BlackRock and Tesla
Blackrock has been in the news this week, after Keir Starmer met with Larry Fink and other staff and tweeted about it. I’m not a massive fan of this and it’s fair to say the tweet was not greeted with universal acclaim.1 In my view, Labour should be a bit more careful about these kinds of endorsements, partly because I’m unclear who they are likely to impress and partly because the positions financial institutions adopt often end up in conflict with labour.
To give a practical example of this, let’s have a look at BlackRock’s reasoning for opposing the shareholder proposal at Tesla this year that requested the company adopt a non-interference policy with respect to rights at work.
A non-interference policy is broadly intended to commit companies to genuinely respect workers freedom of association and collective bargaining rights. Interference might include well-known tactics such as captive audience meetings, using ‘union avoidance’ advisers, closing or threatening to close sites that unionise and so on.
Regrettably, companies can and do claim to respect workers’ rights whilst participating in this type of activity. So the adoption of a non-interference policy is intended to make paper commitments meaningful.
In justifying its opposition, BlackRock notes that Tesla had introduced language on respecting freedom of association and collective bargaining rights to its Global Human Rights Policy.
It concludes:
Based on our assessment, Tesla’s Global Human Rights Policy already contains components of the shareholder proposal’s request, including a commitment to upholding higher standards where national law and international human rights standards differ. Therefore, BIS determined that support for this shareholder proposal was not warranted.
BlackRock further notes the ongoing industrial action in Sweden, which, by the time the Tesla AGM took place, was already more than six months old. The strike is the result of Tesla’s refusal to engage in collective bargaining with workers in Sweden. To state the obvious, collective bargaining is normal practice in the country and the strike is seen very much as a the company’s failure to respect the local labour relations model.
At this point, it’s worth considering the blurb in Tesla’s human rights policy specifically on labour rights.
In conformance with local law, Tesla respects the right of workers to form and join trade unions of their own choosing or choose to refrain or to form and join other employee representative bodies if applicable, to bargain collectively, and to engage in peaceful assembly as well as respect the right of workers to refrain from such activities.
This is a 58-word sentence. It is written in a typical style you see at US companies that don’t want unions - particularly that emphasis in on the right not to exercise rights.
Since BlackRock refers to the company’s commitment to international standards, here’s that section too:
Where national law and international human rights standards differ, we will follow the higher standard; where they are in conflict, we will adhere to national law, while seeking ways to respect international human rights to the greatest extent possible.
BlackRock’s argument is that the existence of these bits of text is significant enough to oppose the proposal.
The proposal asked for something that goes beyond the existing text. In addition, I think one can reasonably argue that the company’s behaviour in Sweden does not match the policy it has committed to. Especially given the CEO’s very public opposition to unions it is hard to believe that in practice the policy means that workers’ fundamental rights are respected. To vote against the proposal by implying that the Tesla policy already achieves the same aim - the protection of workers’ rights - is not very impressive.
I do not think these are straightforward issues for investors like BlackRock. Its decision-makers might share the Tesla CEO’s desire for the company to remain union-free. But I would have more respect for them if they made this position clear rather than put greater weight on a paper commitment than actual labour relations practice in opposing a proposal on this topic.
And I do wish the Labour Party would think clearly about these issues.
I went and had a look at the tweet because I initially thought what was being shared on Bluesky might be a parody. It isn’t, but the replies to it are something else. Many are from cranky / radical Right accounts. What’s interesting is that a lot of people with Right-wing views now have a negative view about an asset manager’s extensive ownership of stuff.
https://twitter.com/Keir_Starmer/status/1859682871876911310