Larry Fink is at it again in his 2019 letter to CEOs. His message is clear: there is more to corporations than profits.
BlackRock is not alone. Big investors are now demanding more from issuers because they finally agree that purpose and planet positively impact the bottom line.
We need one more group to get the message: the analysts. For one hour per week, you can run an easy experiment for the next month or two. Listen to an analyst call each week and count how many times they ask a question about “doing the right thing.” I can give you the answer right now: zero. If a company is announcing the opening of a factory in a developing nation, analysts want to know if there will be enough skilled workers and whether the infrastructure is sufficient. The fact that corruption is rampant in that country seems to be irrelevant.
Companies take analysts’ questions seriously. When analysts finally become concerned with how things are done (i.e. with the culture), we’ll see a new wave of progress.