World’s biggest investor hits big business with ultimatum in potential ‘watershed moment’ for Wall Street

0
148
DOWNLOAD THE APP



‘Society is demanding that companies, both public and private, serve a social purpose. To prosper over time, every company must not only deliver financial performance, but also show how it makes a positive contribution to society.’


That’s from a letter Larry Fink, founder and CEO of BlackRock, penned to business leaders, according to a draft obtained by the New York Times, which said the note could mark “a watershed moment on Wall Street.”

Fink, who runs the world’s biggest asset manager, says these companies need to do more than just churn out profits if they want to receive the support of BlackRock and its $6 trillion in investments.

Jeffrey Sonnenfeld, senior associate dean at the Yale School of Management, told the Times he’s never seen anything like the letter. He also said Fink’s words “will be a lightning rod for sure for major institutions investing other people’s money” and “it is huge for an institutional investor to take this position across its portfolio.”

The call for social responsibility has grown louder in recent years, but Fink’s move to hold companies accountable is unique in the power his firm wields.

This isn’t the first time Fink has spoken about being an agent for change. “Passive managers have to become more active — not to the point that they’re becoming activists, but they need to be more active in the dialogue they’re having with the management,” he said at a Morningstar conference last year.

Fink’s message, of course, has already been met with criticism.

“Either they’re a passive fund that follows the market or they’re a leader that’s setting the tone, billionaire investor Sam Zell told CNBC, adding that BlackRock can’t have it both ways. “I didn’t know Larry Fink had been made God.”

READ  What to buy recent retirees to transform their quality of life



Source link

GET ACCESS TO FREE TRAINING NOW

LEAVE A REPLY

Please enter your comment!
Please enter your name here