Introducing Edison Electronics Inc. Edison Electronics Inc. (Edison) is an international consumer electronics retailer, headquartered in Chicago, Illinois and incorporated in Delaware. Edison sells consumer electronic products including electronic wearables, tablets, laptop and desktop computers, mobile phones, and a variety of accessories for computers and phones. Edison locations also provide installation and maintenance services, technical support for the products it sells, and subscriptions for mobile phone and internet services. Edison carries products by most major electronics manufacturers, including Nokia, Toshiba, HP, Dell, Apple, FitBit, Samsung, and others. Edison also produces and sells products under its own house brand, E-Tek Edison operates 750 retail locations in both the U.S. and Canada. The company currently has approximately 90,000 employees. Edison is a publicly traded corporation, listed on the NYSE. Its 2018 revenue was $9.7 billion, while its operating income was $392.6 million. Company founders, Holly Peck and Matt Champion, are Chief Inspirer and CEO, respectively. Edison's value proposition attempts to differentiate it from other electronics retailers, as this quote from Holly and Matt in the company's employee handbook shows: "We founded Edison 15 years ago to move beyond what most retailers call 'customer service." Edison is now a multinational consumer electronics retailer, but our focus on customer stewardship is still our guiding principle. We are passionate about helping our customers discover how technology can improve their lives. This commitment requires a unique employee profile, one that can fully embrace our unique customer stewardship philosophy." Due to the relative saturation of the U.S. retail electronics market, Edison is positioning itself for expansion internationally. Edison Today In addition to Edison's proposed acquisition of Malay Electronics (the subject of Week 6 discussion board), Edison Electronics is planning on continued growth by acquiring additional companies in its upstream supply chain. These acquisitions should give Edison increased control over production processes and, therefore, quality, as well as the potential for speeding up production. More acquisitions mean that Edison needs capital investment to purchase companies and expand its production presence. Thus, Edison has been watching the capital markets to gauge investor trends. Every year, BlackRock Investments issues a letter to its portfolio companies and a letter to its investment clients. These letters note and discuss BlackRock's perceptions of important factors and global trends affecting the investing climate and its own investment strategy and decisions. Redacted versions of these letters are attached as Appendix A. Your Charge Edison would like to attract investment from BlackRock to fund some or all of its future acquisitions. Using BlackRock's 2020 CEO and client letters, draft an advice paper to Edison's board on how best to make Edison an attractive investment opportunity for BlackRock. In addition to your advice paper. Given the issues discussed in the letters indicating BlackRock's focal points, what should Edison's corporate strategy be? What short-term and long-term goals should Edison pursue? What would BlackRock like to see Edison pursue? Use specific course materials and concepts to identify and explain key points of strategy for Edison Success Strategies for Lab #2 1. You should utilize the BlackRock materials accompanying this lab, what you have learned about Edison in the discussion boards for weeks 5 and 6, and, especially, course materials and concepts. The focus of the lab is to demonstrate how well you can apply course materials to Edison's situation. A quality response will be specific and detailed in utilizing course materials and concepts to support its analysis and recommendations. At the same time, you have a strict word limit, so do not try to use every reading or video that we have had so far. Choosing your materials wisely and explaining why a concept is relevant will be crucial to making the most of this short paper. "Use" materials means that you must identify specific content/ideas relevant to your analysis and cite them in your paper, using either the author's name or the title of the article/video. You do not have to use formal citation format. REMEMBER: if the instructor cannot easily identify the article/video or idea you are referencing, we cannot give you credit for using it. Failure to incorporate course materials will result in reduced points for the lab. 2. Be sure to include a recommended course of action for Edison. Do not skip this step, or submit only a vague, generic recommendation. Be brave and construct a recommendation that you would feel good about presenting to the company's Board of Directors. 3. This is not an opinion paper. A quality response will focus on use of course materials, not on debating the pros and cons of global supply chains or international expansion. Be careful not to allow your own views color your analysis. 4. This is not a research paper. All of the information you need to produce a quality response is contained in the lab document, the assigned materials, and the discussion board prompts for Weeks 5 and 6. It will not help your paper to spend time researching BlackRock Investments, or the electronics industry. You should assume that the facts given in the lab prompt (as well as the facts in the prompts for the Edison discussion boards) are true. A quality response will not spend time contesting those facts. Because the Edison board of directors are all busy people with many demands on their time, your advice must be succinct. You have a maximum of 750 words for your paper. BlackRock letter to CEOs BlackRock. A Fundamental Reshaping of Finance Dear CEO, As an asset manager, BlackRock invests on behalf of others, and I am writing to you as an advisor and fiduciary to these clients. The money we manage is not our own. It belongs to people in dozens of countries trying to finance long-term goals like retirement. And we have a deep responsibility to these institutions and individuals - who are shareholders in your company and thousands of others - to promote long-term value. [For example, [climate change has become a defining factor in companies' long-term prospects. Last September, when millions of people took to the streets to demand action on climate change, many of them emphasized the significant and lasting impact that it will have on economic growth and prosperity - a risk that markets to date have been slower to reflect. But awareness is rapidly changing, and I believe we are on the edge of a fundamental reshaping of finance. [This is) driving a profound reassessment of risk and asset values. And because capital markets pull future risk forward, we will see changes in capital allocation more quickly than we see changes to the climate itself. In the near future - and sooner than most anticipate - there will be a significant reallocation of capital. As a fiduciary, our responsibility is to help clients navigate this transition. Our investment conviction is that sustainability and climate-integrated portfolios can provide better risk-adjusted returns to investors. And with the impact of sustainability on investment returns increasing, we believe that sustainable investing is the strongest foundation for client portfolios going forward. In a letter to our clients today, BlackRock announced a number of initiatives to place sustainability at the center of our investment approach, including: making sustainability integral to portfolio construction and risk management; exiting investments that present a high sustainability-related risk, such as thermal coal producers; launching new investment products that screen fossil fuels; and strengthening our commitment to sustainability and transparency in our investment stewardship activities. We believe that all investors, along with regulators, insurers, and the public, need a clearer picture of how companies are managing sustainability-related questions. This data should extend beyond climate to questions around how each company serves its full set of stakeholders, such as the diversity of its workforce, the sustainability of its supply chain, or how well it protects its customers' data. Each company's prospects for growth are inextricable from its ability to operate sustainably and serve its full set of stakeholders. The importance of serving stakeholders and embracing purpose is becoming increasingly central to the way that companies understand their role in society. As I have written in past letters, a company cannot achieve long-term profits without embracing purpose and considering the needs of a broad range of stakeholders. A pharmaceutical company that hikes prices ruthlessly, a mining company that shortchanges safety, a bank that fails to respect its clients - these companies may maximize returns in the short term. But, as we have seen again and again, these actions that damage society will catch up with a company and destroy shareholder value. By contrast, a strong sense of purpose and a commitment to stakeholders helps a company connect more deeply to its custome and adjust to the changing demands of society. Ultimately, purpose is the engine of long-term profitability. Over time, companies and countries that do not respond to stakeholders and address sustainability risks will encounter growing skepticism from the markets, and in turn, a higher cost of capital. Companies and countries that champion transparency and demonstrate their responsiveness to stakeholders, by contrast, will attract investment more effectively, including higher quality, more patient capital. We believe that when a company is not effectively addressing a material issue, its directors should be held accountable. Last year BlackRock voted against or withheld votes from 4,800 directors at 2,700 different companies. Where we feel companies and boards are not producing effective sustainability disclosures or implementing frameworks for managing these issues, we will hold board members accountable. Given the groundwork we have already laid engaging on disclosure, and the growing investment risks surrounding sustainability, we will be increasingly disposed to vote against management and board directors when companies are not making sufficient progress on sustainability-related discosures and the business practices and plans underlying them. Sustainability-integrated portfolios can provide better risk-adjusted returns to investors. Sustainability will drive the way we manage risk, construct portfolios, design products, and engage with companies. In the discussions BlackRock has with clients around the world, more and more of them are looking to reallocate their capital into sustainable strategies. If ten percent of global investors do so - or even five percent-we will witness massive capital shifts. And this dynamic will accelerate as the next generation takes the helm of government and business. Young people have been at the forefront of calling on institutions - including BlackRock - to address the new challenges associated with climate change. They are asking more of companies and of governments, in both transparency and in action. And as trillions of dollars shift to millennials over the next few decades, as they become CEOs and CIOs, as they become the policymakers and heads of state, they will further reshape the world's approach to sustainability. As we approach a period of significant capital reallocation, companies have a responsibility - and an economic imperative - to give shareholders a dear picture of their preparedness. And in the future, greater transparency on questions of sustainability will be a persistently important component of every company's ability to attract capital. It will help investors assess which companies are serving their stakeholders effectively, reshaping the flow of capital accordingly. But the goal cannot be transparency for transparency's sake. Disclosure should be a means to achieving a more sustainable and inclusive capitalism. Companies must be deliberate and committed to embracing purpose and serving all stakeholders - your shareholders, customers, employees, and the communities where you operate. In doing so, your company will enjoy greater long-term prosperity, as will investors, workers, and society as a whole. Sincerely, Kenmesil Sustainability as BlackRock's New Standard for Investing Dear Client, Since BlackRock's founding in 1988, we have worked to anticipate our clients' needs to help you manage risk and achieve your investment goals. As those needs have evolved, so too has our approach, but it has always been grounded in our fiduciary commitment to you. Over the past few years, more and more of our clients have focused on the impact of sustainability on their portfolios. This shift has been driven by an increased understanding of how sustainability-related factors can affect economic growth, asset values, and financial markets as a whole. The most significant of these factors today relates to climate change, not only in terms of the physical risk associated with rising global temperatures, but also transition risk - namely, how the global transition to a low-carbon economy could affect a company's long-term profitability. As your fiduciary, BlackRock is committed to helping you navigate this transition and build more resilient portfolios, including striving for more stable and higher long-term returns. Because sustainable investment options have the potential to offer clients better outcomes, we are making sustainability integral to the way BlackRock manages risk, constructs portfolios, designs products, and engages with companies. We believe that sustainability should be our new standard for investing. Over the past several years, we have been deepening the integration of sustainability into technology, risk management, and product choice across BlackRock. We are now accelerating those efforts in the following ways. Sustainable, Resilient, and Transparent Portfolios Resilient and well-constructed portfolios are essential to achieving long-term investment goals. Our investment conviction is that sustainability-integrated portfolios can provide better risk-adjusted returns to investors. And with the impact of sustainability on investment returns increasing, we believe that sustainable investment will be a critical foundation for client portfolios going forward. Sustainability as Our Standard Offering in Solutions - BlackRock manages a wide variety of investment solutions that combine different funds to help investors achieve their investment objectives. We intend to make sustainable funds the standard building blocks in these solutions wherever possible, consistent with client preferences and any applicable regulations such as ERISA All aspects of this approach will be executed over time and in consultation with our clients, and we are committed to offering these sustainable solutions at fees comparable to traditional solutions This year we will begin to offer sustainable versions of our flagship model portfolios, including our Target Allocation range of models. These models will use environmental, social, and governance (ESG)- optimized index exposures in place of traditional market cap-weighted index exposures. Over time, we expect these sustainability-focused models to become the flagships themselves. Strengthening Sustainability Integration into the Active Investment Processes - Currently, every active investment team at BlackRock considers ESG factors in its investment process and has articulated how it integrates ESG in its investment processes. By the end of 2020, all active portfolios and advisory strategies will be fully ESG integrated - meaning that, at the portfolio level, our portfolio managers will be accountable for appropriately managing exposure to ESG risks and documenting how those considerations have affected investment decisions. This integration will mean that BlackRock as a whole considers ESG risk with the same rigor that it analyzes traditional measures such as credit and liquidity risk. Enhancing Engagement, Voting, and Transparency in Stewardship Investment stewardship is an essential component of our fiduciary responsibility. This is particularly important for our index holdings on behalf of clients, in which we are essentially permanent shareholders. We have a responsibility to engage with companies to understand if they are adequately disclosing and managing sustainability-related risks, and to hold them to account through proxy voting if they are not. We have been engaging with companies for some time on these issues, as reflected in our engagement priorities. As in other areas of our investment functions, our investment stewardship team is intensifying its focus and engagement with companies on sustainability-related risks. A fundamental reshaping of finance Our role as a fiduciary is the foundation of BlackRock's culture. The commitments we are making today reflect our conviction that all investors - and particularly the millions of our clients who are saving for long-term goals like retirement-must seriously consider sustainability in their investments. We invest on your behalf, not our own, and the investments we make will always represent your preferences, timelines, and objectives. We recognize that many clients will continue to prefer traditional strategies, particularly in market-cap weighted indexes. We will manage this money consistent with your preferences, as we always have. The choice remains with you Where we have the greatest discretion - in portfolio construction, our active and alternatives platforms, and our approach to risk management - we will employ sustainability across our investment process Where we serve index clients, we are improving access to sustainable investment options, and we are enhancing our stewardship to make sure that companies in which our clients are invested are managing these risks effectively. We will also work with a broad range of parties - including asset owners, Index providers, and regulatory and multilateral institutions - to advance sustainability in finance. For Learning Lab 2, you are a member of an internal strategy task force for Edison Electronics. Edison would like to attract investment from BlackRock to fund some or all of its future acquisitions. Using BlackRock's 2019 letter and investment stewardship engagement document, draft an advice paper to Edison's board on how best to make Edison an attractive investment opportunity for BlackRock. Given the issues discussed in Larry Fink's letter and those in the investment stewardship document indicating BlackRock's focal points, what should Edison's corporate strategy be? What short-term and long-term goals should Edison pursue? What would BlackRock like to see Edison pursue? Use specific course materials and concepts to identify and explain key points of strategy for Edison. Introducing Edison Electronics Inc. Edison Electronics Inc. (Edison) is an international consumer electronics retailer, headquartered in Chicago, Illinois and incorporated in Delaware. Edison sells consumer electronic products including electronic wearables, tablets, laptop and desktop computers, mobile phones, and a variety of accessories for computers and phones. Edison locations also provide installation and maintenance services, technical support for the products it sells, and subscriptions for mobile phone and internet services. Edison carries products by most major electronics manufacturers, including Nokia, Toshiba, HP, Dell, Apple, FitBit, Samsung, and others. Edison also produces and sells products under its own house brand, E-Tek Edison operates 750 retail locations in both the U.S. and Canada. The company currently has approximately 90,000 employees. Edison is a publicly traded corporation, listed on the NYSE. Its 2018 revenue was $9.7 billion, while its operating income was $392.6 million. Company founders, Holly Peck and Matt Champion, are Chief Inspirer and CEO, respectively. Edison's value proposition attempts to differentiate it from other electronics retailers, as this quote from Holly and Matt in the company's employee handbook shows: "We founded Edison 15 years ago to move beyond what most retailers call 'customer service." Edison is now a multinational consumer electronics retailer, but our focus on customer stewardship is still our guiding principle. We are passionate about helping our customers discover how technology can improve their lives. This commitment requires a unique employee profile, one that can fully embrace our unique customer stewardship philosophy." Due to the relative saturation of the U.S. retail electronics market, Edison is positioning itself for expansion internationally. Edison Today In addition to Edison's proposed acquisition of Malay Electronics (the subject of Week 6 discussion board), Edison Electronics is planning on continued growth by acquiring additional companies in its upstream supply chain. These acquisitions should give Edison increased control over production processes and, therefore, quality, as well as the potential for speeding up production. More acquisitions mean that Edison needs capital investment to purchase companies and expand its production presence. Thus, Edison has been watching the capital markets to gauge investor trends. Every year, BlackRock Investments issues a letter to its portfolio companies and a letter to its investment clients. These letters note and discuss BlackRock's perceptions of important factors and global trends affecting the investing climate and its own investment strategy and decisions. Redacted versions of these letters are attached as Appendix A. Your Charge Edison would like to attract investment from BlackRock to fund some or all of its future acquisitions. Using BlackRock's 2020 CEO and client letters, draft an advice paper to Edison's board on how best to make Edison an attractive investment opportunity for BlackRock. In addition to your advice paper. Given the issues discussed in the letters indicating BlackRock's focal points, what should Edison's corporate strategy be? What short-term and long-term goals should Edison pursue? What would BlackRock like to see Edison pursue? Use specific course materials and concepts to identify and explain key points of strategy for Edison Success Strategies for Lab #2 1. You should utilize the BlackRock materials accompanying this lab, what you have learned about Edison in the discussion boards for weeks 5 and 6, and, especially, course materials and concepts. The focus of the lab is to demonstrate how well you can apply course materials to Edison's situation. A quality response will be specific and detailed in utilizing course materials and concepts to support its analysis and recommendations. At the same time, you have a strict word limit, so do not try to use every reading or video that we have had so far. Choosing your materials wisely and explaining why a concept is relevant will be crucial to making the most of this short paper. "Use" materials means that you must identify specific content/ideas relevant to your analysis and cite them in your paper, using either the author's name or the title of the article/video. You do not have to use formal citation format. REMEMBER: if the instructor cannot easily identify the article/video or idea you are referencing, we cannot give you credit for using it. Failure to incorporate course materials will result in reduced points for the lab. 2. Be sure to include a recommended course of action for Edison. Do not skip this step, or submit only a vague, generic recommendation. Be brave and construct a recommendation that you would feel good about presenting to the company's Board of Directors. 3. This is not an opinion paper. A quality response will focus on use of course materials, not on debating the pros and cons of global supply chains or international expansion. Be careful not to allow your own views color your analysis. 4. This is not a research paper. All of the information you need to produce a quality response is contained in the lab document, the assigned materials, and the discussion board prompts for Weeks 5 and 6. It will not help your paper to spend time researching BlackRock Investments, or the electronics industry. You should assume that the facts given in the lab prompt (as well as the facts in the prompts for the Edison discussion boards) are true. A quality response will not spend time contesting those facts. Because the Edison board of directors are all busy people with many demands on their time, your advice must be succinct. You have a maximum of 750 words for your paper. BlackRock letter to CEOs BlackRock. A Fundamental Reshaping of Finance Dear CEO, As an asset manager, BlackRock invests on behalf of others, and I am writing to you as an advisor and fiduciary to these clients. The money we manage is not our own. It belongs to people in dozens of countries trying to finance long-term goals like retirement. And we have a deep responsibility to these institutions and individuals - who are shareholders in your company and thousands of others - to promote long-term value. [For example, [climate change has become a defining factor in companies' long-term prospects. Last September, when millions of people took to the streets to demand action on climate change, many of them emphasized the significant and lasting impact that it will have on economic growth and prosperity - a risk that markets to date have been slower to reflect. But awareness is rapidly changing, and I believe we are on the edge of a fundamental reshaping of finance. [This is) driving a profound reassessment of risk and asset values. And because capital markets pull future risk forward, we will see changes in capital allocation more quickly than we see changes to the climate itself. In the near future - and sooner than most anticipate - there will be a significant reallocation of capital. As a fiduciary, our responsibility is to help clients navigate this transition. Our investment conviction is that sustainability and climate-integrated portfolios can provide better risk-adjusted returns to investors. And with the impact of sustainability on investment returns increasing, we believe that sustainable investing is the strongest foundation for client portfolios going forward. In a letter to our clients today, BlackRock announced a number of initiatives to place sustainability at the center of our investment approach, including: making sustainability integral to portfolio construction and risk management; exiting investments that present a high sustainability-related risk, such as thermal coal producers; launching new investment products that screen fossil fuels; and strengthening our commitment to sustainability and transparency in our investment stewardship activities. We believe that all investors, along with regulators, insurers, and the public, need a clearer picture of how companies are managing sustainability-related questions. This data should extend beyond climate to questions around how each company serves its full set of stakeholders, such as the diversity of its workforce, the sustainability of its supply chain, or how well it protects its customers' data. Each company's prospects for growth are inextricable from its ability to operate sustainably and serve its full set of stakeholders. The importance of serving stakeholders and embracing purpose is becoming increasingly central to the way that companies understand their role in society. As I have written in past letters, a company cannot achieve long-term profits without embracing purpose and considering the needs of a broad range of stakeholders. A pharmaceutical company that hikes prices ruthlessly, a mining company that shortchanges safety, a bank that fails to respect its clients - these companies may maximize returns in the short term. But, as we have seen again and again, these actions that damage society will catch up with a company and destroy shareholder value. By contrast, a strong sense of purpose and a commitment to stakeholders helps a company connect more deeply to its custome and adjust to the changing demands of society. Ultimately, purpose is the engine of long-term profitability. Over time, companies and countries that do not respond to stakeholders and address sustainability risks will encounter growing skepticism from the markets, and in turn, a higher cost of capital. Companies and countries that champion transparency and demonstrate their responsiveness to stakeholders, by contrast, will attract investment more effectively, including higher quality, more patient capital. We believe that when a company is not effectively addressing a material issue, its directors should be held accountable. Last year BlackRock voted against or withheld votes from 4,800 directors at 2,700 different companies. Where we feel companies and boards are not producing effective sustainability disclosures or implementing frameworks for managing these issues, we will hold board members accountable. Given the groundwork we have already laid engaging on disclosure, and the growing investment risks surrounding sustainability, we will be increasingly disposed to vote against management and board directors when companies are not making sufficient progress on sustainability-related discosures and the business practices and plans underlying them. Sustainability-integrated portfolios can provide better risk-adjusted returns to investors. Sustainability will drive the way we manage risk, construct portfolios, design products, and engage with companies. In the discussions BlackRock has with clients around the world, more and more of them are looking to reallocate their capital into sustainable strategies. If ten percent of global investors do so - or even five percent-we will witness massive capital shifts. And this dynamic will accelerate as the next generation takes the helm of government and business. Young people have been at the forefront of calling on institutions - including BlackRock - to address the new challenges associated with climate change. They are asking more of companies and of governments, in both transparency and in action. And as trillions of dollars shift to millennials over the next few decades, as they become CEOs and CIOs, as they become the policymakers and heads of state, they will further reshape the world's approach to sustainability. As we approach a period of significant capital reallocation, companies have a responsibility - and an economic imperative - to give shareholders a dear picture of their preparedness. And in the future, greater transparency on questions of sustainability will be a persistently important component of every company's ability to attract capital. It will help investors assess which companies are serving their stakeholders effectively, reshaping the flow of capital accordingly. But the goal cannot be transparency for transparency's sake. Disclosure should be a means to achieving a more sustainable and inclusive capitalism. Companies must be deliberate and committed to embracing purpose and serving all stakeholders - your shareholders, customers, employees, and the communities where you operate. In doing so, your company will enjoy greater long-term prosperity, as will investors, workers, and society as a whole. Sincerely, Kenmesil Sustainability as BlackRock's New Standard for Investing Dear Client, Since BlackRock's founding in 1988, we have worked to anticipate our clients' needs to help you manage risk and achieve your investment goals. As those needs have evolved, so too has our approach, but it has always been grounded in our fiduciary commitment to you. Over the past few years, more and more of our clients have focused on the impact of sustainability on their portfolios. This shift has been driven by an increased understanding of how sustainability-related factors can affect economic growth, asset values, and financial markets as a whole. The most significant of these factors today relates to climate change, not only in terms of the physical risk associated with rising global temperatures, but also transition risk - namely, how the global transition to a low-carbon economy could affect a company's long-term profitability. As your fiduciary, BlackRock is committed to helping you navigate this transition and build more resilient portfolios, including striving for more stable and higher long-term returns. Because sustainable investment options have the potential to offer clients better outcomes, we are making sustainability integral to the way BlackRock manages risk, constructs portfolios, designs products, and engages with companies. We believe that sustainability should be our new standard for investing. Over the past several years, we have been deepening the integration of sustainability into technology, risk management, and product choice across BlackRock. We are now accelerating those efforts in the following ways. Sustainable, Resilient, and Transparent Portfolios Resilient and well-constructed portfolios are essential to achieving long-term investment goals. Our investment conviction is that sustainability-integrated portfolios can provide better risk-adjusted returns to investors. And with the impact of sustainability on investment returns increasing, we believe that sustainable investment will be a critical foundation for client portfolios going forward. Sustainability as Our Standard Offering in Solutions - BlackRock manages a wide variety of investment solutions that combine different funds to help investors achieve their investment objectives. We intend to make sustainable funds the standard building blocks in these solutions wherever possible, consistent with client preferences and any applicable regulations such as ERISA All aspects of this approach will be executed over time and in consultation with our clients, and we are committed to offering these sustainable solutions at fees comparable to traditional solutions This year we will begin to offer sustainable versions of our flagship model portfolios, including our Target Allocation range of models. These models will use environmental, social, and governance (ESG)- optimized index exposures in place of traditional market cap-weighted index exposures. Over time, we expect these sustainability-focused models to become the flagships themselves. Strengthening Sustainability Integration into the Active Investment Processes - Currently, every active investment team at BlackRock considers ESG factors in its investment process and has articulated how it integrates ESG in its investment processes. By the end of 2020, all active portfolios and advisory strategies will be fully ESG integrated - meaning that, at the portfolio level, our portfolio managers will be accountable for appropriately managing exposure to ESG risks and documenting how those considerations have affected investment decisions. This integration will mean that BlackRock as a whole considers ESG risk with the same rigor that it analyzes traditional measures such as credit and liquidity risk. Enhancing Engagement, Voting, and Transparency in Stewardship Investment stewardship is an essential component of our fiduciary responsibility. This is particularly important for our index holdings on behalf of clients, in which we are essentially permanent shareholders. We have a responsibility to engage with companies to understand if they are adequately disclosing and managing sustainability-related risks, and to hold them to account through proxy voting if they are not. We have been engaging with companies for some time on these issues, as reflected in our engagement priorities. As in other areas of our investment functions, our investment stewardship team is intensifying its focus and engagement with companies on sustainability-related risks. A fundamental reshaping of finance Our role as a fiduciary is the foundation of BlackRock's culture. The commitments we are making today reflect our conviction that all investors - and particularly the millions of our clients who are saving for long-term goals like retirement-must seriously consider sustainability in their investments. We invest on your behalf, not our own, and the investments we make will always represent your preferences, timelines, and objectives. We recognize that many clients will continue to prefer traditional strategies, particularly in market-cap weighted indexes. We will manage this money consistent with your preferences, as we always have. The choice remains with you Where we have the greatest discretion - in portfolio construction, our active and alternatives platforms, and our approach to risk management - we will employ sustainability across our investment process Where we serve index clients, we are improving access to sustainable investment options, and we are enhancing our stewardship to make sure that companies in which our clients are invested are managing these risks effectively. We will also work with a broad range of parties - including asset owners, Index providers, and regulatory and multilateral institutions - to advance sustainability in finance. For Learning Lab 2, you are a member of an internal strategy task force for Edison Electronics. Edison would like to attract investment from BlackRock to fund some or all of its future acquisitions. Using BlackRock's 2019 letter and investment stewardship engagement document, draft an advice paper to Edison's board on how best to make Edison an attractive investment opportunity for BlackRock. Given the issues discussed in Larry Fink's letter and those in the investment stewardship document indicating BlackRock's focal points, what should Edison's corporate strategy be? What short-term and long-term goals should Edison pursue? What would BlackRock like to see Edison pursue? Use specific course materials and concepts to identify and explain key points of strategy for Edison