BlackRock Inc. Chief Executive Larry Fink said how companies approach environmental, social and governance issues has become a defining factor for investors.
“We are seeing this reallocation of capital,” Fink said at a Bloomberg New Economy Forum event broadcast Thursday in Hong Kong.
"Those companies who are more and more focused on ESG strategies and stakeholder capitalism, they’re trying to get a higher P/E than some of the companies that are in denial,” he said.
Many companies have evolved from a primary focus on maximizing shareholder profits to one in which they also prioritize their impact on clients, employees and the communities in which they operate, Fink said in an interview with Carlyle Group Inc.’s David Rubenstein. The companies that best embrace “stakeholder capitalism” are outperforming their peers and will continue to do so, he said.
The comments mirror statements made in his annual missives to U.S. CEOs, in which he has advised corporate leaders to orient their businesses for the long term and sought to underscore that profit and social purpose are inextricably linked.
Fink made climate change the focus of his 2020 letter, saying global warming will upend global finance and promising his firm will take steps to address the issue across the thousands of companies in which it invests.
President-elect Joe Biden’s decision to return the U.S. to the Paris climate agreement will be “monumental” and would support the work of the growing number of investors that have focused on climate change, Fink said.
“It’s going to be important now to have the whole global community come together, but I would just say, over the last four years, we’ve been seeing a large transformation from private investors,” said Fink. “They’re looking for more opportunities to participate in this giant change.”
The New Economy Forum is organized by Bloomberg Media Group, a division of Bloomberg LP, the parent company of Bloomberg News.
[More: BlackRock rolls out six ESG ETFs]
Meanwhile, Raymond James and Tritonpoint Partners separately welcomed father-son teams, including a breakaway from UBS in Missouri.
Paul Atkins has asked staff to solicit public comment on novel ETFs, pausing the clock on as many as 24 filings linked to the booming event contracts market.
From 401(k)s to retail funds, Deloitte sees private equity and credit crossing into mainstream investing on two fronts at once.
Big-name defections from Morgan Stanley, UBS, and Merrill Lynch headline a busy two weeks of recruiting for the wirehouse.
Markets have always been unpredictable. What has changed is the amount of information investors are trying to process and the growing role advisors play in helping clients avoid emotional decisions
Wellington explores how multi strategy hedge funds may enhance diversification
As technical expertise becomes increasingly commoditized, advisors who can integrate strategy, relationships, and specialized expertise into a cohesive client experience will define the next era of wealth management
