their behalf. Some issues have long been core components of BIS’ work. Other issues have become priorities more recently, driven by our observations of emerging risks and opportunities for companies, market developments, and changing client and societal expectations. In 2021, our priorities reflect our continuing emphasis on board effectiveness alongside the impact of sustainability-related factors on a company’s ability to generate long-term financial returns. We have mapped our priorities to specific United Nations Sustainable Development Goals, such as Gender Equality and Clean and Affordable Energy, and provided high level, globally relevant Key Performance Indicators (KPIs) for each priority so companies are aware of our expectations.

Where we believe a company is not adequately addressing a key business risk or opportunity, or is not responsive to shareholders, our most common course of action is to hold the responsible members of the board accountable by voting against their re-election.

BlackRock’s Investment Stewardship 2021 engagement priorities are:

  • Board quality and effectiveness – Quality leadership is essential to performance. Board composition, effectiveness, diversity and accountability remain a top priority.
  • Climate and natural capital – Climate action plans with targets to advance the transition to a low carbon economy. Managing natural capital dependencies and impacts through sustainable business practices.
  • Strategy, purpose and financial resilience – A purpose driven long-term strategy, underpinned by sound capital management, supports financial resilience.
  • Incentives aligned with value creation – Appropriate incentives reward executives for delivering sustainable long-term value creation.
  • Company impacts on people – Sustainable business practices create enduring value for all key stakeholders.

Read more about the BlackRock Investment Stewardship team’s engagement priorities here.

Priorities & Key Performance Indicators (KPIs)

For 2021, BlackRock Investment Stewardship (BIS) articulated five priorities: board quality, environmental risks and opportunities, corporate strategy and capital allocation, compensation to promote long-termism and human capital management. The 2021 Priorities are a continuation from 2020, with each Priority now including accompanying criteria for 2021 that aligns with BlackRock’s expectations for measurable disclosure and action toward creating long-term value for shareholders.

For companies that BIS has engaged with on one or more of the Priorities and have not made progress, BIS will hold the longest-serving or most relevant director accountable, as follows:

Board quality and effectiveness

  • BIS seeks to understand how, and how effectively, a board oversees and advises management. A core component of BIS’ evaluation is direct engagement with a board member. In each key regional market, for those companies with which we seek to engage, we expect to have access to a non-executive, and preferably independent, director(s) who has been identified as being accessible to shareholders where appropriate.
  • BIS expects companies to disclose their approach to ensuring appropriate board diversity and, in those markets where we consider demographic diversity a priority, a demographic profile of the incumbent board.

Climate and natural capital

  • Climate - We expect companies to articulate how they are aligned to a scenario in which global warming is limited to well below 2° C, consistent with a global aspirationi to reach net zero greenhouse gas (GHG) emissions by 2050. In order to assess companies’ progress, BIS expects carbon-intensive companies to disclose explicit GHG emissions reduction targets.
  • Climate - Innovation and sustainability are inherently linked. In addition to mitigating climate risk, companies have an opportunity to utilize, and contribute to, the development of current and future low-carbon transition technologies, which are important components for the rate at which emissions can be reduced. We encourage companies to explain how they are positioning their strategy and contributing to solutions for an energy transition plan that supports long-term value generation.
  • Natural Capital - We encourage companies to disclose how their business practices are consistent with the sustainable use and management of natural capital, including natural resources such as air, water, land, minerals and forests. This disclosure should address companies’ impact in the communities in which they operate. Companies with material dependencies or impacts on natural habitats should publish no-deforestation policies and strategies on biodiversity.

Strategy, Purpose and Financial Resilience

  • In explaining their long-term strategy and financial resilience, companies should set out how they have integrated business relevant sustainability risks and opportunities. BIS encourages companies to report in line with the sector-specific metrics issued by the Sustainability Accounting Standards Board (SASB) to support their explanations of how they have considered key stakeholders’ interests in their business decision-making.

Incentives aligned with value creation

  • Incentives should be aligned with performance and value creation and outcomes correlated with a business relevant long-term performance metric, e.g. 3-5-year total shareholder returns or returns on invested capital.

Company Impacts on People

  • Identification of material human capital priorities and disclosure of actions companies are taking to support a diverse and engaged workforce
  • Evidence of workforce diversity consistent with local market best practice
  • Evidence of board oversight, due diligence and remediation of adverse impacts to people arising from a company’s business practices

Read more about BlackRock’s Engagement Priorities and KPIs on our website here.

Measuring success in stewardship needs to focus on change over the long-term as meaningful changes in business and governance practices don’t happen in a single quarter, and maybe not even in one year. We use our voice as an investor to provide feedback and encourage what we consider to be good governance. Company boards and management determine the strategic and operational priorities that in their judgment will best serve the interests of all the investors in the company. Market-level change requires hundreds of companies to shift and update their practices, and thus takes time. Looking forward, we will continue to contribute to the dialogue at the company- and market-level to enhance business, governance and stewardship practices that are aligned with the long-term economic interests of our clients.

For more information, we share specific engagement and vote outcomes in our annual stewardship reports, our quarterly stewardship reports, and our vote bulletins found here and here.

19. What is your policy around the escalation of engagement; how and why might this happen and what is the ultimate tool you might use (e.g. voting against board re-election, etc.)?

Engagement meetings should have an agenda and an anticipated outcome. We generally have an expectation that an engagement will help shape a company’s approach to an issue, improve a company’s disclosure, or inform our voting decision.

It can take several hours of research to prepare for each meeting and follow ups, with the company or with BlackRock investment colleagues is common. If we have called the meeting, we will have a list of the topics we want to cover related to the concerns we have about the company’s approach. In identifying the need and preparing for an engagement, the BIS analyst determines the desired outcomes and timeframe within which we would expect to see them delivered by a company.

The BlackRock Investment Stewardship (BIS) team uses a global engagement tracking tool in BlackRock’s proprietary Aladdin® Research platform. It facilitates our team’s ability to monitor and report engagements and share insights with BlackRock investment teams Features in the module allow us to record if a company’s governance and business practices are in line with our expectations (as outlined in our governance principles and voting guidelines), summarize engagement conversations, track timeframes for change, map environmental, social, and governance (ESG) key performance indicators (KPIs) to engagement priorities and ESG issues, and define and note engagement outcomes. This monitoring and tracking mechanism enables our team to measure progress over time, especially as many of our engagements are long-term and ongoing.

Our Global Principles, market-specific guidelines and key indicators based on our engagement priorities help determine when we might vote against management, including against corporate directors (and in favour of certain types of shareholder proposals) should companies fail to demonstrate material progress against specific measures. The BIS analyst, in consultation with senior team members as appropriate, determines how to escalate should a company not be responsive to our engagement or subsequent votes against management. An initial next step in escalation after an engagement with company management could be to engage with senior members of the board. The most frequent voting escalation is to vote against additional management proposals or for relevant shareholder proposals if a company’s response to our original vote was insufficient. As a predominantly indexed investor on behalf of our clients, we do not have the option to selectively divest from companies in most strategies.

In 2021, consistent with our strategy of intensifying our engagement on sustainability, we made several notable changes to our policies on Environmental & Social factors, in addition to updates to our policies on Governance factors.

We are therefore updating our policies to reflect this, including:

  • transition to a low-carbon economy: clarify our expectation that companies disclose their plan. This is consistent with the recommendations of the TCFD;
  • shareholder proposals: we see voting on shareholder proposals playing an increasingly important role in our stewardship efforts around sustainability;
  • board quality: refining expectations on director tenure and diversity, ensuring a mix of experience and fresh perspectives;
  • key stakeholder interests: we ask that companies report on how they have determined their key stakeholders and considered their interests in business decision-making;
  • diversity, equity, and inclusion: strengthening expectations for board diversity around ethnicity as well as gender; and
  • alignment of political activities with stated policy positions: enhancing our disclosure expectations in relation to political activities to cover significant trade association memberships in the U.S. and to evaluate whether there is alignment with companies’ public statements on material policy issues.

Read more about updates to our Global Principles and market-specific voting guidelines here.

The team’s 2020 Annual Stewardship Report, our 2020 Approach to Sustainability Report, and our Global Quarterly Stewardship Reports are available here.