BlackRock, the $9 trillion asset management giant, has stepped up its efforts to push the corporate world toward better governance and more sustainable business models.
Over the past year, it has taken on heavyweights like ExxonMobil and Warren Buffett’s Berkshire Hathaway — and waded into the battle over political donations and lobbying by companies like Pfizer and Tyson Foods, according to BlackRock’s annual investment stewardship report, released Tuesday.
After Berkshire refused to engage in “direct dialogue” with BlackRock for years, the firm said it voted against two directors at Buffett’s company. That’s one high-profile example of the 6,560 times the asset manager voted against corporate management last year.
BlackRock is known for pushing companies to battle climate change, and the firm was a key vote in the contentious, but ultimately, successful proxy battle at ExxonMobil. BlackRock said it voted for three of the nominees of Engine No. 1, the investment firm trying to move the oil company towards a more sustainable future. All three were elected.
Concerns about the environment were also a reason BlackRock voted against the re-election of Berkshire Hathaway’s former chairman of its audit committee and the chairman of its governance committee, according to the report.
BlackRock said in the report that it thought Berkshire was “not adapting to a world where sustainability considerations are becoming material to performance.”
The men it voted against were responsible for “shortfalls in the company’s governance practices, climate action planning and disclosure,” BlackRock said.
The asset manager also supported two shareholder proposals: “one requesting that the company publish an annual report addressing climate change risks and opportunities, and the other requesting that Berkshire Hathaway’s holding companies publish annual reports assessing their diversity and inclusion efforts.”
Buffett, who controls two thirds of the voting shares at Berkshire, has rebuffed the shareholder proposals.
The shareholder proposals BlackRock voted on at Berkshire Hathaway are among the 46 it supported regarding climate-related concerns, according to the report.
BlackRock also used its heft to weigh in on the fraught topic of corporate political lobbying and financing, saying “this is an important issue.”
As a result, it supported political spending and lobbying proposals at Lyft, Tyson Foods, Pfizer, and Charter Communications.
Tyson was one of several U.S. companies that suspended political donations in the wake of the January 6 insurrection at the U.S. Capitol.
But Tyson’s suspension was temporary, and its latest filings to the Federal Election Commission indicate that it has resumed donations to some of the 147 Republican lawmakers who sought to overthrow the presidential election of Joe Biden.
BlackRock said that “significant inconsistencies between publicly stated priorities and affiliated group views on major policy positions could create reputational risk.”
In an earlier commentary on the topic, the firm stated that reputational risks can occur if a company is “ associated with a controversial candidate, party, policy or issue, as well as certain risks that can arise from the complex legal, regulatory, and compliance considerations associated with corporate political spending and lobbying activities in various jurisdictions.”
Over the past year BlackRock voted on more than 13,000 companies and 165,000 management and shareholder proposals across 71 voting markets, the report said.
It also broadened its climate focus to 1,000 companies, supporting 64 percent of the shareholder proposals on the topic.
“It is our belief that successfully mitigating climate change risk will help drive economic growth and will offer investors better long-term returns,” the investment stewardship report said.