What are the Larry Fink Letters?

The Basics

The Basics is a series that breaks down the essential questions of purposeful business.

Who is Larry Fink?

In 1988, Larry Fink co-founded what would become the world’s largest asset manager, BlackRock, with over $9 trillion assets under its management.
He has been named one of the “World’s Greatest Leaders” by Fortune, while Barron’s has named him one of the “World’s Best CEOs” for 15 consecutive years.

What do his letters address?

Since 2012, Larry Fink has published an annual letter aimed at other business leaders and BlackRock’s portfolio companies, seeking to highlight issues critical to the health of businesses and the planet—from capital management to climate change.

In his 2018 letter, he stressed the importance of a company articulating their purpose, in order to financially prosper while benefiting all stakeholders. “Without a sense of purpose,” he wrote, “no company, either public or private, can achieve its full potential. It will ultimately lose the license to operate from key stakeholders.”

In 2020, Fink stated that environmental sustainability would be the central goal for BlackRock’s future investments. He expounded that the climate crisis will impact all aspects of the economy and become a dominant driving force within global economics.

“Without a sense of purpose, no company, either public or private, can achieve its full potential. It will ultimately lose the license to operate from key stakeholders.”

In his most recent 2021 letter, Fink’s attention was inevitably drawn to the pandemic, and the ways in which individuals and businesses have mobilised to meet society’s needs. He expressed optimism about fighting climate change, but emphasised that if we are to reach the global aspiration of net zero by 2050, companies must be transparent about how their business model is compatible with this.

“The companies that embrace this challenge – that seek to build long-term value for their stakeholders – will help deliver long-term returns to shareholders and build a brighter and more prosperous future for the world.”

What impact have his letters had?

The latest BSR/GlobeScan State of Sustainable Business survey specifically noted the role of “high-profile viewpoints of people such as BlackRock’s Larry Fink” as an influential factor driving sustainable action. Investor interest was in the top three most important drivers for a company’s sustainability efforts, rising from 25% in 2015 to 40% in 2019.

In the latest BSR/GlobeScan State of Sustainable Business survey, investor interest was in the top three most important drivers for a company’s sustainability efforts.

Given BlackRock’s immense influence on the global financial system, having their CEO speak publicly about issues relating to social purpose and climate has the potential to drastically impact global the decision making of businesses.