Nonetheless, Fink’s message is clear: “Ultimately, purpose is the engine of long-term profitability. “It’s not clear what will make capital available at acceptable cost,” Tugendhat says, “and what will motivate corporations to invest when the returns accrue as much to other stakeholders as to themselves.” He echoed the Business Roundtable’s 2019 statement, underscoring that “a company cannot achieve long-term profits without embracing purpose and considering the needs of a broad range of stakeholders,” with a more sustainable and inclusive capitalism as the end goal.Īccording to Palladium Director Eduardo Tugendhat, while Fink’s letter addresses the transition to new realities for corporations, inclusive growth and enduring social impact must also bring up those already left behind. It also pushes the world’s largest asset manager squarely into the realm of impact investing, raising the stakes for other financial institutions.īeyond BlackRock’s own strategy and initiatives, Fink also highlighted the role that governments and companies play, calling on all stakeholders to confront climate change. In a world in which social impact and profit have long been misunderstood as mutually exclusive, this perspective marks a welcome change. “And with the impact of sustainability on investment returns increasing, we believe that sustainable investing is the strongest foundation for client portfolios going forward.” “Our investment conviction is that sustainability- and climate-integrated portfolios can provide better risk-adjusted returns to investors,” Fink said in the letter. BlackRock manages roughly 6 trillion in assets on a global basis. While some liken them to what climate activist Greta Thunberg called “creative PR” at this year’s UN climate summit in Madrid, CEOs and investors hold them in high regard. Larry Fink is the CEO and chairperson of New York-based BlackRock, an investment management firm. At BlackRock we use data and analytics to help our clients understand how the energy transition is evolving and give them choices about how they would like to invest in emerging opportunities. With $6.9 trillion in assets under management, Fink’s letters often set the tone for the industry, shaping the conversation for the year to come. My letters to CEOs are written with a single goal: to ensure companies are going to generate durable, long-term investment returns for our clients. This is in contrast to his 2019 annual letter, which made no mention of climate change. “I believe we are on the edge of a fundamental reshaping of finance,” wrote Fink, anticipating “a significant reallocation of capital” as the risks from climate change force businesses and investors to shift their strategies. ![]() ![]() In his highly anticipated annual letter, BlackRock CEO Larry Fink announced this week that the asset management giant will be placing sustainability at the centre of its investment approach – including by exiting “high risk” investments such as coal and screening for fossil fuels.
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