{"id":2881,"date":"2016-06-13T07:00:28","date_gmt":"2016-06-13T06:00:28","guid":{"rendered":"https:\/\/blog.iese.edu\/doing-business\/?p=2881"},"modified":"2017-10-23T17:39:38","modified_gmt":"2017-10-23T16:39:38","slug":"larry-fink-argues-for-sustainability-and-the-long-term","status":"publish","type":"post","link":"https:\/\/blog.iese.edu\/doing-business\/2016\/06\/13\/larry-fink-argues-for-sustainability-and-the-long-term\/","title":{"rendered":"Larry Fink argues for sustainability and the long term"},"content":{"rendered":"

\"imgres\"<\/a>In an unprecedented move,\u00a0Larry Fink<\/a>, the CEO of Black Rock has sent a letter to the all the CEOs of the S&P 500 urging them to focus on the long term and make their firms more sustainable<\/strong>.<\/p>\n

The letter was published not by Black Rock but by Business Insider<\/em>, a web site acquired by Axel Springer last year, and can be found here<\/a>.<\/p>\n

\"Screen<\/a>Black Rock is a financial giant\u00a0founded by Fink and his partners in 1988. For this firm who has as its purpose to ”\u00a0offer (its clients)\u00a0insight about what to do with their money” to fully embrace long term strategy and sustainability is remarkable and gives hope for the future.<\/p>\n

The letter deplores stock buy backs and questions the higher\u00a0dividends that large companies have been giving their shareholders and sees such moves as a lack o long term strategy. It was brought to my attention by a former student and friend who is Strategy Director for a Fortune 500 company.<\/p>\n

For him, Fink’s letter is\u00a0a challenge and has emboldened him to push his own company\u00a0to adopt a much bolder and long term focus which will take the company forward in the coming decades.<\/p>\n

In the letter Fink asks that every CEO “lay out for shareholders each year a strategic framework for\u00a0<\/b>long-term value creation”<\/b><\/p>\n

It goes on to say that “Generating sustainable returns over time requires a sharper focus not only on governance, but also on\u00a0environmental and social factors facing companies today. These issues offer both risks and opportunities, but\u00a0for too long, companies have not considered them core to their business \u2013 even when the world\u2019s political\u00a0leaders are increasingly focused on them, as demonstrated by the Paris Climate Accord. Over the long-term,\u00a0environmental, social and governance (ESG) issues \u2013 ranging from climate change to diversity to\u00a0board effectiveness \u2013 have real and quantifiable financial impacts.”<\/p>\n

A New Twist<\/strong><\/p>\n

The entrance of such a stalwart institutional investor into this debate clearly moves the conversation up a notch. On the venture capital side, Kleiner Perkins’ John Doer<\/a> had an environmental epiphany\u00a0just before the financial crisis which can be seen in an emotional Ted Talk<\/a> he recorded in March of 2007.<\/p>\n

The problem is that with the exception of Elon Musk, the Silicon Valley VC crowd seemed to underestimate the time scales and regulatory issues involved in what was called Green Tech and many of the start ups\u00a0they funded failed or were taking too long for their funds to be able to benefit.<\/p>\n

Fink’s involvement from\u00a0Black Rock is different because it is not about funding new ventures but about telling traditional companies\u00a0that\u00a0if they want access to the $4.7 trillion that his firm manages, they need to think about their long term strategy and the social and environmental consequences of what they do.<\/p>\n","protected":false},"excerpt":{"rendered":"

In an unprecedented move Larry Fink, the CEO of Black Rock has sent a letter to all the CEOs of the S&P 500 urging them to focus on the long term and make their firms sustainable.<\/p>\n","protected":false},"author":788,"featured_media":2890,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[419,40367],"tags":[],"class_list":["post-2881","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-climate-change","category-strategy-sustainability","megacategoria-mc-sustainability"],"acf":[],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/blog.iese.edu\/doing-business\/wp-json\/wp\/v2\/posts\/2881","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blog.iese.edu\/doing-business\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blog.iese.edu\/doing-business\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blog.iese.edu\/doing-business\/wp-json\/wp\/v2\/users\/788"}],"replies":[{"embeddable":true,"href":"https:\/\/blog.iese.edu\/doing-business\/wp-json\/wp\/v2\/comments?post=2881"}],"version-history":[{"count":7,"href":"https:\/\/blog.iese.edu\/doing-business\/wp-json\/wp\/v2\/posts\/2881\/revisions"}],"predecessor-version":[{"id":2891,"href":"https:\/\/blog.iese.edu\/doing-business\/wp-json\/wp\/v2\/posts\/2881\/revisions\/2891"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/blog.iese.edu\/doing-business\/wp-json\/wp\/v2\/media\/2890"}],"wp:attachment":[{"href":"https:\/\/blog.iese.edu\/doing-business\/wp-json\/wp\/v2\/media?parent=2881"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blog.iese.edu\/doing-business\/wp-json\/wp\/v2\/categories?post=2881"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blog.iese.edu\/doing-business\/wp-json\/wp\/v2\/tags?post=2881"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}