In recent years, the media has focused a great deal of attention on the annual letter that Larry Fink, Chair and CEO of BlackRock, writes to CEOs of publicly-traded companies on behalf of its clients. In these much-awaited missives, Fink outlines what the world’s largest management firm has in mind as his organization helps to manage trillions of dollars of portfolio investments.
BlackRock is the world’s largest asset management team, with US$10 trillion in assets under management, 16,000 employees, offices around the world, and clients in 100-plus countries. In advertising in the United States, and on its corporate web site, BlackRock points out that it “helps 44 million Americans retire with dignity” (through the management of assets in employee retirement programs).
Fink’s recent annual letters to CEOs have contained important information for both corporate leaders and the investment community. Explains Fink: “I write these letters as fiduciary for our clients who entrust us to manage their assets – to highlight the themes that I believe are vital to driving durable long-term returns and to helping them reach their goals.”
In past years, Fink also wrote a separate annual letter to BlackRock’s clients discussing major issues the firm was following. For 2023, Fink writes, “it is clear to me that all of our stakeholders – BlackRock shareholders, clients, employees, partners, the communities where we operate, and the companies in which our clients are invested – are facing so many of the same issues. For that reason, I am writing a single letter to investors, and we are sharing it with all of our stakeholders.”
The focus of Fink’s 2023 letter is on the positive aspects of sustainable investing -- the letter is addressed to investorswith the theme,“Making Investing More Accessible, Affordable, and Transparent to More People is Core to Our Mission at BlackRock.”
BlackRock clearly self-identifies as an asset manager serving fiduciaries with ESG in focus and strives to be the leader of ESG investment in the capital markets. In the U.S., a growing number of Republican political leaders have been criticizing BlackRock, State Street, and Vanguard as “woke” organizations that in their asset management activities have caused such clients as public employee retirement funds to not achieve the best ROI by using the ESG lens. At the most recent annual gathering of the World Economic Forum in Davos, Fink pointed out that the opposite is true.
Included in the 2023 letter:
- The BlackRock Story, with 2023 marking the firm’s 35th anniversary.
- Total return of 7,700% since the company’s IPO in 1999, making BlackRock the highest-performing financial services stock in the S&P 500.
- Fink’s take on recent turmoil in the banking sector.
- An economy of fragmentation, with backlash against globalization and political polarization in the U.S.
- Building a hopeful future for retirees and investing for the future as an act of hope and optimism.
- Helping clients navigate and invest in the global energy transition.
- Strategy for long-term growth.
We’ve included the link to Fink’s Annual Letter to Investors for your reading and a link to the Harvard Law School Forum on Corporate Governance (the Annual Letter is posted there in different format). This year’s letter is worth reading as we contemplate the effects of Red State attacks on ESG and “woke” asset managers.