Larry Fink on ESG

MeTAR day in and day out centers on this discussion, whether it is fossil fuels or human caring.



"Larry Fink plays defense

As the founder and C.E.O. of BlackRock, Larry Fink commands the attention of business leaders, thanks to the $10 trillion that his investment firm manages. After years of pushing corporate America to look beyond profits and embrace a broader social purpose — which has attracted criticism from all corners — he is using his latest annual letter to C.E.O.s to clarify, and defend, his approach.

Stakeholder capitalism “is not woke,’” Fink wrote in the 3,300-word letter. “It is capitalism.” It was a rebuke to those who say that BlackRock’s new focus on environmental, social and corporate governance concerns, known as E.S.G., is either bowing to anti-business interests or merely marketing. Reducing a company’s carbon footprint, for instance, ensures long-term viability, something investors and executives should care about, he wrote.

He again stressed that E.S.G. was crucial for BlackRock, after writing in 2020 that climate change would be a “defining factor” in its investment assessments. Failing key E.S.G. tests could lead BlackRock to sell its holdings in a company: “Access to capital is not a right,” Fink wrote."


Here are a few snippets from Larry Fink’s Annual 2022 Letter to CEOs:

Every company and every industry will be transformed by the transition to a net zero world. The question is, will you lead, or will you be led?

In a few short years, we have all watched innovators reimagine the auto industry. And today, every car manufacturer is racing toward an electric future. The auto industry, however, is merely on the leading edge – every sector will be transformed by new, sustainable technology.

Engineers and scientists are working around the clock on how to decarbonize cement, steel, and plastics; shipping, trucking, and aviation; agriculture, energy, and construction. I believe the decarbonizing of the global economy is going to create the greatest investment opportunity of our lifetime. It will also leave behind the companies that don’t adapt, regardless of what industry they are in. And just as some companies risk being left behind, so do cities and countries that don’t plan for the future. They risk losing jobs, even as other places gain them. The decarbonization of the economy will be accompanied by enormous job creation for those that engage in the necessary long-term planning.

The next 1,000 unicorns won’t be search engines or social media companies, they’ll be sustainable, scalable innovators – startups that help the world decarbonize and make the energy transition affordable for all consumers. We need to be honest about the fact that green products often come at a higher cost today. Bringing down this green premium will be essential for an orderly and just transition. With the unprecedented amount of capital looking for new ideas, incumbents need to be clear about their pathway succeeding in a net zero economy. And it’s not just startups that can and will disrupt industries. Bold incumbents can and must do it too. Indeed, many incumbents have an advantage in capital, market knowledge, and technical expertise on the global scale required for the disruption ahead.…