by Blair Schoenborn
Duquesne Professor Connie Bentzen invited our cohort to join her International Finance class to hear a guest lecturer from BlackRock speak about Corporate Governance and Responsible Investing. With $4.1 trillion invested in more than 7,000 portfolios, BlackRock is the world’s largest asset management institution. Jack spoke about BlackRock’s Proxy Voting and ESG (Environment, Social, and Governance) Investment Integration services.
The Process BlackRock’s Corporate Governance and Responsible Investment (CGRI) team partners with portfolio managers to integrate ESG issues into their investment strategy. This happens in a three-step process:
1) Research and Issue Spotting – This is driven by their internal guidelines for research and meetings with clients and companies to determine issues and management of those issues, respectively.
2) Review and Engagement – This involves in-depth research leveraging the expertise of portfolio managers and engagement with the company in question as necessary.
3) Vote Execution – BlackRock votes with one voice, meaning through meetings and review of research they are able to come to a decision for the vote; all votes are reviewed by an oversight committee both monthly and quarterly.
As a student of sustainability in business operations, and especially in finance, it was interesting to hear how the world’s largest asset management company is successfully integrating environmental, social, and corporate governance issues into their portfolio management strategy.
As an individual, and a novice investor in the stock market, it was also enlightening to learn of the power that a proxy voting system can have in influencing governance and responsible investing.
Overall, it was an eye-opening and thought-provoking lecture. Visit BlackRock’s website to find out more.