LETTER: Fink fails to reflect climate urgency

As Business Day reported in January, the leader of the world’s largest asset manager has pressed for companies to be more accountable for their impacts (“BlackRock’s Fink defends push to focus on more than profits”, January 18).

Larry Fink’s annual letter to CEOs includes admirable language on the topic, such as “a company must create value for and be valued by its full range of stakeholders to deliver long-term value”.

Yet how does he propose this is achieved? Here is where things start to get complicated. On business contributions to net-zero he states “it will not happen overnight” but “pass through shades of brown to shades of green”. This  fails to reflect the pressing urgency of the climate crisis. 

The priority for many investors is still enterprise value creation, not sustainability. Yet reporting guidance that is focused only on the financial consequences of climate impacts is short-sighted. Companies must also be accountable for the impacts they have on the environment and the socioeconomic cohesion of society.

We support Fink’s drive towards a stakeholder-centric economic model. But without considering the information needs of all stakeholders companies are faced with a credibility issue. Endorsing broad sustainability reporting, as supported by the Global Reporting Initiative Standards, would reflect BlackRock’s stated backing for stakeholder capitalism and be appreciated by the thousands of companies that already use our standards.

Preserving value and managing impacts is not and should not be mutually exclusive. Sustainability reporting that informs the full spectrum of stakeholders is not only desirable, it’s good for business. In Fink's words, “this won’t happen overnight”, but the starting point for companies is not a murky shade. It’s about committing now to comprehensive corporate reporting of both financial and sustainability impacts, and that’s as clear as black and white.

Eelco van der Enden
Global Reporting Initiative, Amsterdam

JOIN THE DISCUSSION: Send us an email with your comments to letters@businesslive.co.za. Letters of more than 300 words will be edited for length. Anonymous correspondence will not be published. Writers should include a daytime telephone number.