This is about what’s good for business, what’s good for investors, and what’s good for shareholders.”Īlyssa Stankiewicz, ESG analyst at Morningstar, said, “My hope is this emphasis on thinking holistically about a company’s long-term purpose and value, on long-term strategic planning, leads investors and companies to shift their time horizon away from the short-termism of recent decades. “How a company treats stakeholders will have a lot to do with how it performs over the longer term. While opening up votes to individual investors is “aspirational” at this point, “I do think he’s encouraging investors to care about issues because of their relevance and materiality” to corporate profits, said Joe Keefe, president of Impax Asset Management, a prominent investor in sustainability, in reaction to Fink’s letter. He didn’t specify when that would be.įink’s letter is a widely watched annual event that kicks off the proxy season. “We are committed to a future where every investor-even individual investors-can have the option to participate in the proxy voting process if they choose,” Fink wrote. In the past, BlackRock and other passive fund managers, such as State Street and Vanguard, which have dominated the market, have been widely criticized for regularly voting with management on shareholder proposals and only weakly supporting resolutions addressing environmental and social concerns. Beginning this year, large investors in its index portfolios can choose to cast their own votes on a range of shareholder proposals. These are proposals affecting a company’s behavior that are made by shareholders and voted on at the company’s annual meeting. Separately, Fink also highlighted that BlackRock may allow individual investors the ability to vote on shareholder proposals. Even as he advocated a faster transition to renewable energy, he waded into a controversial subject on Wall Street, saying that divestment-a blanket policy of not investing in certain kinds of companies- is not a sound investment strategy, a view contrary to that of many veteran investors focused on sustainability. That includes traditional energy companies, he wrote. Make no mistake, the fair pursuit of profit is still what animates markets and long-term profitability is the measure by which markets will ultimately determine your company’s success.”īlackRock needs to see companies “evolve and grow so that they generate attractive returns for decades to come,” Fink wrote. “It is through effective stakeholder capitalism that capital is efficiently allocated, companies achieve durable profitability, and value is created and sustained over the long-term. It is not a social or ideological agenda. “Stakeholder capitalism is not about politics. Fink views stakeholder capitalism as critical to a company's long-term future. This is a tenet of sustainable investing in which employees, suppliers, customers, communities, and the environment are given equal consideration to shareholders.

With BlackRock now managing roughly $10 trillion on behalf of investors around the world, Fink's advocacy of sustainable investing has had broad ripples.įink's emphasis, however, is narrower than that of other advocates of sustainable investing it's on so-called stakeholder capitalism. In recent years, the annual letter to CEOs from influential BlackRock chief executive Larry Fink has become closely watched for Fink's views on sustainable investing.

Larry fink blackrock