The boss of the world’s biggest asset manager BlackRock has called on businesses to deliver purpose as well as profit and argued that a focus on stakeholder capitalism is “not woke”.
In his annual letter to global CEOs today, Larry Fink, chief executive of BlackRock, called on CEOs to find a “clear purpose” for their business that benefits wider society rather than simply investors.
He said: “Stakeholder capitalism is not about politics. It is not a social or ideological agenda. It is not ‘woke’.”
“It is capitalism, driven by mutually beneficial relationships between you and the employees, customers, suppliers, and communities your company relies on to prosper.”
Fink said that stakeholders do not want to hear CEOs “opine on every issue” but they need to know “where we stand on the societal issues intrinsic to our companies long-term sucess”.
Fink, who oversees around $10tn of assets at BlackRock, also doubled down on themes in previous annual letters to CEOs and encouraged businesses to transition from carbon intensive businesses rather than divest altogether.
He wrote: “Divesting from entire sectors – or simply passing carbon-intensive assets from public markets to private markets – will not get the world to net zero. “
Fink’s defence of stakeholder capitalism comes after a series of attacks from US politicians and consumer groups.
Washington-based group Consumers’ Research accused the firm of “woke posturing” as a smokescreen for investing in Chinese companies, while Republican Senator Marco Rbio has previously called ESG standards in investment as the latest example of “how the political left works.”