BlackRock CEO Larry Fink: ESG Investing Is Not 'Woke', It's The 'Power Of Capitalism'

BlackRock Inc. BLK CEO Larry Fink pushed back against critics of the Environmental, Social and Governance (ESG) investing by declaring this brand of stakeholder capitalism is not taking political correctness to woke extremes.

What Happened: In his annual letter to corporate executives, which was released under the title “The Power of Capitalism,” Fink insisted the pursuit of ESG standards was not antithetical to the pursuit of profits.

“Stakeholder capitalism is not about politics,” he wrote. “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. This is the power of capitalism.”

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What Else Happened: Fink praised companies focused on green energy and cleantech, noting how the automobile industry was on the “leading edge” through its pursuit of an “electric future.” He added that other industries were also moving forward with a goal of increased sustainability.

“Engineers and scientists are working around the clock on how to decarbonize cement, steel, and plastics; shipping, trucking, and aviation; agriculture, energy, and construction,” he continued. “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.”

While Fink commended BlackRock’s engagement with companies involved in the green energy sector, he cautioned that the company was not going to cut all ties with traditional energy providers.

“Divesting from entire sectors – or simply passing carbon-intensive assets from public markets to private markets – will not get the world to net zero,” he wrote. “And BlackRock does not pursue divestment from oil and gas companies as a policy.”

Photo: Larry Fink, courtesy of the World Economic Forum / Flickr Creative Commons