BlackRock Chair & CEO Larry Fink's always eagerly anticipated annual letter to CEOs focuses largely on climate change as relates to investment risks and opportunities, and the anticipated significant, transformative impacts on the allocation of capital. In view of the investment risks and investors' associated need for information such that they can assess the risks, the letter asks companies to disclose a plan for how their business model will be compatible with a net zero economy and to disclose how that plan is incorporated into the company's long-term strategy and reviewed by the company's board of directors. The letter further urges private companies and other organizations with climate-related risk to hop on the measurement and disclosure bandwagon to effect societal change. While BlackRock continues to support disclosure in accordance with the TCFD and SASB, as previously reported, it supports moving to a single global sustainability standard.
The balance of the letter reiterates BlackRock's focus on companies' articulating and demonstrating corporate purpose to the benefit of various stakeholders in furtherance of long-term shareholder value creation. As respects human capital, and racial and ethnic diversity in particular, the letter asks that companies' sustainability disclosures on their "talent strategy" reflect their long-term plans (by region, as applicable) to advance DE&I.
BlackRock's concurrent letter to its clients outlines several initiatives BlackRock is undertaking in furtherance of its net zero commitment in the areas of measurement and transparency, investment management, and stewardship. The investment stewardship component dovetails with Larry Fink's climate-related requests to companies included in his letter to CEOs and signals increasing support for shareholder sustainability proposals that address material business risks (e.g., climate) to effect progress or change.
See these articles: "Larry Fink Letter Highlights Net Zero Transformation Opportunity, Centrality of Data and Disclosure" (ESG Today) and "BlackRock’s Fink urges others to join in net-zero commitment" (Pensions & Investments), and additional resources on our Institutional Investors page » BlackRock and Sustainability/ESG page.