One of the world’s most powerful investors, BlackRock, has once again urged CEOs to be quick and courageous in embracing green economy or to break away from a wave of faster, smarter competitors. It issued a stern warning to companies that they must decarbonise or die.
Chairman Larry Fink has written a letter to CEOs warning them against dismissing environmental protection not just as a wake up issue, but as an important idea of effective capitalism. He told business leaders that access to capital is a privilege rather than a right and the duty to attract that capital in a responsible and sustainable manner lies with them.
“Stakeholder capitalism is not about politics. It is not a social or ideological agenda. It is not ‘woke,’” wrote Fink. “It is capitalism, [his emphasis] driven by mutually beneficial relationships between you and the employees, customers, suppliers, and communities your company relies on to prosper.”
Citing the speed at which the world’s major automakers have transitioned to electric vehicles over the past two years, Larry Fink said that any company not ready for rapid decarbonisation will be pushed aside by disruptive competitors.
“The next 1,000 unicorns won’t be search engines or social media companies, they’ll be sustainable, scalable innovators – startups that help the world decarbonise and make the energy transition affordable for all consumers,” he wrote, using the jargon for new businesses that grow rapidly to reach a valuation of $1 billion.
As governments struggle to meet the commitments needed to avoid dangerous levels of climate change, the private sector is moving fast to advance the greening of the global economy.
With $10 trillion in third-party funds under management, BlackRock is the largest wealth manager in the world. Every year, Mr Fink writes a letter to CEOs, who might be looking for investors, outlining BlackRock’s outlook on the business.