BlackRock says sustainability reports might slide during pandemic

By Ross Kerber

BOSTON (Reuters) – Top asset manager BlackRock Inc, which has vowed to put more focus on climate issues, said that companies might give a lower priority to sustainability reports as they struggle with the COVID-19 pandemic.

In a stewardship document provided by a BlackRock spokesman late on Tuesday, the firm suggested it would tolerate the change. BlackRock also took a neutral stance on the question of whether companies should continue to pay dividends or buy back shares, and said it expected companies to provide shareholders the chance for “meaningful participation” when they move annual meetings to cyberspace.

The details marked some early specifics from the world’s largest asset manager about its expectations for companies dealing with the sudden economic shock stemming from the deadly respiratory virus.

BlackRock earlier this year outlined tougher policies for the influential proxy votes it casts at springtime annual meetings, including a focus on having companies report more details about topics like their emissions and water pollution.

In its new stewardship document, BlackRock said it encouraged companies to produce such reports, including Sanderson Farms Inc and streaming service Netflix Inc.

But BlackRock also said it had been told by some companies that certain non-financial projects like sustainability reports had been “de-prioritized” due to COVID-19.

“We recognize that in the near-term companies may need to reallocate resources to address immediate priorities in these uncertain times,” BlackRock’s report stated. BlackRock said it would “expect a return to companies focusing on material sustainability management and reporting in due course.”

BlackRock representatives did not provide more details or make executives available for further comment on Tuesday.

In the report, BlackRock said it voted against management recommendations 8% of the time among 2,269 company meetings worldwide in the first three months of 2020. In North America, it voted against management 13% of the time on “miscellaneous” shareholder proposals, the category that includes environmental matters, during the period.

In addition to climate reporting, companies have faced calls to suspend their dividend payments or share buybacks in order to concentrate on paying workers during the pandemic.

BlackRock took a neutral stance on the question, saying that absent regulation, “a company’s decision to pay a dividend or buy back shares should be determined by its management and board of directors.”

(Reporting by Ross Kerber; Editing by Peter Cooney)