A few weeks ago, BlackRock released its 2023 proxy voting guidelines for U.S. securities – as well as an updated set of its “Investment Stewardship Global Principles.” Here is BlackRock’s summary of those Global Principles and its market-specific voting guidelines (including the U.S. guidelines mentioned above).

The big news is that there isn’t too much news here. That’s after several years of well-publicized voting policy changes that moved the ESG movement forward at a breathtaking pace.

The two Global Principles modifications identified in the summary document are:

  • Natural Capital. Supplementing the existing guidelines regarding management and disclosure of sustainability-related risks and opportunities by encouraging companies to consider reporting on nature-related factors.

    • BlackRock’s commentary on its natural capital engagements, published in February 2022, provides context for what this term means: “Natural capital discussions are increasingly centering on fresh water, oceans, land, and atmosphere, as well as the ecosystems, biodiversity, and the services they each provide.”
    • BlackRock notes in its summary that, “While guidance is still under development for a unified disclosure framework related to natural capital, given the growing materiality of these issues for many businesses, we believe enhanced reporting would help investors’ understanding, and we note that the emerging recommendations of the Taskforce on Nature-related Financial Disclosures (TNFD) may prove useful to some companies.”
  • Timing of Sustainability Reporting. Supplementing the existing guidelines regarding sustainability reporting to encourage companies to provide sustainability-related reports “sufficiently in advance of their annual meeting so that the disclosures can be considered in relevant vote decisions.” This timing issue is one that many companies struggle with as certain data and metrics have not historically been available prior to mailing the proxy statement for the annual meeting.

Notably, BlackRock also significantly revised the wording and organizational structure of the U.S. voting guidelines this year. Except for the two modifications highlighted above, BlackRock has not called out any of the revisions as changes to its policies. Even so, companies may want to review the new text of the guidelines on issues relevant to them to consider whether any of the expanded guidance applies to them. For example, the director overboarding policy was updated to clarify that a director who is a Chair of a publicly listed company in European markets may have such a position counted as equal to two board seats.

BlackRock also expects to issue updates to its “Engagement Priorities” within the next month or so. We will keep you apprised of those updates when they’re issued.

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Photo of Allison Handy Allison Handy

Allison Handy is the firmwide co-chair of the Corporate & Securities practice. Her extensive experience includes advising public and private companies in connection with corporate governance practices, disclosure issues, and capital markets transactions, such as equity offerings, debt offerings and tender offers. She…

Allison Handy is the firmwide co-chair of the Corporate & Securities practice. Her extensive experience includes advising public and private companies in connection with corporate governance practices, disclosure issues, and capital markets transactions, such as equity offerings, debt offerings and tender offers. She is also a leader of the firm’s Environmental, Social, and Governance advisory team.

Allison provides counsel to companies on a broad range of issues faced by management and directors in connection with the many compliance aspects of securities laws, including governance rules adopted by the Securities and Exchange Commission (SEC) and stock exchanges. She advises boards and committees in matters related to internal investigations and the efforts of shareholder activists, and works closely with in-house counsel, financial personnel, and outside auditors and advisors to help her clients prepare proxy statements and other reports to investors that meet complex disclosure obligations.

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