At the top of the year, BlackRock CEO Larry Fink made a bold claim.
“Climate risk is investment risk,” Fink said in his annual letter to CEOs, pledging that BlackRock—the world’s largest asset manager—would begin holding portfolio companies to account on climate change.
According to the latest research from Morningstar, Fink has not been as good as his word. In the year to date, BlackRock has voted against 86% of shareholder resolutions that requested companies disclose climate change risk.
That’s a significant bump from the 75% of climate resolutions the fund opposed last year—the first year BlackRock’s assent entered double digits. In 2017 and 2018, the group opposed 96% and 94% of climate resolutions, respectively, according to Morningstar’s report.
American Funds was the only other asset manager of five tracked by Morningstar that saw a decline in the number of climate resolutions it approved. Fidelity, State Street and Vanguard all increased the number of resolutions they approved, with the first two voting “for” on the majority of proposals.
“With their massive amounts of money under management, these firms are often among the largest shareholders at many of the world’s biggest companies. Their yay or nay votes frequently make the difference between a shareholder proposal passing or failing,” the report authors said.
In a separate report released this month, Majority Action—a non-profit that advocates shareholder activism—likewise found that BlackRock had “undermined” shareholder efforts to put climate change on the agenda, voting in favor of just 8% of climate change resolutions.
BlackRock maintains it is taking action. In July, BlackRock said it had taken “voting action” against 53 companies that had made “insufficient progress on integrating climate risk into their business models or disclosures.” A further 191 were placed “on watch,” meaning they face the threat of voting action next year.
But shareholder resolutions on climate risk disclosure are in decline. Only 14 were filed this year, compared to 16 last year. Morningstar says the decline reflects, in part, “growing hostility” from the Securities and Exchange Commission towards climate change disclosures—likely referring to the SEC’s August update on the so-called Regulation S-K.
Regulation S-K lays out reporting requirements for public companies. In late August, an update to the regulation passed the SEC commission with two of five commissioners dissenting, lambasting the amendment for falling “silent” on climate change.
“By some estimates, over 90% of U.S. equities by market capitalization are exposed to material financial impact from climate change,” dissenting commissioner Allison Herren Lee said.
“We are long past the point at which it can be credibly asserted that climate risk is not material.”
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Eamon Barrett
-eamon.barrett@fortune.com
CARBON COPY
Russia’s state-backed oil giant Rosneft has said oil majors—such as BP and Shell—moving away from oil and gas and investing more in renewables is posing an “existential threat” to oil supply. Rosneft argues that state-owned oil companies will be required to step in and refill the supply deficit if private companies continue to divest.
Royal Dutch Shell said it will cut up to 9,000 jobs by 2022 as the company responds to a massive slump in earnings caused by the pandemic-era collapse in oil demand. Shell, which employs 83,000 people worldwide, saw income drop 82% in the second quarter, after a 46% fall in the first.
In the wake of the torrent of carbon emission pledges released by corporations this year, Quartz has put together a short and neat guide for assessing whether any hold water. Timeline, scope and transparency are all key indicators.
The G20 energy ministers released a statement Monday committing to stabilizing energy markets by providing bailouts for fossil fuel firms hit by the pandemic. Although the communique does mention the importance of reducing greenhouse gas emissions, it also puts emphasis on creating “circular carbon economies,” which will rely on advances in carbon capture technology.
Brazil’s National Environment Council, known as Conama, voted Monday to overturn measures that had protected the tropical mangrove ecosystems along Brazil's coastline as "permanent preservation areas" and restricted commercial development projects.
Researchers have drawn up a map for creating a planetary “safety net” of protected land to ensure global biodiversity, after the UN recently found its members failed to fully achieve any of the 20 biodiversity targets agreed upon in 2010. The “safety net” requires protecting some 50% of the Earth’s land—a leap from the current 15%.
IN CASE YOU MISSED IT
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BP is laying out its vision for a low-carbon future. Investors are skeptical by Katherine Dunn
CLOSING NUMBER
1%
Filed under unsurprising news: research from Oxfam finds that the wealthiest 1% of the world’s population creates more than double the amount of carbon emissions as the poorest 50%. The richest 10% account for 52% of the world’s emissions. The richest 10%, by the way, are those with incomes above $35,000 a year.
