What BlackRock Inc. Gets Right in its Newly Minted Human Rights Engagement Policy

Abstract

In March 2021, BlackRock Investment Stewardship published a short but consequential document titled “Our approach to engagement with companies on their human rights impacts.” This represents a significant move by the investment management firm into the global “business and human rights” policy debate. Based in New York City, BlackRock Inc. is the world’s leading investment firm with assets under management worth close to $9 trillion. A publicly traded company, it holds at least a 5% stake in more than half of the firms in the S&P 500. The value of its stock has increased 300% over the last decade. BlackRock’s priorities for 2021 include engaging with firms “whose business practices have breached international norms set forth by the UN Guiding Principles on Business and Human Rights (UNGPs) and the OECD Guidelines for Multinational Enterprises.” What does BlackRock get right in its newly minted global policy on international human rights? The answer to this question might not be what you expect. If human rights are to be considered at all, US asset managers are strongly compelled to consider them only in terms of their instrumental and material value to investors. This situation creates a conundrum for decision makers at firms like BlackRock, since the calculated instrumentalization of human rights for shareholder gain might well be seen to debase the very foundation of human rights. So, what are BlackRock’s people to do if they want to stay within the bounds of US fiduciary law and client expectations while upholding human rights, rather than undermining them? This and other questions are answered in this short essay, published on the Harvard Law School Forum on Corporate Governance in April 2021.