BlackRock Goes Public With Questions To Gun Industry--Update
March 02 2018 - 12:41PM
Dow Jones News
By Sarah Krouse
BlackRock Inc. went public with the questions that it is asking
of gun makers and sellers in the wake of the school shooting in
Parkland, Fla., an unusual step by the world's largest asset
manager.
The notice posted to BlackRock's website Friday is the latest
sign that money managers are ramping up pressure on companies that
make and sell weapons. The questions range from litigation risks
and gun safety to background checks and staff training.
Investing giant Blackstone Group last weekend asked outside fund
managers to detail their ownership in companies that make or sell
guns. State Street Global Advisors, another big money manager, has
said it also plans to reach out to gun makers with questions.
A number of American companies have reassessed their
relationships with the gun industry and the National Rifle
Association following last month's shooting at Marjory Stoneman
Douglas High School. Major retailers including Kroger Co., Walmart
Inc. and Dick's Sporting Goods Inc. said earlier this week that
they would stop selling guns to anyone under 21 years old.
BlackRock is the largest shareholder in gun makers Sturm Ruger
& Co. and American Outdoor Brands, formerly known as Smith
& Wesson, as well as a large shareholder in firms such as
Walmart and Dick's Sporting Goods. BlackRock said in the notice
that it doesn't own any gun makers in its actively managed stock
funds, and in index-tracking funds those companies comprise 0.01%
of assets under management.
The New York money manager has met with clients, including
pension funds and other institutional investors, about ways they
can exclude gun stocks from their portfolios if they wish to and
what the money manager is asking of executives at companies that
make or distribute guns, according to people familiar with those
efforts.
It held one such conference call for large customers as recently
as Friday morning with executives focused on corporate stewardship
and client relationships.
It isn't unusual for BlackRock to ask specific questions of its
portfolio companies, but it is rare for the firm to make those
questions public. It called gun violence "an issue of tremendous
urgency" in the notice posted on its website Friday.
The questions being posed by BlackRock to gun makers and
distributors include broad inquiries such as how they measure the
"financial, reputational and litigation risk" of those respective
businesses and what actions they take to support gun safety and
education.
But it is also posing specific queries of gun makers, such as if
they monitor whether the distributors of their weapons "have a high
volume of their guns identified as having been used in crimes"; if
they are spending money on research to improve gun safety; and if
they require retailers to train their staff or certify that they
conduct background checks.
For gun distributors, BlackRock asked what steps they take to
make sure gun laws are followed such as "prohibiting felons or
domestic abuse offenders from purchasing firearms; sales to minors
of certain products; training provided to employees so they comply
with applicable laws and regulations."
BlackRock previously said it planned to meet with
weapons-related companies but stopped short of publicly
articulating what type of information it planned to ask them for.
It and other managers of index-tracking funds typically keep the
contents of their engagements with portfolio companies private.
"We are fundamentally looking to understand whether the company
has the appropriate policies and controls in place and is
sufficiently managing the risks associated with these issues," the
new BlackRock notice said.
Shareholders like BlackRock are able to vote against individual
directors or in favor of shareholder proposals if companies don't
make progress toward the goals they seek or provide the information
requested.
Write to Sarah Krouse at sarah.krouse@wsj.com
(END) Dow Jones Newswires
March 02, 2018 12:26 ET (17:26 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
Walmart (NYSE:WMT)
Historical Stock Chart
From Aug 2024 to Sep 2024
Walmart (NYSE:WMT)
Historical Stock Chart
From Sep 2023 to Sep 2024