Last week investment behemoth Blackrock, which has increasingly sought to push its sustainability credentials, published its latest investment stewardship report, revealing that it took “voting action” this year against just 53 companies over climate risk and put another 191 firms “on watch”.
Among the companies let off the hook are Australian oil & gas firms Woodside and Santos. The investment giant has revealed it did not support Paris-aligned target proposals at either, finding itself on the wrong-side of record breaking votes, including majority support for the proposal at Woodside.
Blackrock also revealed in a recent voting bulletin that it opposed Asia’s first ever climate resolution, which called on Japanese banking group Mizuho to publish a plan to align its coal heavy financing with the goals of the Paris Agreement. The proposal received significant support (34.5%), with large European and US asset owners lining up behind it.
Blackrock is one of Mizuho’s largest shareholders, but it said it voted against the proposal through an independent fiduciary, which “determined that the company now has policies in place that address the issues raised in the proposal”.
Earlier this month, however, Blackrock did vote against the management of Daimler over the German automotive firm’s failure to report in line with the Taskforce on Climate-related Financial Disclosures (TCFD).
It voted against the “discharge” of the Supervisory Board’s actions as a whole, as it was unable to withhold support for the board’s chair Manfred Bischoff, who was not up for re-election but is “responsible for climate disclosures”.
Blackrock noted that it “expects disclosures in line with the TCFD framework by next year”.
Daimler is a target company of Climate Action 100+ (CA100+), the investor engagement initiative targeting the world’s dirtiest companies. Blackrock joined the initiative in January as part of its commitment to ratchet up its efforts on sustainability.
The lack of TCFD-aligned reporting in addition to issues around transparency also prompted Blackrock to vote against management at state-owned Czech energy firm Cez, also a target company of CA100+. It voted against the Cez’s remuneration policy, the election of supervisory and audit committee members and changes to its business strategy in response to its concerns, stating that the company’s “limited progress… [in] explicitly aligning its reporting with the TCFD recommendations and lack of public commitments to move towards TCFD-aligned reporting falls short of our expectations of large carbon emitters with a previous history of engagement with BIS on this topic”.
Beyond BlackRock
As major pipeline projects are cancelled across North America and oil and gas majors make billion-dollar write downs on assets, Texas-based liquified natural gas firm NextDecade is seeking to block a proposal calling for greater disclosure on its exposure to potential climate risks.
The proposal, filed by an individual investor, seeks “more information about declining-value and obsolescence risks to the company's sunk and/ or proposed LNG investments as markets inevitably shift away from the company's LNG product over time”.
It describes the company’s Rio Grande and Galveston Liquid Natural Gas plants, expected to be operational by 2024 and 2027 respectively, as “market late comers”, and warns that both projects “face premature obsolescence risk as Paris Accord post mid-century net zero goals approach”.
NextDecade is seeking to avoid the proposal, arguing in a no-action letter to the US Securities and Exchange Commission (SEC) that the filer of the proposal has not met the ownership requirements.
The date of the annual meeting has not yet been announced.
Earlier this year, the same shareholder filed a similar resolution at NextDecade’s rival Cheniere Energy, calling on it to report on the risk of its assets becoming stranded as the market moves away from fossil fuels.
The Texas company unsuccessfully opposed the proposal by arguing that it was both impermissibly vague and related to ordinary business. The resolution was supported by around 27% of shareholders at the annual meeting in May.
Guns
US gun manufacturer American Outdoor Brands – formerly formerly known as Smith & Wesson Holding Corporation – is seeking to dodge a proposal calling on it to adopt a human rights policy that aligns with the UN Guiding Principles on Business and Human Rights.
In its letter to the US securities regulator, the company described the request as “a massive undertaking”, and is seeking to exclude the proposal, filed by US faith investors, on the grounds that it is impermissibly vague, has been substantially implemented and seeks to micromanage the business.
American Outdoor Brands annual meeting usually takes place in September.
Business Roundtable (BRT) Proposals
Next week (29 July), sees a proposal go to the vote at McKesson, calling on the US pharmaceutical firm to make good on the commitments its CEO put his name to when he signed the Business Roundtable’s (BRT) statement on the purpose of a corporation, which appeared to advocate a shift towards stakeholder capitalism.
US non-profit As You Sow highlights in its proposal that, since 1995, the Texas-based firm has paid $2.2bn in legal settlements in misconduct cases. McKesson unsuccessfully attempted to avoid the proposal in a no-action letter to the SEC, arguing that it had already substantially implemented the proposal.
Similar BRT proposals went to the vote this year at US financial heavyweights Blackrock (3.9%), Citigroup (6.9%), Bank of America (9%) and Goldman Sachs (6%).
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