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BlackRock

PRI reporting framework 2017

You are in Direct - Listed Equity Active Ownership » Engagement » Outputs and outcomes

Outputs and outcomes

LEA 11. Number of companies engaged with, intensity of engagement and effort

11.1. Indicate the amount of your listed equities portfolio with which your organisation engaged during the reporting year.

Number of companies engaged

(avoid double counting, see explanatory notes)

Proportion (to the nearest 5%)
Specify the basis on which this percentage is calculated

Individual / Internal staff engagements

1234 Number of companies engaged
10 Proportion (to the nearest 5%)

Specify the basis on which this percentage is calculated

Collaborative engagements

0
0 Proportion (to the nearest 5%)

Specify the basis on which this percentage is calculated

11.2. Indicate the proportion of engagements that involved multiple, substantive and detailed discussions or interactions with a company during the reporting year relating to ESG issue.

Type of engagement

% Comprehensive engagements

 

 

Individual / Internal staff engagements

 

 

Collaborative engagements

11.3. Indicate the percentage of your collaborative engagements for which you were a leading organisation during the reporting year.

Type of engagement

% Leading role

 

 

Collaborative engagements

11.5. Additional information. [Optional]

In our engagement tracking system, we do not distinguish between engagements that are collaborative and those that are undertaken by our internal team.  This is because even collaborative engagements (or those that start out that way) will involve direct dialogue solely between the company and our internal team at some stage in the process.  


LEA 12. Engagement methods

12.1. Indicate which of the following your engagement involved.

12.2. Additional information. [Optional]

The approach taken will be influenced by general practice in a market (for example, ESG roadshows are more common in European markets than in the US), the purpose of the engagement and the response from the company (for example, we may follow up an engagement with management with a letter to the board if we believe management is not being deliberate about addressing our concerns).


LEA 13. Engagements on E, S and/or G issues (Not Applicable)


LEA 14. Companies changing practices / behaviour following engagement

14.1. Indicate whether you track the number of cases during the reporting year where a company changed its practices, or made a formal commitment to do so, following your organisation’s and/or your service provider's engagement activities.

14.3. Additional information [Optional].

We don’t track as an aggregate across our invested universe the commitments made by companies and thus can’t provide this number. We do track this within individual company records but not in a way that can be counted as requested. 


LEA 15. Examples of ESG engagements

15.1. Provide examples of the engagements that your organisation or your service provider carried out during the reporting year.

Topic or ESG issue
          Governance and environmental
        
Conducted by
Objectives

To understand the board’s oversight of management on key strategic issues, including climate risk management and portfolio resilience

Scope and Process

BlackRock Investment Stewardship  sought to engage board directors but our request was declined by management on the basis of a non-engagement policy.  As a result we could not assess the board’s role in key strategic decisions and the merits of the board’s recommendation to shareholders to support management’s approach  

Outcomes

We voted against the directors we considered most accountable for director-shareholder engagement.  We continued to engage management and determine how best to escalate our concerns in future 

Topic or ESG issue
          Environmental and governance
        
Conducted by
Objectives

To understand the company’s response to a major environmental disaster in one of their joint-venture operations

Scope and Process

BlackRock Investment Stewardship engaged the chair of the board and senior executives to discuss the disaster, the ramifications for those directly impacted, the steps being taken to mitigate future risk and the consequences for management in terms of penalties.

Outcomes

The company reassured us it was responding appropriately and dedicating sufficient resources to clean-up, cooperating in the external investigation, and taking the necessary steps in terms of redress.

Topic or ESG issue
          Social and governance
        
Conducted by
Objectives

To understand the company’s response to human rights issues in its detention center business 

Scope and Process

BlackRock Investment Stewardship engaged senior management on the issues, the protections that were in place at the time the issues arose, and the steps subsequently taken to radically improve practices.

Outcomes

The new management team demonstrated considerable knowledge of the issues and how best to address them. We encouraged enhanced reporting around the response and the policies and training introduced to reduce the risk of poor practices recurring.

Topic or ESG issue
          Social and governance
        
Conducted by
Objectives

To understand how the board of a troubled financial institution was helping shape improvements in culture

Scope and Process

We engaged the chair of a European financial institution about the cultural issues that had seen the bank incur significant fines and harm to reputation.

Outcomes

The chair explained the concerted efforts that had been made by the board and management to reset the culture, in part through a significant overhaul of incentive pay practices.

Topic or ESG issue
          Governance and social
        
Conducted by
Objectives

To encourage a change in board composition and leadership at a company that has a long track record of poor employment practices, amongst other issues

Scope and Process

BlackRock Investment Stewardship engaged collaboratively with the company, which is controlled, to push for a change in board leadership given the current board had demonstrably failed to protect long-term shareholders’ interests.  This followed a series of frustrating individual engagements.

Outcomes

We attended the shareholder meeting and made our views known to board members. At the meeting, the overwhelming majority of unaffiliated shareholders voted to remove the chairman and backed the shareholder proposal. We ultimately voted against management on several proposals.

15.2. Additional information. [Optional]

The engagements above were across each of the key regions in which our team is based – the Americas; Europe, the Middle East and Africa; and Asia-Pacific.  We publish engagement and voting case studies to the BlackRock website each quarter that are more detailed than the space here allows. 


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