BlackRock CEO says stakeholder capitalism isn’t ‘woke,’ just good business (2024)
BlackRock CEO Larry Fink pushed back against criticism of the asset management firm’s embrace of stakeholder capitalism, arguing the practice is not “woke” but a necessity for long-term success.
Fink defended his stance in his widely-read annual letter to CEOs. BlackRock has faced backlash from conservatives who say the firm’s consideration of climate change in its investment strategy is a politically motivated effort to build goodwill.
“Stakeholder capitalism is not about politics. It is not a social or ideological agenda. It is not ‘woke,’” Fink wrote in the letter.“It is capitalism,drivenby mutually beneficial relationships between you and the employees, customers, suppliers, and communities your company relies on toprosper.This is the power of capitalism.”
BlackRock is the world’s largest investment firm, managing assets worth more than $10 trillion as of this month. Under Fink’s leadership, the firm has increasingly urged major companies to embrace environmental, social and governance standards as part of their business models.
Fink’s insistence that companies work to cut carbon emissions to zero by 2050 is a source of particular concern among conservatives – especially in states with energy-driven economies.
“We focus on sustainability not because we’re environmentalists, but because we are capitalists and fiduciaries to our clients,” Fink added in his letter. “That requires understanding how companies are adjusting their businesses for the massive changes the economy is undergoing.”
Fink asserted that companies shouldn’t cave to political pressure while considering policy.
“Political activists, or the media, may politicize things your company does,” he wrote. “They may hijack your brand to advance their own agendas. In this environment, facts themselves are frequently in dispute, but businesses have an opportunity to lead.”
Earlier this week, West Virginia Treasurer Riley Moore said the state would cut ties with BlackRock’s investment fund. In a release, Moore argued BlackRock’s net-zero energy policy would be harmful to the state’s economy and hypocritical given Fink’s decision to pour “billions in new capital into China” despite human rights violations.
Last year, Texas state lawmakers passed a bill that would bar state agencies from investing public funds with companies such as BlackRock that “boycott energy companies.”
Though Fink did not directly address a specific critic, he noted that businesses should not be the “climate police” or divest from entire sectors.
“BlackRock does not pursue divestment from oil and gas companies as a policy,” Fink said. “We do have some clients who choose to divest their assets while other clients reject that approach.”
Fink’s letter also included his view on pandemic-driven changes to the global economy, with a particularly focus on the labor market. Executives “face a profoundly different paradigm” while dealing with employees as quit rates surge during the “Great Resignation,” according to the BlackRock CEO.
“Companies expected workers to come to the office five days a week. Mental health was rarely discussed in the workplace. And wages for those on low and middle incomes barely grew,” Fink wrote. “That world is gone.”
It is not a social or ideological agenda. It is not 'woke,'” Fink
Fink
Laurence Douglas Fink (born November 2, 1952) is an American billionaire businessman. He is a co-founder, chairman and CEO of BlackRock, an American multinational investment management corporation. BlackRock is the largest money-management firm in the world with more than US$10 trillion in assets under management.
wrote in the letter. “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.”
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🔍 Larry Fink champions transparency and ethical practices in finance. His open letters to CEOs emphasize the importance of corporate responsibility and honesty, setting new benchmarks for ethical leadership in the financial sector.
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