ESG Questionnaire Response - BlackRock Inc.

ESG Policies

1. Please provide your ESG-related policies.

BlackRock’s ESG Integration Statement is available at:

BlackRock’s overall approach to ESG integration is detailed in our December 2020 white paper; outlining our principles based-approach to integration, how we defined our baseline ESG integration, and how COVID-19 has shown the importance of sustainable investing:

BlackRock’s definition of ESG Integration:

BlackRock is a global and diversified fiduciary asset manager and serves clients with a range of investment objectives and beliefs. As such, BlackRock defines ESG integration as the practice of incorporating material environmental, social, and governance data and insights into investment decision-making, alongside traditional financial information, with the objective of improving the long-term financial outcomes of portfolios.

This focus on using financially material ESG data as a new lens to identify previously unpriced risk and opportunity is consistent with approaches taken by leading industry groups including the Principles for Responsible Investment (“PRI”). These organizations describe ESG integration respectively as “the explicit and systematic inclusion of ESG issues in investment analysis and investment decisions” and an effort “to enhance a fund’s financial performance by analyzing material ESG considerations along with other material risks.”

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

Yes, sustainable investing and ESG factors are integrated into all our active investment portfolios and in various forms across BlackRock’s investment platform.

BlackRock’s approach to ESG Integration:

At BlackRock, we have always focused on helping our clients try to reach their long-term investment goals by providing resilient and well-constructed portfolios. Our investment conviction is that ESG- and climate-integrated portfolios can provide better risk-adjusted returns to investors over the long-term, and that ESG-related data provides an increasingly important set of tools to identify unpriced risks and opportunities within portfolios.

BlackRock has a framework for ESG integration that permits a diversity of approaches across different investment teams and strategies and is part of both our active investment process and index investment processes and oversight. As the materiality of ESG considerations varies by client objectives, investment style, sector, and macro considerations, the ESG integration framework needs to allow for flexibility across investment teams. BlackRock’s active investors are responsible for integrating material ESG-related insights, consistent with their existing investment process, with the objective of improving long-term risk-adjusted returns. Depending on the investment approach, ESG measures may help inform the due diligence, portfolio construction, and/or monitoring processes of our active and alternatives platforms, as well as our approach to risk management.

This framework for ESG integration is built upon our history as a firm founded on the principle of thorough and thoughtful risk management. Aladdin, our core risk
management, and investment technology platform, allows investors to leverage material ESG data as well as the combined experience of our investment teams to effectively identify investment opportunities and investment risks. Our heritage in risk management combined with the strength of the Aladdin platform enable BlackRock’s approach to ESG integration.

Active investment approach

Across our active investment processes, we structure our ESG integration efforts around three main themes: investment processes, material insights, and transparency. These pillars drive ESG integration at BlackRock, and we support them by equipping our employees with useful ESG data, tools, and education.

Investment Processes

ESG integration is a core part of the investment process, and as with all other components of the investment process, is the responsibility of our investment teams. All active funds and advisory strategies are expected to fully integrate ESG, meaning that: i) each strategy has a description of how ESG fits into its investment process, ii) portfolio managers are accountable for managing exposure to material ESG risks, and iii) investment teams can provide evidence of how ESG considerations inform investment decisions in each portfolio. Further, across our active funds we incorporate a heightened scrutiny framework for climate to identify and manage over time active positions in issuers with particularly significant exposure to climate transition risk. BlackRock’s Risk and Quantitative Analysis team (RQA) reviews ESG risk alongside traditional investment risks with the investment teams in regular portfolio reviews.

Material insights

For our public market strategies, we are continuously expanding access to high quality ESG data sources through Aladdin. BlackRock’s investment teams have access to a range of third-party data sets and internal materiality-focused research ratings across core Aladdin tools, allowing investors to identify sustainability data for their unique investment process where material. BlackRock investors have access to over 10 unique ESG data providers across distinct parts of our r research environment.

Beyond making third party and internal ESG ratings and metrics available in our core investment tools alongside traditional financial data, the Aladdin platform also offers a set of analytic tools to assess sustainability and climate related risk and opportunity. This includes Aladdin Climate, an evolving platform that helps investors uncover investment risks and opportunities associated with the physical impacts of a changing climate and the uncertain transition to a net zero world. Aladdin Climate provides scenario analysis capabilities, helping investors consider how climate-related risks and opportunities may evolve and their potential business implications under different physical and transition risk scenarios.

Further, portfolio managers, investment research teams, and investment stewardship professionals can share fundamental ESG research and engagement insights via a common Aladdin Research platform, consistent with appropriate information barriers. This supports a scaling of fundamental insights at the issuer level not available through third party data sources and enables dialogue and collaboration across our stewardship and portfolio management teams.

In private markets, which inherently lack availability and standardization of ESG metrics, we continue to progress multiple efforts to better collect, evaluate and measure ESG data across our alternative strategies. For example, in addition to leveraging a growing range of third-party data providers, where appropriate, many alternative investment teams seek to enhance data with more robust self-reported data collected through their ESG questionnaire. We are also enhancing analytics capabilities to turn more data into insights that inform investment decision-making while developing technology solutions – such as eFront Insight’s ESG Outreach program that gathers and analyzes a standardized set of ESG data for LPs and GPs across their investments, thus supporting ESG integration efforts and helping to meet regulatory and disclosure demands. 


Investors at BlackRock believe well-managed companies balance business-relevant ESG issues alongside traditional financial objectives. Consistent with this expectation, we strive to provide market-leading transparency for how we incorporate ESG in our investment products.

We disclose ESG integration practices in fund documentation and on product pages and disclose our firm’s approach to ESG integration through comparable industry relevant reporting frameworks, such as the Principles for Responsible Investment (PRI). For greatest transparency, these reports are publicly available in full on our website. 

With respect to transparency in all BlackRock products, we want investors to be able to access clear information on the sustainability risks associated with their investments. For example, we provide data on our website for all iShares funds, displaying ESG scores and carbon footprints, among other measurements, where available. We have extended this practice to BlackRock mutual funds, including adding disclosures on exposure to sustainability characteristics. We will make this information available to all our clients to help investors choose the best investment option for their portfolio.

Index investment Approach

Across our index investments business, we work with index providers to expand and improve the universe of sustainable or ESG indexes, while our investment stewardship processes encourage the companies in which our clients are invested to manage and disclose material ESG risks effectively.

Index portfolios differ from other portfolios in that they are managed with a focus on minimizing the performance tracking difference versus an underlying index. The composition of the index is the responsibility of the index provider, and the portfolio manager seeks to provide investors with exposure to the constituents of that index. 

Within BlackRock’s ETF and Index Investments (EII) platform, we differentiate between products that have sustainability objectives explicitly outlined in their investment objective or strategies (Sustainable Suite), and those products that do not have such objectives (ESG integrated portfolios).

Sustainable Suite

Products in the Sustainable Suite explicitly outline sustainability objectives in their investment guidelines. As such, their benchmark methodology and investment management approach incorporate the relevant sustainability characteristics. As part of our commitment toward making sustainability our standard, we will continue to develop a sustainable alternative for all flagship index products where these alternatives do not already exist.

Index replication and in-portfolio strategies that have sustainability objectives explicitly outlined in their investment guidelines are rules-based and deliver cost-efficient exposure to companies with ESG characteristics. The objective of the strategy may be to avoid certain issuers (“Avoid”). Alternatively, it may be to gain exposure to issuers with better ESG ratings, an ESG theme, or to generate positive environmental or social impact (“Advance”). Index replication and in-portfolio strategies can also combine elements of Avoid and Advance approaches together.

ESG integrated Portfolios

EII also manages portfolios that do not have explicit sustainability objectives. ESG integration is generally addressed through:

  • Engagement with index providers on matters of index design and broader industry participation on ESG considerations.
  • Transparency and reporting, including methodology criteria and reporting on sustainability-related characteristics of all strategies (e.g., business involvement screens on, fact sheets highlighting key ESG metrics such as rating, carbon footprint and alignment with the UN Sustainable Development Goals) and reporting on sustainability-related characteristics of all strategies.
  • Investment stewardship activities that are undertaken across all investment strategies invested in corporate equity issuers to advocate for sound corporate governance and business practices in relation to the material ESG factors that are likely to impact long-term financial performance.

Key characteristics of BlackRock’s ESG Integration Approach:

1. ESG integration is about investment process – what information investors consider and how it informs portfolio management and risk management - versus managing a product with a sustainable objective. The latter focuses on providing a financial outcome alongside or through a stated sustainability related objective. ESG integration has a single objective: improving financial performance in a portfolio using material sustainability information as a tool to identify new risks and opportunities. As such, we believe that ESG integration is an important tool that can help all investment teams manage negative externalities (including for strategies with sustainable objectives).

2. ESG Integration does not imply a “greening” of all portfolios or divestment from certain assets – though the expectation is that over time, portfolios investing for the long term will, on average, display more positive sustainability characteristics. It does require that exposure to ESG risks is understood and consistent with a portfolio’s objectives. BlackRock believes this will lead to more informed investment decisions, and better outcomes for clients.

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


BlackRock has been a signatory to the United Nations supported Principles for Responsible Investment (PRI) since 2008. The six aspirational statements of PRI provide a framework in which ESG issues can be considered in investment decision-making and engagement with companies, clients, and others. As a signatory, BlackRock commits to uphold all six principles, including Principle 6: We will each report on our activities and progress towards implementing the principles. To that end, BlackRock has submitted a 2020 PRI Transparency Report and has received PRI’s Assessment of that report. Our transparency report is available online at:

In 2020, as in 2019, PRI assessed BlackRock’s ESG integration capabilities to be at or above median scores in each of the reporting segments. This year, we maintained top A+ scores in Strategy & Governance and Listed Equity Active Ownership (what we call investment stewardship). Also, our score for all segments under Managed by BlackRock improved year on year to A or A+. We are pleased to see these continuing strong results against a backdrop of rising median peer group scores, most notable across fixed income sectors.

BlackRock’s 2020 PRI Assessment Scores:

BlackRock’s 2020 PRI Assessment Scores

Source: PRI Data Portal, as of 8/31/2020

PRI’s assessment methodology can be found at and a companion document explaining the assessment of each indicator can be found at: Whether we receive strong or improving scores, we are committed to developing our ESG integration capabilities, and we work continuously to enhance our existing programs.

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.

Other Memberships

Broad-based Initiatives

Environmental Governance

Ascend Foundation’s 5-Point Action Agenda (2021)

Business for Social Responsibility (BSR) (2020)

CECP’s Strategic Investor Initiative (2017)

CEO in Action (2017)

Chief Executives for Corporate Purpose (2021)

Global Impact Investing Network (GIIN) (2020)

IFC Operating Principles for Impact Management (2020)

Increasing Diversity in Innovation (2021)

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)

UN Inevitable Policy Response Operating Group (2021)

100 Women in Finance (2017)

CDP (formerly Carbon Disclosure Project) (2007)

CICERO Climate Finance (2016)

Climate Action 100+ (2020)

Climate Bonds Initiative (2015)

Ellen MacArthur Foundation (2019)

Energy Transition Commission (2021)

Global Canopy (2021)

Green Bond Principles (2015)

GRESB (2011)

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

Partnership for Carbon Accounting Financials (2021)

NZAM – 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)

Terra Carta (2021)

The Terrawatt Initiative (2017)

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

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

FCLT Global (2013)

International Corporate Governance Network (ICGN) (2008)

International Integrated Reporting Council (2011)

Middle East
and Africa

Abu Dhabi Sustainable Finance Declaration (2020)

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

Better Building Partnership (2020)

British Property Federation (2016)

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 Association of Investors for Sustainable Development (2018)

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

Green and Sustainable Finance Cluster Germany (2021)

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

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

Sustainability Committee of DUFAS (2019)

Sustainability and Responsible Investment Committee of the UK  Investment Association (2005)

Sustainable Investing Platform of DNB (2017)

Sustainable Pension Investments Lab (2017)

Sweden’s Sustainable Investment Forum (2021)

Eumedion Corporate Governance Forum (2010)

Corporate Governance and Engagement Committee of the UK Investment Association (2011)

Corporate Governance Forum (1992)

Eumedion Corporate Governance Forum (2010)

Pensions and Lifetime Savings Association Stewardship Disclosure Framework (2015)


Alliance for Inclusive and Multicultural Marketing (2020)

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)

Equity (2021)

SeeHer (2020)

American Wind Energy Association (2016)

Ceres Investor Network on Climate Risk and Sustainability (2008)

Consejo Consultivo de Finanzas Verdes (2020)

Science Based Targets Initiative Expert Advisory Group  (2021)

Taskforce on Nature-related
Financial Disclosures (2021)

Wind Coalition (2018)

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

Hong Kong Investment Fund Association (2007)

Japan Investment Advisers Association (1988)

Keidanren, Japan Business Federation (2010)

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)

Responsible Investment Association Australasia (2011)

Asian Corporate Governance Association (2011)


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

We believe that well-managed companies will deal effectively with material ESG factors relevant to their businesses. As stated throughout this document, governance is the core structure by which boards can oversee the creation of sustainable long-term value - appropriate risk oversight of environmental and social (“E&S”) considerations stems from this construct.

Robust disclosure is essential for investors to effectively gauge companies’ business models and strategic planning related to E&S risks and opportunities. When a company’s reporting is inadequate, investors, including BlackRock, will increasingly conclude that companies are not adequately managing risk. Given the increased understanding of material sustainability risks and opportunities, and the need for better information to assess them, BlackRock will advocate for continued improvement in companies’ reporting and will hold management and/or directors accountable where disclosures or the business models underlying them are inadequate.

BlackRock views the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) and the standards put forward by the Sustainability Accounting Standards Board (SASB) as appropriate and complementary frameworks for companies to adopt for the disclosure of financially material sustainability information. While the TCFD framework was crafted with the aim of climate-related risk disclosure, the four pillars of the TCFD Governance, Strategy, Risk Management, and Metrics and Targets are a useful way for companies to disclose how they identify, assess, manage, and oversee a variety of sustainability-related risks and opportunities. SASB’s industry-specific guidance (as identified in its materiality map) is beneficial in helping companies identify key performance indicators (KPIs) across various dimensions of sustainability that are considered to be financially material and decision-useful within their industry.

Accordingly, in our Investment Stewardship efforts, we ask companies to:

  • Disclose the identification, assessment, management, and oversight of sustainability-related risks in accordance with the four pillars of TCFD; and
  • Publish SASB-aligned reporting with industry-specific, material metrics and rigorous targets.

Companies may also adopt or refer to guidance on sustainable and responsible business conduct issued by supranational organizations such as the United Nations or the Organization for Economic Cooperation and Development. Further, industry specific initiatives on managing specific operational risks may be useful. Companies should disclose any global standards adopted, the industry initiatives in which they participate, any peer group benchmarking undertaken, and any assurance processes to help investors understand their approach to sustainable and responsible business models. 

As stated in our Global Principles, given our expectation that companies operate in longterm shareholders’ interests to create sustainable value and fulfill their purpose, BlackRock believes that companies should take due account of their key stakeholders' interests. It is for each company to determine its key stakeholders based on what is material to its business, but they are likely to include employees, business partners (such as suppliers and distributors), clients and consumers, government and regulators, and the communities in which they operate, as well as investors.

Having regard to the interests of key stakeholders recognizes the collective nature of long-term value creation, and the extent to which each company’s prospects for growth are tied to its ability to foster strong sustainable relationships with those stakeholders. Companies should articulate how they address adverse impacts that could arise from their business models and affect critical business relationships with their stakeholders. We expect companies to implement, to the extent appropriate, monitoring processes (often referred to as due diligence) to identify and mitigate potential adverse impacts, and grievance mechanisms to remediate any actual adverse impacts. The maintenance of trust within these relationships is often equated with a company’s social license to operate.

Read more about our approach to engagement on E and S issues in our position papers:

For more details, please see the links below for the TCFD, SASB and Net Zero Expectation.

2021 TCFD Report (link): BlackRock’s TCFD report provides a comprehensive overview of our approach to managing climate risk.

2020 SASB Disclosure (link): Our firmwide Sustainable Accounting Standards Board disclosure for 2020. In 2020, BlackRock conducted a stakeholder assessment to identify key ESG issues that matter most to its stakeholders and became a participant of the UN Global Compact. Deloitte & Touche LLP performed a review engagement of management’s assertion related to specific metrics within this Disclosure.

BlackRock’s 2030 Net Zero Expectation

We became an early signatory of the Net Zero Asset Managers initiative in March 2021 and released our first 2030 Net Zero Statement in April 2022. The statement covers BlackRock’s assets under management (AUM) as of 30 September 2021, which was $9.5 trillion. The scope of the statement includes corporate securities and sovereign bonds, which represents approximately 77% of the total AUM, about $7.3 trillion. 

Currently, approximately 25% of BlackRock AUM with respect to corporate and sovereign issuers is invested for clients in issuers with science-based targets or equivalent. As the transition proceeds and issuers and asset owners continue to position themselves in front of it, we anticipate that by 2030, at least 75% of BlackRock corporate and sovereign assets managed on behalf of clients will be invested in issuers with science-based targets or equivalent.

Our AUM, which is invested according to the investment objectives and goals of our clients, reflects the mix of today’s global economy. Reaching net zero will require sustained and consistent government policy, accelerated technological breakthroughs, and substantial adaptation in corporate business models. Client portfolios will reflect the regulatory and legislative choices governments make to balance the need for reliable energy, energy affordability, and orderly decarbonization.

BlackRock’s role in the transition is as a fiduciary to our clients. On their behalf, we will focus on analytics, product innovation, stewardship and thought leadership to minimize climate risk in client portfolios. As always, we will continue to be guided by our clients’ investment decisions and do not pursue broad divestment from sectors and industries as a policy. In doing so, we seek to help them understand and navigate the impacts of climate change on their portfolios.

More details on the expectation are available here.

BlackRock’s original commitment to the Net Zero Asset Managers initiative in March 2021 is available here.

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.

Senior representatives from each investment team across the firm lead efforts to integrate ESG considerations within BlackRock’s investment practices. Senior leads are supported by one or more representatives from each investment group, 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 Sustainability Risk Team was launched by the Risk and Quantitative Analysis Group to centralize the team’s oversight of portfolio level ESG integration. The team ensures our investors recognize, assess and measure sustainability risks and opportunities in their portfolios, and continues to grow the firm’s broader sustainability risk oversight capabilities. BSI and RQA partner together with sustainability working groups to harness and scale sustainable insights and analytics into portfolio risk management.

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, Governance, and Sustainability 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.

BlackRock Leadership

ESG Data

Currently, BlackRock leverages third-party ESG data in addition to in-house research to gather company-level information on key ESG indicators.

Our third-party sources include MSCI, ISS-Ethix, RepRisk, Sustainalytics, Refinitiv, Bloomberg, and others listed below. We routinely engage with investment research providers about our views on emerging issues and the type of research we would find useful.

ESG Data Sources

* While BlackRock leverages the above third-party sources to conduct ESG research, not all data sources are currently available within Aladdin tools.

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.

Client Channels

BlackRock is focused on providing greater transparency to our clients particularly around the ESG and temperature characteristics of their portfolios. All public passive funds publish an Implied Temperature Rise metric for our public equity and bond funds, for markets with sufficiently reliable data.

Significant research is underway into temperature alignment and sectoral pathways which will aim to provide a proprietary, intellectually honest, and industry-leading temperature alignment methodology. This work is led by a cross-sectional team of data scientists, climate specialists, programmers, and investors from across the firm. 

These efforts in transparency and reporting build on the ESG reporting efforts we have undertaken in the last few years. Our website fund pages contain information on a range of sustainability characteristics such as Weighted Average Carbon Intensity, ESG Quality score, a fund ESG rating, and business involvement metrics for the funds. This data is available for all BlackRock mutual funds and ETFs globally, through our website and fund webpages.

To further enhance this reporting at the fund level we also included ESG integration statements on product pages and, where possible, engagement and voting statistics. 

We are also working to deliver this data to our institutional or separate account clients through their regular reporting. To do this we leverage the ESG and Carbon reporting template that we have been providing clients on request. 

Standard ESG & Carbon Reporting Template

A standard ESG & Carbon Exposure report is also 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.

Sample template of ESG and carbon exposure report

BlackRock continually seeks to increase the flexibility and scope of our reporting capabilities to meet the demands of our clients and the evolving nature of the ESG data landscape. In 2022 this includes establishing an internal metric approval and usage process for client reporting whilst also enhancing our ability to produce variations of reports for varied client segments. This reporting template development is overseen by a governance process to aid consistency and appropriacy of metrics across our varied investment teams.

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 which enable us to report on the projected climate impact under NGFS scenarios and to compile TCFD reporting for UK funds and reporting templates for SFDR. These can 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 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.

Public Channels

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

2022 Letter to CEOs: In 2022, we continue to advocate for stakeholder capitalism and sustainability as a part of our fiduciary duty. Our conviction at BlackRock is that companies perform better when they are deliberate about their role in society and act in the interests of their employees, customers, communities, and their shareholders. To augment this effort, we are launching a Center for Stakeholder Capitalism to explore the relationships between companies and their stakeholders.

2022 Letter to Clients: In 2022, we released a new framework for how clients can invest in the transition to net zero by leveraging data, analytics, and engagement. We also announced our plan to build and deliver the industry’s most sophisticated transition tools, analytics, and portfolio advice.

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 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


Thought Leadership

Positioning for the net-zero transition

In June 2022, the BlackRock Investment Institute in partnership with BlackRock Sustainable Investing published “Positioning for the net-zero transition”. This paper focuses on how clients can position their portfolios for the net-zero transition to be resilient to its risks, seize its opportunities and strive for more stable and higher long-term returns.

Managing the net-zero transition

In February 2022, the BlackRock Investment Institute in partnership with BlackRock Sustainable Investing published “Managing the net-zero transition”. This paper investigates the investment risks and opportunities of the net-zero transition and details BlackRock’s “Navigate, Drive, and Invent” framework for investing in the net-zero transition.

Addressing climate change in sovereign bond portfolios

Published in January 2022, the BlackRock Systematic team partnered with Climate TRACE, a global independent greenhouse gas emission tracking coalition, to publish a paper on reducing carbon emissions from sovereign bond portfolios versus a benchmark. This paper uses Climate TRACE emissions data, alongside datasets from existing providers, to show how investors can build a carbon-optimized sovereign bond portfolio while maintaining a similar risk and return profile to a given benchmark.

Seeking outperformance through sustainable insights

Published in October 2021, this paper lends further support to BlackRock’s conviction that sustainable assets will outperform non-sustainable assets over the long term. This paper identifies three channels through which sustainability affects investment returns and highlights several emerging datasets that are creating new opportunities for differentiated ESG insights.

Sustainable Investing: Integrating the UN SDGs in Investments

Published in July 2021, this paper explores how the UN SDGs can be viewed through the lens of financial materiality and used for building strategies that invest in the transition towards a more sustainable and equitable world.

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?

BlackRock employs a three-lines of defence approach to managing risks in client portfolios. BlackRock’s investment teams and business management are the primary risk owners, or first line of defence. BlackRock’s risk management function, RQA, serves as a key part of the second line of defence in BlackRock’s risk management framework. Finally, BlackRock’s Internal Audit function, operates as an assurance function. The mandate of Internal Audit is to objectively assess the adequacy and effectiveness of BlackRock’s internal control environment to improve risk management, control, and governance processes.

The BSI Sustainable Investing Innovation team is tasked with helping to define and embed the next generation of sustainable investing at BlackRock. This role entails identifying leading practices in our investment processes and from external sources and enabling the proliferation of these practices through knowledge sharing. The SII team helps set frameworks and create tools to help investment teams meet their integration objectives – the team helps to establish meeting processes in some instances but is not the final owner of implementation or oversight.

A key principle of BlackRock’s ESG integration program is that all investment professionals are responsible for ensuring that material ESG information is appropriately identified and considered in BlackRock’s investment practices. ESG integration experts embedded within investment teams lead this effort, with support from investment team leadership, credit and equity research teams, and centralized expert resources.

Measuring and Reporting on Progress in ESG Integration

BlackRock released a whitepaper detailing BlackRock’s approach to ESG Integration. The paper provides details of each of the principles underpinning our ESG integration approach, how this is put together in different asset classes and strategies, and finally how we provide transparency on how we integrate.

BlackRock reports on elements of our firmwide and investment platform ESG Integration in our PRI report. PRI reporting is led by the Sustainable Investing Innovation team and the Investment Stewardship team in conjunction with our ESG integration leads across our investment platforms and Legal & Compliance. For the 2021 reporting period, the publication of results has been delayed by PRI to ensure data consistency and accuracy. Results of the assessment are expected in mid-June 2022. 

Standard ESG reporting templates are available for our public index and mutual funds detailing the sustainability characteristics of our portfolios such as exposure to thermal coal, MSCI implied temperature rise (ITR) and business involvement metrics. In addition, all active investment teams at BlackRock have articulated how they integrate ESG into their investment processes in their fund-level ESG investment statements, which are available on their website. Our broader investment platforms by asset class each have statements articulating how their investment processes integrate ESG, which are updated annually to reflect the latest practice.

BlackRock performs annual reporting on sustainable investing in line with regulatory expectations such as SFDR Article 3 requirements. Finally, we update our firm wide ESG Integration Statement annually to reflect our current state of practice and publish papers periodically on Sustainable Investing milestones that we achieve.


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

BlackRock believes that sustainability risk, including climate risk, is investment risk. Accordingly, sustainability is a key component of our investment approach. At BlackRock, we have multiple approaches to identifying, assessing, and managing climate risks.

Portfolio Analysis of Climate-Related Risks and Opportunities

The BlackRock Sustainable Investing team offers clients in-depth analysis on climate-related risks and opportunities across their portfolios. We view two primary sources of climate-related investment risk:

1) Physical Risk, whether acute or chronic, arising from the physical effects of climate change, such as climate-related extremes (heat waves, droughts, floods, cyclones, and wildfires) or changing patterns (precipitation, melting snow or ice altering hydrological systems, water stress, etc.)

2) Transition Risk, whether policy and legal, technology, market, or reputation risk, arising from the transition to a low-carbon economy, in order to mitigate climate change. 

To understand both Physical and Transition Risks, we currently use a range of climate exposure metrics, such as carbon emissions, Low Carbon Transition Readiness Scores or Climate focused engagement scores and are developing a suite of climate risk models and analytical tools, including physical climate risk models, transition climate risk models and temperature alignment models.

We have also engaged with companies on environmental risks and opportunities for several years. Each year we build on our expectations of companies as we seek to understand how they are mitigating climate-related risks and implementing plans to transition to a low-carbon economy. In addition, companies should consider their impact and dependence on natural capital. The management of these factors can be a defining feature in companies’ ability to generate long-term sustainable value for shareholders.

The aims of our climate risk engagements remain three-fold:

1. To gain a better understanding, through disclosures, of the processes that each company has in place to manage climate risks

2. To better understand their processes and plans for mitigating climate risks and capitalizing on potential opportunities; and

3. We engage with companies to make more informed voting decisions. Our climate risk engagements center on a company’s potential for alignment with the TCFD recommendations: a four-pronged approach concerning governance, strategy, risk management, and metrics and goals.

For more details regarding our approach to engagement on climate risk please refer to: and for details regarding our Climate Focus Universe, please refer to:

Aladdin Climate

Central to understanding – and ultimately acting upon – the effects of climate change on investments is a need to quantify the financial impact of climate-related risks. We are building Aladdin Climate to quantify climate risks and opportunities in financial terms – bridging climate science, policy scenarios, asset data, and financial models to arrive at climate-adjusted valuations and risk metrics.

Aladdin Climate powers a new set of climate analytics, created by and for investors. It combines industry-leading climate science and data, with security-specific valuation models to deliver climate-adjusted valuations and risk metrics. These analytics are made available throughout the Aladdin platform, enabling full integration across the investment process.

Investment teams will vary in the specific ways they employ Aladdin Climate’s analytics. Aladdin Climate can be used for investment integration, ongoing risk management, and stakeholder and regulatory reporting, serving many different use cases across the investment lifecycle. Users can toggle through different forward-looking emissions scenarios, percentiles, and time horizons, informing portfolio optimization as investment teams see appropriate. The goal is to help investors understand and act upon climate risks and opportunities in their portfolios. We are simply increasing awareness of sustainability and climate-related risks present in portfolios allowing investors and clients to use ESG insights and data to make long-term risk-adjusted investment decisions aligned with their portfolio objectives.

Heightened Scrutiny Framework

Additionally, for active portfolios, BlackRock is implementing a “heightened-scrutiny model” in our active portfolios as a framework for managing securities that pose significant climate risk. The HSF is a methodology, scalable tool, process, and governance structure that is applied across our active platform. The framework identifies a universe of holdings with significant climate-related risk, allows managers to document and respond investment rationale to active exposures in these holdings, and provides a structure to support the application of framework in a scalable way.

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

At BlackRock, we believe investors should incorporate climate awareness into their investment processes. As a fiduciary and long-term investor, we not only recognize that ESG issues, including climate risk considerations, can have real and quantifiable financial impacts, but we also further believe that climate change will fundamentally reshape modern finance. Our climate research efforts are geared towards helping clients navigate this transition by achieving better risk-adjusted returns.

Climate risk research is carried out by several teams at BlackRock, including the BlackRock Sustainable Investing team, the BlackRock Investment Institute, our investment teams, and Aladdin Sustainability Lab (ASL), which is responsible for building products and capabilities that are needed to quantify the impact of climate risk and other sustainability factors on financial assets.

BlackRock has published two recent papers on climate-related risks and opportunities from the net zero transition, and these are available below:

In June 2022, the BlackRock Investment Institute in partnership with BlackRock Sustainable Investing published “Positioning for the net-zero transition”. This paper focuses on how clients can position their portfolios for the net zero transition to be resilient to its risks, seize its opportunities and strive for more stable and higher long-term returns.

In February 2022, the BlackRock Investment Institute in partnership with BlackRock Sustainable Investing published “Managing the net-zero transition”. This paper investigates the investment risks and opportunities of the net-zero transition and details BlackRock’s “Navigate, Drive, and Invent” framework for investing in the net-zero transition.

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

The strategy defines ESG integration as the practice of incorporating material ESG information into investment decisions to enhance risk-adjusted returns. To us, integrating ESG information, or sustainability considerations, should be part of any robust investment process and means adapting research and investment processes to account for additional sources of risk / return that are explained by ESG information. 

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.

Building better futures through sound environmental management is important to our employees, clients and other stakeholders, and key to securing our future. This long-term view comes to life in our commitment to saving, protecting, and restoring our natural environment by better managing our resources in the operations of our business. In operating our business, BlackRock pursues a sustainability strategy that seeks to decouple company growth from our impact on the environment, while increasing the efficiency and resiliency of our operations. BlackRock’s operations are carbon neutral in Scope 1, Scope 2, and Scope 3 employee business travel, serviced offices, and co-located data centre emissions. We have been offsetting 100% of our travel-related emissions since 2017 and we achieved our goal of 100% renewable energy globally as of June 2020.

Additional insight into our environmental strategy can be found in BlackRock’s TCFD report.

We are using third party data, MSCI available in Aladdin, please see below for the Definitions of Carbon Emissions:

Emissions Intensity (Total Capital): A portfolio's Weighted Average Carbon Emissions Intensity by Capital is achieved by calculating the carbon intensity (Scope 1 + 2 Emissions / $M Total Capital) for each portfolio company and calculating the weighted average by portfolio weight. The underlying holdings’ Scope 1 + 2 Emissions data is sourced from MSCI and BlackRock divides emissions by Total Capital (Total Debt + Total Equity). 

Emissions Intensity (Sales): A portfolio's Weighted Average Carbon Emissions Intensity by Sales is achieved by calculating the carbon intensity (Scope 1 + 2 Emissions / $M Sales) for each portfolio company and calculating the weighted average by portfolio weight. The underlying holdings’ Emissions Intensity data is sourced from MSCI.

Emissions Scope: Emissions Intensity by Sales and Total Capital cover Scope 1 + 2 Emissions where scopes are defined as indicated below:

• Scope 1 emissions are those from sources owned or controlled by the company, typically direct combustion of fuel as in a furnace or vehicle.
• Scope 2 emissions are those caused by the generation of electricity purchased by the company.
• Scope 3 emissions include an array of indirect emissions resulting from activities such as business travel, distribution of products by third parties, and  downstream use of a company's products (i.e., by customers).

MSCI’s Methodology:

• MSCI reports the carbon footprint of its flagship global indexes for investors who are looking to understand, measure and manage carbon risk.
• MSCI measures carbon emissions and intensity associated with companies in the indexes, drawing on carbon expertise and research provided by MSCI ESG Research.
• Based on the carbon emission data, MSCI calculates Index Weighted Average Carbon Emission Intensity ratio which will help to understand the exposure to carbon intensive companies for its investors.
• MSCI measures carbon emissions and intensity associated with companies in the indexes, drawing on carbon expertise and research provided by MSCI ESG Research.
• MSCI ESG Carbon Metrics evaluates approximately 8,500 companies, including all constituents of the MSCI ACWI Investible Market Indexes. When reported carbon emissions data is not available, Scope 1 & 2 carbon emissions are estimated using MSCI ESG Research’s proprietary carbon estimation model. Using MSCI ESG Carbon Metrics, MSCI provides a variety of metrics for assessing the carbon characteristics of an index or investment portfolio. Based on both reported and estimated Scope 1 & 2 carbon emissions, MSCI measures the carbon responsibility, efficiency, and exposure attributed to the MSCI Indexes.

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

In its operations, BlackRock pursues a sustainability strategy that seeks to decouple company growth from the firm’s impact on the environment, while increasing the efficiency and resiliency of BlackRock’s operations. Finding innovative ways to power BlackRock’s business with clean energy, lower the firm’s emissions, and reduce waste, among other efforts, reduces BlackRock’s environmental impact. BlackRock’s environmental sustainability strategy is primarily focused on reducing emissions. In 2020, BlackRock reached carbon neutrality in its operations. BlackRock reached this milestone by employing energy efficiency strategies, achieving its 100% renewable electricity goal, and compensating for those emissions the firm could not otherwise eliminate through the purchase of carbon credits.

Please view the Operations section in BlackRock’s 2021 TCFD Report for more information on our environmental sustainability strategy, including targets, and progress.

In support of our commitment to transparency, we published our TCFD Report. Additional climate-related corporate reporting can be found in our annual CDP Climate Change submission. We obtain third-party verification for our Scopes 1 and 2 emissions, as well as for our Scope 3 business travel, employee shuttles, fuel- and energy-related activities (FERA), supply chain and waste greenhouse gas emissions.

12. For the mandate you manage for Queen’s, what percentage of equity holdings (if applicable) have credible net zero commitments?

Given that this is a fixed income-based strategy, the fund has total -0.2% Notional Market Value (NMV) % exposure to equities as of 5/31/2022, with 0.4% NMV exposure to equities that meet the Science Based Targets initiative (SBTi) emissions targets.

13. How do you assess the credibility of a company’s emission reduction targets?

Please refer to our response to question #10 above.

14. What forward-looking metrics do you use to assess an investment’s alignment with global temperature goals?

BlackRock provides publicly available data on Sustainability Characteristics of investment products offered to clients. At the fund level, BlackRock publishes climate-related metrics including Weighted Average Carbon Intensity (WACI) and Implied Temperature Rise (ITR), on product websites for ETFs and mutual funds where reliable data are available. WACI measures a portfolio’s exposure to carbon intensive companies by representing the estimated GHG emissions per $1 million in sales across the fund’s holdings. WACI is one of the metrics recommended for client reporting in the TCFD Supplemental Guidance for Asset Managers. Investors can use WACI as a comparable and standardized metric to assess the average emissions output associated with a specific portfolio.

In December 2021, BlackRock began publishing the MSCI Implied Temperature Rise (ITR) metric for public equity and bond exchange traded funds (ETFs) and index mutual funds in markets with sufficiently reliable data. This was done to support our commitment to giving clients more transparency into their investments. For more details, please see the link below:


15. 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:

Global Executive Committee-1

Global Executive Committee-2

Biographies for members of the GEC are available at

Board of Directors

BlackRock’s Board of Directors has 18 members, 16 of whom are independent and not affiliated with the company.

Board of Directors-1

Board of Directors-2

1 Denotes independent board member
2 Effective July 2015, Susan Wagner qualified as independent as defined by the New York Stock Exchange (“NYSE”) listing standards.
3 Will not stand for re-election at the next Annual Meeting of Shareholders in 2022.

Note: Biographies for current Board members are available on our external website.

As part of its long-term commitment, BlackRock has instituted a multi-year DEI strategy that we believe is actionable, measurable, and designed to be relevant and applicable in different parts of the world. We review our DEI strategy at least annually, along with the corporate policies and programs that support it, so that the strategy remains aligned with the firm’s business priorities and long-term objectives.

BlackRock’s DEI strategy centers on three key pillars:

1. BlackRock’s Talent and Culture across the Globe – by attracting, hiring, developing, and retaining a diverse talent pipeline, cultivating an inclusive, equitable work environment in which employees feel connected to the culture and supported in pursuit of their goals, and fostering a connected culture among the firm’s approximately 18,000 employees

2. BlackRock’s Role as a Fiduciary on Behalf of Clients – leveraging ESG focused financial products as competitive differentiators and strengthening client relationships by engaging them on DEI 

3. Policy and Social Impact in Underserved Communities – continuing to increase transparency on diversity disclosures and contributing to and investing in the long-term success and sustainability of underserved communities.

BlackRock embraces the responsibility it has to its employees and to the communities in which it operates, but also recognizes the scale and depth of realizing success and the sustained focus and efforts required to advance DEI at BlackRock and beyond.

Proxy Voting

16. 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. From our voting experience in 2021 and in summary of the details below, BlackRock voted against director elections 10% of time and did not support the management recommendation in 12% of proposals. Further, BIS supported 34% of ESG proposals. Please see more details below and on pages 59 to 62 of our BIS Annual Report for more statistics. Feel free to reach out to BlackRock for any additional information.

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 are likely to vote against management. Our voting statistics and our market-specific  voting guidelines are available on our website here.

Annual Stewardship Reports

In March 2022, BlackRock Investment Stewardship (BIS) published its 2021 Investment Stewardship Calendar Year Annual Report. This report covers our  stewardship activities on behalf of clients from January 1, 2021, through December 31, 2021, with a focus on engagement and proxy voting.

BIS serves as an important link between our clients and the companies they invest in – and the trust our clients place in us gives us a great responsibility to advocate on their behalf. This report aims to provide further clarity and insight to our clients, the companies they are invested in, and our other stakeholders about our approach to investment stewardship and the issues that are critical to long-term value creation. In 2021 our stewardship team:

  • Held over 3,600 engagements with more than 2,300 unique companies across 57 markets, covering 68% of our clients’ equity assets under management.
  • Voted on behalf of clients at over 17,000 shareholders meetings globally and a total of over 164,000 proposals.
  • Held more than 300 meetings with clients to get their perspectives on stewardship and better understand their thinking on the issues that are important to their investments.
  • Participated in over 400 marketplace engagements and contributed formally in written submissions to 18 public policy consultations.

Our engagements often span multiple years and throughout each year, leading to stronger relationships with companies and more constructive outcomes for shareholders and businesses alike. Our analysts’ sector expertise and local market knowledge allows for informed dialogue and strong understanding of the issues most material to companies’ ability to create long-term value for our clients. This is illustrated through 23 case study briefs presented in the report.

Moving into the 2022 proxy season, we expect continued focus on our engagements with companies on clients’ behalf, including on how they are addressing material ESG risks and opportunities within their businesses. At the same time, we very much recognize the difficulty companies face in navigating ever more complex operating environments, and we remain committed to long-term, constructive dialogues with companies on the issues that we believe are most likely to impact companies’ ability to generate the financial returns our clients depend on.

2021 Annual Stewardship Report Voting Recap

Voting report

Our 2021 Voting Spotlight Report, and our vote bulletins provide practical examples of the team’s work over the year. We emphasize the outcome of our engagements with companies, including some which have spanned several years. We also provide examples of where we have contributed to the public discourse on corporate governance and investment stewardship. All reports are available on our website here.

Read more in BlackRock Investment Stewardship’s engagement priorities and related commentaries on our approach to engagement on related issues here and our Global Principles and market-specific proxy voting guidelines can be found here.

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

The below provides an overview of votes on ESG shareholder resolutions for 2021.

BIS voting

Read more about our votes on ESG shareholder resolutions in our 2021 Annual Stewardship report.

18. 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?

Our clients’ investment returns depend on the success of the companies in which they are invested. Executive compensation is an important tool used by companies to drive long-term value creation by incentivizing and rewarding executives for the successful delivery of strategic goals and financial outperformance against peers. However, when compensation policies are not appropriately structured, and when outcomes are misaligned with performance, companies may face business and/or reputational risks. To that end, appropriate and transparent compensation policies are a focus in many of BIS’ engagements with companies we invest in on behalf of clients. We believe companies benefit from disclosing how they seek to ensure that compensation policies and outcomes are consistent with the financial interests of long-term shareholders. 

BIS looks to a company’s board of directors — specifically its relevant committee — to put in place a compensation policy that incentivizes and rewards executives against appropriate, rigorous, and stretching goals tied to relevant strategic metrics, especially those measuring operational and financial performance. BIS also looks to compensation plans to appropriately balance retention-oriented awards with performance-oriented awards based on the context of the company and each executive. Companies may encourage, and possibly implement, share ownership guidelines for executives to further align the interests of management and shareholders.

BIS believes long-term shareholders’ interests are served when a meaningful portion of a company’s executive compensation plan is tied to the long-term consistent performance of the company, as opposed to merely short-term increases in the stock price. The vesting schedules and holding periods associated with incentive plans should facilitate a focus on long-term value creation.

Globally, BIS supported 80% of the 14,6062 compensation related management proposals put to a shareholder vote in 2021; this includes votes in support of “Say on Pay” proposals — also known as remuneration reports — remuneration policy proposals, proposals to approve incentive plans, and other compensation-related proposals. 

In EMEA, BIS supported management recommendations on 70% proposals — or 3,678 out of 5,281 — to approve compensation policies. As noted before, our votes on behalf of clients reflected our concerns about certain COVID-19-related in-flight adjustments, as well as companies’ transparency in response to higher expectations such as those set by the enhanced reporting requirements in SRD II.

Turning to the Americas, in our multi-year engagement on incentives aligned with value creation we have observed that companies, in general, publish high-quality disclosures that are helpful in building an understanding of how they are aligning their compensation practices with long-term value creation. In the Americas, BIS supported management on 90% of compensation-related proposals in 2021 (4,536 out of 5,029).

Read more in our 2021 Annual Stewardship Report here (engagement and voting on renumeration can be found on page 85).

Read more in our approach to engagement on incentives aligned with value creation here.

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

We do not file shareholder resolutions, although in markets where this is accepted practice we may participate in joint shareholder-company meetings where we believe it will advance our engagements on behalf of clients more effectively. Our approach to engagement has long centered on private dialogue with companies, setting out our views and concerns and discussing ways these could be addressed. Where we have sizable holdings, we believe it is even more important to engage in a discreet manner, rather than to publicly criticize or confront management, and to build relationships with companies that will enable us to influence change when necessary.

20. Have you ever voted against a director for explicitly ESG-related reasons? If so, why? If not, would you consider doing so in the future?

Yes. Our clients’ investment returns depend on the success of the companies in which they are invested. As we explain in our Global Principles, we consider the performance of the board key to the economic success of a company and the protection of shareholders’ interests. We believe that companies with experienced, engaged, and diverse board directors, who actively advise and oversee management, better contribute to the company’s long-term value creation. That is why board quality and effectiveness remains one of our top engagement priorities, and factor in the majority of votes cast on behalf of those clients who have given us authority.

BIS sees the election of directors as one of our most important and impactful responsibilities. When we are interested in understanding how the board fulfils its responsibilities on key governance and business issues, we seek to engage with the responsible non-executive directors. We appreciate when companies disclose how, and how effectively, board members oversee and advise management. We look to directors on key committees to demonstrate that they have taken into consideration the interests of long-term shareholders — such as BlackRock’s clients — and other stakeholders as they make the decisions that shape their companies. We find it helpful when boards communicate their approach to director responsibilities and commitments, turnover, succession planning, and diversity, among other issues. These perspectives are discussed in our Global Principles and in each of our market-specific voting guidelines.

We have voted for and against a director for ESG-related reasons in the case of ExxonMobil Corporation – please see the related Vote Bulletin published here for more details.

More climate related vote bulletins for more examples can be found on our Investment Stewardship website.


21. 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)?

In 2021, our stewardship team held 3,642 engagements with more than 2,354 unique companies across 57 markets, covering 68% of our clients’ equity assets under management (AUM). Engagement supports our stewardship efforts as it provides us with the opportunity to improve our understanding of the business risks and opportunities that are material to the companies in which our clients invest. Engagement also informs our voting decisions when our clients authorize us to vote proxies on their behalf. We vote based on our clients’ long-term financial interests.

BlackRock engagement statistics 2021

Engagements based on BlackRock’s Engagement Priorities:

• Board quality and effectiveness – 2,142
• Strategy, purpose and financial resilience – 2, 038
• Incentives aligned with value creation – 1,213
• Climate and natural capital – 2,293
• Company impacts on people – 1,247

Source: BlackRock, Institutional Shareholder Services (ISS), Sourced on January 31, 2022, reflecting data from January 1, 2021, through December 31, 2021.

Please read more about BlackRock’s engagement activity in our Annual Stewardship Reports, and our 2021 Voting Spotlight Report found here (specifically pages 57 and 58).

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 models. 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 2022, 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 reelection. 

BlackRock’s Investment Stewardship engagement priorities are:

  • Board Quality and Effectiveness: We believe boards should aspire to meaningful diversity of membership, while recognizing that building a strong, diverse board can take time.
  • Strategy, Purpose, and Financial Resilience: Purpose-driven companies that effectively balance stakeholder considerations while delivering value for their shareholders have been better able to attract long-term capital and build financial and business resilience to help navigate volatility.
  • Incentives Aligned with Value Creation: Having appropriate incentives rewards executives for delivering sustainable long-term value creation.
  • Climate and Natural Capital: We ask companies to discuss in their reporting how their business model is aligned to a scenario in which global warming is limited to well below 2°C, moving towards global net zero emissions by 2050.
  • Company Impacts on People: Sustainable business models create enduring value for all key stakeholders.

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

BIS engages with portfolio companies to encourage corporate governance and business models aligned with sustainable long-term financial performance. The team of more than 65 professionals across the world (with team members in New York, San Francisco, London, Amsterdam, Frankfurt, Japan, Singapore, Hong Kong, and Australia offices), takes a local approach with companies while benefiting from global insights. BIS is positioned within the firm as an investment function and works closely with BlackRock’s active investment teams. Our stewardship perspectives are available to them through the Aladdin platform as core tenets of good governance — board oversight, management quality and sustainable business models — are factors in the investment decision-making of both equity and debt investors.

The team engages companies from the perspective of a long-term investor and irrespective of whether a holding is in an active or indexed investment strategy. Engagement is a critical mechanism for providing feedback on or signaling concerns about governance and sustainability factors affecting long-term performance. This is particularly important for our clients invested in indexed funds, which represent a significant majority of BlackRock’s equity assets under management, as they do not have the option to sell holdings in companies that are not performing as expected.

22. 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 models 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 enable 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 2022, consistent with our strategy of intensifying our engagement on sustainability, we are making 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:

  • Climate risk: We continue to ask that companies disclose a net zero-aligned business plan that is consistent with their business model and sector. For 2022, we encourage companies to demonstrate that their plans are resilient under likely decarbonization pathways, and the global aspiration to limit warming to 1.5°C. We also encourage companies to disclose how considerations related to having a reliable energy supply and just transition affect their plans.
  • Board diversity: We are strengthening our focus on diversity of personal characteristics on boards, which in our view should aspire to have meaningful diversity of membership, at least consistent with local market regulatory requirements and best practices. We recognize that building a strong, diverse board can take time.
  • Sustainability reporting: Given continuing advances in sustainability reporting standards, in addition to our ask that all companies report in alignment with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD), we are evolving our perspective on sustainability reporting to recognize that companies may use standards other than that of the Sustainability Accounting Standards Board (SASB) and reiterate our ask for metrics that are industry- or company-specific.
  • ESG in executive compensation: We highlight that if environmental, social, and governance (ESG) criteria are included in executive compensation programs, those metrics should be rigorous, aligned with a company’s strategy and business model, and linked to company performance.
  • Changes to corporate form: We introduce our position that companies or shareholders proposing to change a company’s corporate form (e.g., public benefit corporation) should put the measure to a shareholder vote, if not already required to do so under applicable law. Managers or shareholders proposing the change should clearly articulate in their proposal how shareholders and different stakeholders would be impacted.