![]() Michelle Edkins, Global Head of Investment Stewardship, and her team will continue to engage with companies toward greater long-term thinking. In the past few years, we have evolved our approach to ESG. Purpose In Action, or Purposeful Inaction?īlackRock has always been motivated by social purpose. We will move beyond merely defining our social purpose-we will demonstrate that purpose in action. If we are honest about the central role asset managers play in driving the global economy, we must also be honest about the direction we are steering it in.Īs we enter a year of increasing uncertainty, BlackRock will make two strategic pivots to better align our investment decisions with our social purpose, and engage companies we invest in to adopt similar methodologies. Our investments affect decisions made in C-suites around the world and shape corporate behavior at the highest level. As fiduciaries, we are entrusted with grave responsibilities. This power is a privilege we wield by engaging with management to drive the sustainability our clients need. Our market position brings significant influence to bear. I spent much of 2018 reflecting on BlackRock’s own social purpose and how it protects long-term value for our clients. ![]() Companies must address climate risk factors or fail in their fiduciary duty.īlackRock has engaged companies we invest in toward longer-term growth and discouraged short-term thinking that leads to volatility and downturns. But we find that the biggest contributor to uncertainty is also the greatest threat to the long-term stability of our economy and our investors’ assets: climate change. Our analysis locates various causes, including political irregularities in the US, trade war frictions, fragmentation in Europe, the rise of populist political parties, 2019 elections planned in India, Canada, Australia, South Africa, and the EU, and the 2020 US election. Stock prices have climbed back since their December plunge, and BlackRock foresees economic growth in 2019. The US economy expanded in 2018, fueled by tax cuts and spending increases. The importance of serving a social purpose was never more clear than in 2018, as geopolitical instability, fear, and changing investor preference contributed to high volatility. ![]() ![]() Last year, I wrote that companies must declare a social purpose that benefits all of their stakeholders-not only shareholders, but employees, customers, and society at large. BlackRock reaffirms our commitment to protecting and enhancing the value of our clients’ assets by encouraging management practices that drive long-term performance and take into account environmental, social, and governance (ESG) factors. It has been a great privilege and responsibility to manage the $6.4 trillion in active and passive investments that clients have entrusted to us. This year, while celebrating our 30th anniversary amid a turbulent market, I took time to reflect on new areas of opportunity and consider how BlackRock and companies it invests in should adapt. At the start of each year, I have made it a tradition to write to you, the leaders of companies in which our clients are shareholders, to advocate governance practices that we believe will maximize long-term value creation. ![]()
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