Larry Fink is the Chief Executive Officer of BlackRock, the world’s largest asset manager, with some $10 trillion under its management. The son of a shoe store owner, Fink is somewhat bookish looking and, for a leader of his enormous accomplishment and great power, mild in manner and unprepossessing in demeanor.
For at least five years Fink has been a leader not only in financial services but of a corporate movement. In 2018 he put his considerable heft behind ESG – the idea that in addition to corporate leaders having purely corporate responsibilities, they have larger ones as well. To the Environment. To Society. And to good Governance. Fink has been particularly associated with climate change, specifically with the push to cut carbon emissions.
For several years Fink was widely admired – not in all circles, but in many – for staking out his position, especially on the environment, with such clarity and temerity. Moreover, there was no doubt that on ESG more generally Fink was at the forefront of a movement that had a significant impact. As the New York Times summarized it late last year, “Investing with consideration for climate change, diversity, gender and pay equity, the welfare of employees, and the impact of technology on society – broadly lumped under the ESG banner – has become a big focus in recent years, with BlackRock leading the charge.”
However, as leaders are wont to do, they get punished not so much for being out front as for being too far out front. Which is precisely what happened to Larry Fink. As America’s political discourse has continued to coarsen, Fink has become a whipping boy for naysayers. Those on the left fault him for not doing enough. Those on the right accuse him of badly neglecting his fiscal responsibilities in the interest of his other goals, specifically those that are social and environmental. In response to the charges from the right, Fink has backtracked, somewhat. He has denied that BlackRock is ideologically driven, affirming that it does not intend to divest from fossil fuel investments and that it isn’t pressuring any of its clients to do so.
The complexities of what Fink is trying to accomplish have become clear. What exactly constitutes ESG investing invariably is up for debate, sometimes nasty debate. There can however be little doubt that Fink is well intentioned. That he is, or maybe he was, simply saying that business leaders have responsibilities that extend well beyond the businesses they lead.
Still, the attacks on him get ever uglier, reflecting the bitter cultural and political divide that afflicts America more generally. At the World Economic Forum in Davos in January, Fink went out of his way to say that BlackRock was trying to address the misconceptions of ESG investing. But he went on to add that for the first time in his professional career the attacks on him were “personal.” His opponents, he said, were “trying to demonize the issue” by creating a narrative that was “ugly.”
My best guess is that Larry Fink’s leadership trajectory will ultimately be in three seperate and distinct phases. First, his astonishing level of professional success. Second, his arguably noble but still highly controversial effort to translate his professional wins into ones that are political, social, and even cultural. Third and last his legacy in history which, I believe, will judge him not only as well-intended, but as far-sighted.