by Sofia-Marie Mascia
If there is one man on Wall Street who can demand socially responsible investment, it is Laurence D. Fink, CEO of BlackRock – the world’s largest asset management firm. In an annual letter to his CEO’s, Fink stated,“Society is demanding that companies, both public and private, serve a social purpose.” He boldly asserted that as a fiduciary, BlackRock does have a responsibility to drive long term growth that meets the demand of their client’s growth. His belief is that, “to prosper over time, every company must not only deliver financial performance, but also show how it makes a positive contribution to society.”
This statement comes at a time where faith in governments are low, and influence of stock exchanges are high. BlackRock has set the stage for influencers of Wall Street to account for “governments failing to prepare for the future, on issues ranging from retirement and infrastructure to automation and worker retraining.” BlackRock is not alone in its participation in this seismic shift: in January alone,Wall Street has also seen Berkshire Hathaway, JP Morgan and Amazon team up to address America’s healthcare epidemic independent health care company for their employees in the United States. Neither initiative is without economic clout – Fink promises asset holders that if a company does not display a sense of purpose or commitment to social responsibility,“it will ultimately lose the license to operate from key stakeholders.” Fifty years ago Milton Friedman posed the question – “What does it mean to say that ‘business’ has responsibilities? Only people can have responsibilities.” To him I say, welcome to 2018.