BlackRock CEO Larry Fink defended capitalism in his annual letter to corporate leaders, with the head of the world’s largest asset management firm arguing that profitable companies drive innovation beyond politics.
Fink, who has come under criticism for investing with Chinese companies and the fossil fuel industry, said he believes “stakeholder capitalism is not about politics.”
“It is not a social or ideological agenda. It is not ‘woke.’ It is capitalism, driven by mutually beneficial relationships between you and the employees, customers, suppliers, and communities your company relies on to prosper,” he wrote. “This is the power of capitalism.”
BlackRock became the first foreign company to open a wholly owned business in China’s mutual fund industry, CNBC reported last September, despite concerns that the move poses a national security issue for a main adversary of the U.S.
But Fink wrote in his annual letter that “in today’s globally interconnected world,” capitalism is what moves society forward.
“Make no mistake, the fair pursuit of profit is still what animates markets; and long-term profitability is the measure by which markets will ultimately determine your company’s success,” he said.
BlackRock has also been scrutinized for its lingering investments in the fossil fuel industry. A report published last year from the nonprofit Reclaim Finance showed that as of October 2020, BlackRock still had $85 billion invested in the coal industry.
In his letter, Fink said sustainable energy represents the future, but “divesting from entire sectors — or simply passing carbon-intensive assets from public markets to private markets — will not get the world to net zero” and said the public and private sectors would have to work together to chip away at the problem.
“When we harness the power of both the public and private sectors, we can achieve truly incredible things. This is what we must do to get to net zero,” he wrote.