BlackRock chief executive Larry Fink said wanting companies to prioritize workers’ rights and their impact on society alongside profits is not “woke”.
The head of the $10 billion asset manager launched a fierce defense of companies focusing on their broader purpose in his annual letter to business leaders, calling on them to clarify their stance on social issues.
“Stakeholder capitalism is not about politics. It is not a social or ideological program. It’s not “woke,” Fink (pictured) said.
“It’s capitalism, driven by mutually beneficial relationships between you and the employees, customers, suppliers, and communities your business relies on to thrive.”
BlackRock has come under fire from conservatives for its support of ESG investing and its ties to US President Joe Biden’s administration. Right-wing think tank Consumers’ Research launched a TV ad campaign attacking the fund group for being “too wide awake” last October, criticizing its promotion of board diversity and sustainability environmental.
But Fink argued that the world has changed after the pandemic and now “a company must create value for and be valued by all of its stakeholders in order to deliver long-term value to its shareholders”.
He said the erosion of trust in traditional institutions and news sources means companies must take control of their own messaging about their values and goals.
“It has never been more essential for CEOs to have a consistent voice, a clear purpose, a consistent strategy and a long-term vision,” he said.
“Political activists or the media can politicize your company’s activities. They can hijack your brand to advance their own agendas. In this environment, the facts themselves are often disputed, but companies have the opportunity to take the initiative.
He added: “They don’t want to hear us as CEOs give our opinion on every issue of the day, but they need to know where we stand on the societal issues intrinsic to the long-term success of our businesses.”
A company’s approach to sustainability will be at the heart of this, he argued, saying the transition to net-zero emissions will affect all companies, with investors having to watch allocation decisions more closely. capital over the next few years.
It will also create considerable opportunities, Fink insisted. He predicted that the next 1,000 unicorns (private companies valued at over $1 billion) “will not be search engines or social media companies, they will be sustainable and scalable innovators” that will make the energy transition affordable.
“We focus on sustainability not because we are environmentalists, but because we are capitalists and trustees for our customers,” he said.
Fink also pointed to seismic changes in the workplace, pointing out that staff turnover in the US and UK was at record highs. He pointed out that the days of spending five days a week in the office are over, with more emphasis on mental health and workers demanding more of their bosses.
“Workers who demand more of their employers are an essential characteristic of efficient capitalism…companies that deliver reap the rewards.”