There’s something brewing among our economy’s biggest institutional investors, risk analysts, and economic forecasters.<\/p>\n
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Larry Fink is the founder, chairman, and chief executive officer of BlackRock, one of the world’s largest investment firms with over $6 trillion in assets under its management. Each year, Fink writes to the CEOs of leading companies in which its clients are shareholders. “As a fiduciary,” Fink states, “I write on their behalf to advocate governance practices that BlackRock believes will maximize long-term value creation for their investments.”<\/p>\n
In this year’s letter<\/a>, Fink urges business leaders\u00a0to focus on \u201clong-term value creation\u201d. BlackRock also said its \u201cengagement priorities\u201d for talking to CEOs would include\u00a0climate risk and boardroom diversity<\/a>.<\/p>\n Also included in the letter is this paragraph:<\/p>\n “Environmental, social, and governance (ESG) factors relevant to a company\u2019s business can provide essential insights into management effectiveness and thus a company\u2019s long-term prospects. We look to see that a company is attuned to the key factors that contribute to long-term growth: sustainability of the business model and its operations, attention to external and environmental factors that could impact the company, and recognition of the company\u2019s role as a member of the communities in which it operates. A global company needs to be local in every single one of its markets.”<\/p><\/blockquote>\n As they say, read the whole thing<\/a>.<\/p>\n BlackRock is not alone.\u00a0\u00a0Fund giant Vanguard, which led a successful shareholder resolution on climate disclosure and strategies at ExxonMobil, also\u00a0declared climate risk and gender diversity \u201cdefining themes\u201d<\/a>\u00a0of its investment strategy.<\/p>\n