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In 2020, the world saw "an extraordinary shift" in investor preferences, BlackRock Inc. CEO Larry Fink said during the virtual Davos summit yesterday. He said much of that shift is related to shareholder capitalism — the idea that companies have a duty that extends beyond their financial performance and shareholders to include their societies, communities and employees.
That approach gained huge traction when Fink began advocating for it in his closely-watched annual letter three years ago. The latest Fink letter, released yesterday, warns that "companies ignore stakeholders at their peril."
Fink's 2021 letter also heightened the firm's focus on climate change, calling on companies to start planning for a net-zero economy.
BlackRock is the world's largest asset manager with $8.677 trillion in AUM, and Fink's words make waves throughout the investment world. In both his letter and his Davos appearance yesterday, Fink made clear that a successful ESG strategy will not look at environmental and social issues in isolation.
"It's hard to measure what you're doing on the 'S' side of ESG versus what you're doing on the sustainability side because they intersect," he said. "Companies that are focusing on everything are the leading companies in each industry."
In this week's newsletter, we dig into Fink's letter and explain new stakeholder capitalism metrics that many big companies have committed to using. We also look at how the COVID-19 pandemic is fueling a push from investors who want pharmaceutical companies to ensure equitable access to medicine in lower-income nations that often wait longer to obtain life-saving drugs.
Chart of the week
BlackRock's Fink presses companies to start planning for a 'net-zero world'
After warning about a "fundamental reshaping of finance" a year ago, Larry Fink doubled down on climate change in his latest letter to CEOs. BlackRock is asking companies to disclose a plan for how their business model will be compatible with a net-zero economy. The firm also wants companies to disclose how that plan fits into their long-term strategy.
'Permanent state of fear': 2 years after disaster, mine tailings dams a big risk
Two years after a large dam full of mining waste in Brazil ruptured and killed at least 270 people, the industry has rolled out a new safety standard, and many companies are implementing new precautions. But many communities near this kind of structure still live in fear, and some stakeholders are pressuring the industry to take further safety measures.
COVID-19 showcases medicine access issues in low-income nations at 'warp speed'
Investors are calling on the world's largest pharmaceutical companies to ensure equitable access to medicines in lower-income nations. The COVID-19 pandemic has increased scrutiny on companies' plans to improve access to medicine.
Biden directs agencies to review Trump actions that harm the environment, health
Major gas pipe projects face tough road ahead amid regulatory, market challenges
Hydrogen's time is coming but 'won't be turnkey' or next year – S&P podcast
Pfizer, COVID-19 vaccine-makers face next rollout challenge: hesitancy
Economic role easing anti-mining views jeopardizing Australian skills pipeline
Unilever commits to living wage for all supply chain workers by 2030
Stakeholder capitalism gains traction as companies commit to new ESG metrics
US bank regulator's polarizing 'fair access' rule sheds light on deep ESG divide
New York City to divest pension funds of $4B of fossil fuel-related securities
U.S. Climate Under a Biden Administration
Responsible Company: ESG and Financial Instruments
Impact Investing World Forum 2021
Impact Investing World Forum
PRI in Person
United Nations Climate Change Conference
Questions or suggestions? Contact S&P Global Market Intelligence's ESG News team at ESGNews@spglobal.com.