The Sustainability Accounting Standards Board (SASB) was formed in 2011 to formulate social and environmental disclosure standards in line with definitions of financial materiality under U.S. securities laws. Financial materiality is a critical feature from the standpoint of mainstream investors, as many of them construe their fiduciary responsibilities to mean that any engagement or voting effort directed toward ESG issues must have monetary benefits for their customers.

Once the final standards were published in 2018, As You Sow began to file resolutions requesting disclosure of various topics in a SASB-compliant manner, to gain the support of mainstream investors for sustainability reporting. Of fourteen resolutions filed, seven were satisfactorily settled and withdrawn, two were omitted, and one received 41 percent support last year.

A resolution concerning climate change-related water risk at the poultry processor Sanderson Farms garnered 11.1 percent on February 13 this year and it is the first to test BlackRock’s recent change in its engagement priorities.

Larry Fink’s 2020 letter set new guidelines for voting in support of shareholder resolutions and against directors: “This year we are asking the companies that we invest in on behalf of our clients to…publish a disclosure in line with industry-specific SASB guidelines by year-end…we will be increasingly disposed to vote against management and board directors when companies are not making sufficient progress on sustainability-related disclosures and the business practices and plans underlying them.” These statements provide the proponent community with a golden opportunity to hold BlackRock accountable.

Sanderson’s board was against the resolution, and urged shareholders to reject it, but in the press release announcing voting results, the company stated that it would implement the proposal. Moreover, Sanderson committed to go beyond what the proposal requested in terms of sustainability disclosure, and produce a complete SASB report in FY 2020. Notably, the press release explained that Sanderson reversed course after “recent extensive engagement with many of its largest stockholders, and in recognition of evolving investor expectations in regard to sustainability reporting.” For a first-time resolution this may be an unprecedented reaction.

It is highly doubtful that BlackRock voted for the resolution given the low vote. Yet Sanderson not only acceded to As You Sow’s demands, it acceded to BlackRock’s policy goals as well. When Sanderson publicly committed to produce a complete SASB-compliant report, BlackRock won its disclosure, and Sanderson dodged a governance bullet. Despite the low vote count, Sanderson somehow got the message.

Three other SASB-based resolutions are scheduled for a spring vote. These include the industrial distributor Fastenal and the auto parts retailers O’Reilly Automotive and Genuine Parts (NAPA). These resolutions deserve shareholder attention because they will provide information about the types of financially material sustainability disclosure BlackRock and other large mainstream investors will support.