Balancing Profit with Values: What Does Fink Think?
Larry Fink is the CEO of BlackRock, the largest asset management firm in the world with over $5 trillion under its control.
In his letter, he stated that for companies to prosper over time, they must “not only deliver financial performance, but also show how it makes a positive contribution to society.”
His request for companies to take more initiative in owning and creating social impact was met with a variety of reactions. From praises about making the world a better place to doubts about the letter’s efficacy, Fink’s words incited thought-provoking conversation on financial inclusion and social impact.
He brings up some important points. And you don’t have to be in charge of $5 trillion to consider what they can mean for you.
Here are two ideas you can take from Fink's playbook:
Play #1: Leverage the fact that you control money, and you have choices in that control.
Just like Larry Fink is demanding social accountability and transparency from the companies BlackRock invests in, the American public can demand social accountability and transparency from the businesses they give their money to.
Fink wrote that “society increasingly is turning to the private sector and asking that companies respond to broader societal challenges.”
Community leaders in the private sectors, like banks, stores, and restaurants, can take a lead in preparing for a sustainable future, both economically and environmentally. (And they already do.)
Play #2: Ask the tough questions.
Setting ideals about business delivering financial and social performance may sound abstract.
The next step is getting specific about issues impacting communities and harnessing data to advance stakeholder understanding and measurement of those issues. Fink posed several question for companies to ask themselves:
What role do we play in the community?
How are we managing our impact on the environment?
Are we working to create a diverse workforce?
Companies can choose to take the initiative to integrate inquiry and measurement into these ideas and define values for their enterprise, or not.
Customers can choose to take the initiative to inquiry and data-driven decision making into their everyday business choices, or not.
Larry’s letter has gotten a lot of attention.
But the growing conversation about businesses delivering financial and social value doesn’t have to be dominated by billionaire CEOs.
Anybody can ask the tough questions. And anybody can put their money elsewhere if the answers are unsatisfying.
Mighty helps you find, compare and track banks in the US by their social, environmental, and neighborhood focus. Build your banking portfolio with checking, savings, and other bank accounts to grow the unique community impact that matters to you. Reserve your invite to get mighty.