Topline
BlackRock CEO Larry Fink on Tuesday defended the practice of ‘stakeholder capitalism’ which pushes businesses to embrace more socially conscious and sustainable practices, in his annual letter to corporate America, pushing back against critics of the movement who have tried to paint his actions as politically motivated and anti-business.
Larry Fink warned that companies that fail to slash their carbon footprint risk being left behind as … [+]
Key Facts
In his annual letter titled The Power of Capitalism, Fink wrote that stakeholder capitalism was not about politics and it is not “woke.”
Defending the investment management firm’s focus on sustainability, Fink said most stakeholders—including shareholders, employees, customers, communities, and regulators—now expect companies to play a role in decarbonizing the economy.
He warned that companies that fail to slash their carbon footprint risk being left behind as billions of dollars are poured into the fight against climate change.
The BlackRock chief added that the next 1,000 unicorns—companies worth more than a billion dollars—will not be search engines or social media platforms but “startups that help the world decarbonize.”
Fink also announced plans to launch a Center for Stakeholder Capitalism which he said will create a forum for research, dialogue, debate and explore relationships between companies and their stakeholders.
Crucial Quote
“Stakeholder capitalism is not about politics. It is not a social or ideological agenda. It is not ‘woke’. It is capitalism, driven by mutually beneficial relationships between you and the employees, customers, suppliers, and communities your company relies on to prosper. This is the power of capitalism,” Fink wrote.
Big Number
$509 billion. That is the value of sustainable investments that are currently a part of BlackRock’s portfolio.
Key Background
Last week, BlackRock announced that it oversees assets worth $10 trillion, making it the largest asset manager in the world and one of the most influential voices in the boardrooms of several major U.S. and European firms. The company and Fink’s vocal embrace of sustainable practices have invited criticism from several corners alleging that they are beholden to antibusiness activism and political correctness. Some oil-producing U.S. states are even pushing for legislation to cut ties with asset managers who are engaged in a push for sustainability.
Further Reading
The Power of Capitalism (BlackRock)
BlackRock’s Sustainable Investment Funds Surge to $509 Billion (Bloomberg)
Source: https://www.forbes.com/sites/siladityaray/2022/01/18/blackrocks-larry-fink-defends-stakeholder-capitalism-in-annual-letter-to-ceos/