Appearance or substance of Stewardship and ESG reporting? The challenges of translating ‘commitment’ into tangible outcomes

Abstract

Purpose This paper aims to examine the stewardship practices of BlackRock, one of the world’s biggest index managers, to highlight a tension and contradictions associated with demonstrating sustainability leadership and its actual substance. Design/methodology/approach To support its argument, this paper draws on the author’s long-standing industry and academic experience, existing academic evidence and documentary analysis. Findings This paper reveals conflicting data, highlighting a tension between BlackRock’s commitment to environmental, social and governance (ESG) in its public statements and translating this commitment into tangible outcomes through voting, ESG investments and stewardship reporting, which seem to be more assumed than demonstrated. Research limitations/implications This viewpoint is based on a review of existing evidence. It offers some critique on current stewardship reporting practices, which has implications for management and policymakers. It identifies areas for future research in the area of stewardship and ESG reporting. Practical implications This paper highlights the need for a more critical interrogation of investor stewardship and ESG reporting and a more joined-up policy and regulatory approach to stewardship and sustainability reporting. Social implications Improving stewardship practices of asset managers will help enhance the social value created by the financial services sector. Originality/value In drawing on personal experience and existing literature, the originality lies in the combination of arguments brought together to highlight the challenges of making sense of the conflicting ESG reporting data to see how this may impact policies, regulation and future practices in the area of sustainability and ESG reporting.