BlackRock CEO Larry Fink defends stakeholder capitalism from ‘waking up’

Larry Fink, chief executive officer of Blackrock Inc., during the Global Investment Summit (GIS) 2021 at the Science Museum in London, UK, on ​​Tuesday, October 19, 2021.

Hollie Adams | Bloomberg | beautiful pictures

Larry Fink, CEO of the world’s largest wealth management company Black stones, has championed a shareholder movement that promotes companies to focus on the good of society as well as profit.

In his annual open letter, Fink built on topics he had previously addressed in January to other CEOs, urging them to find purpose and consider issues like variables climate change as part of so-called stakeholder capitalism.

“Stakeholder capitalism is not about politics,” Fink said in the letter late Monday, titled The Power of Capitalism. “It is not ‘awakened.’ That’s capitalism.”

Fink, 69, defended BlackRock’s position in partnering with companies on a carbon transition rather than divesting outright, saying the companies themselves cannot be “climate police” but instead should work with governments.

“Divesting entire sectors – or simply moving carbon-intensive assets from the public to private markets – will not bring the world to net zero,” he said. “And BlackRock doesn’t pursue divestment from oil and gas companies as a policy.”

Oversaw $10 trillion on December 31, the world’s largest wealth manager has become one of the most influential voices in US and European boardrooms, prompting the annual letter Fink’s becomes a must-read director.

In Monday’s letter, Fink revealed plans to establish a Capitalist Center for Stakeholders to create a “forum for research, dialogue and debate.” The center will help uncover the relationships between companies and their stakeholders, he said.

Fink also said BlackRock is working to expand the initiative to investors using the technology for proxy voting.

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After years of criticism from climate activists and other environmental, social and governance (ESG) issues, BlackRock changed course in 2021 and dropped a series of key proxy votes much more like backing calls like reporting emissions or disclosing a diverse data workforce.

At the same time the fund manager has faced challenges from conservative US politicians. On Monday, West Virginia State Treasurer Riley Moore said his agency would no longer use the BlackRock liquidity fund, where it held $21.8 million for the last time since January 6.

In a press release, Moore cited BlackRock’s dealings in China and noted that “BlackRock has urged companies to adopt ‘zero-net’ investment strategies that could harm industries. coal, oil and natural gas industries.”

A BlackRock spokesman declined to comment. In December, the company admitted it would need to continue investing in fossil fuels.


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