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BlackRock boss Larry Fink urges business leaders to wade into politics as millennials demand change
BlackRock chief Larry Fink has warned business leaders they must intervene in sensitive political and social issues as young people increasingly demand more action from companies on diversity and the environment.
The investment mogul, who has been labelled "the conscience of Wall Stret", told chief executives in his annual letter that they must respond to the growing financial and political influence of millennials, particularly as governments struggle to tackle big issues.
“Around the world, frustration with years of stagnant wages, the effect of technology on jobs, and uncertainty about the future have fueled popular anger, nationalism, and xenophobia," he said.
“Unnerved by fundamental economic changes and the failure of government to provide lasting solutions, society is increasingly looking to companies, both public and private, to address pressing social and economic issues.
“These issues range from protecting the environment to retirement to gender and racial inequality, among others. Fuelled in part by social media, public pressures on corporations build faster and reach further than ever before.
“As CEOs, we don’t always get it right. And what is appropriate for one company may not be for another. One thing, however, is certain: the world needs your leadership.”
Mr Fink’s views, issued ahead of next week’s global gathering of corporate leaders in Davos, Switzerland, are closely followed by companies given BlackRock is the world’s largest investor with $6 trillion under management. It is among the biggest shareholders of most of the FTSE 100.
Some media outlets were duped earlier this week by a fake letter from climate change activists claiming BlackRock planned to dump its investments in fossil fuel firms.
Mr Fink’s genuine letter made no such pledge, but urged chief executives to seek long-term success by heeding the views of millennials as they climb the ranks in the workforce and inherit wealth from baby boomers.
“As wealth shifts and investing preferences change, environmental, social, and governance issues will be increasingly material to corporate valuations,” he warned.
Staff protests over ethical issues were only likely to increase, Mr Fink wrote. Google was recently hit by a wave of walkouts over its handling of sexual misconduct allegations.
Older workers' concerns over retirement must also be addressed, he argued, and called on business leaders to assume responsibility for tackling “enormous anxiety and fear” over pensions, which is “undermining productivity in the workplace and amplifying populism in the political sphere”.