The CEO believes that investors must not ignore the impacts of climate change insofar as its consequences can have a disastrous effect on global economic cycles.
Daily wire reports, Larry Fink, CEO of BlackRock, told investors on Wednesday the company views climate change as a risk to investors.
The asset management firm BlackRock maintains a 20% stake in every Fortune 500 company, along with rivals State Street and Vanguard. He argued that firms must seriously consider the impact of climate change in his annual letter to investors and take a “long-term view of returns.”
Fink stated “For years now, we have viewed climate risk as an investment risk. That’s still the case, Anyone can see the impact of climate change in the natural disasters in California or Florida, in Pakistan, across Europe and Australia, and in many other places around the world. There’s more flooding, more wildfires, and more intense storms. In fact, it’s hard to find a part of our ecology, or our economy, that’s not affected. Finance is not immune to these changes.”
As a proponent of environmental, social, and corporate governance, also known as ESG, BlackRock has been accused of mingling political and social causes, such as reducing carbon emissions and achieving racial diversity, while sacrificing profitability or distracting from them. As an example, Fink cited the company’s recent extension of proxy voting rights to large investors, as evidence that BlackRock respects client choices regarding climate investments.
According to BlackRock’s most recent earnings report, assets under management declined from $10.0 trillion in the fourth quarter of 2021 to $8.6 trillion in the fourth quarter of 2022. Therefore, several hundred workers were dismissed and most new hires were paused.
Fink was not one to shy away from speaking about the risks the market faces with inflation running amok.
Reuters reports, according to BlackRock Inc Chief Executive Laurence Fink, the U.S. regional banking sector remains at risk following Silicon Valley Bank’s collapse and inflation will persist.
In an annual letter, Fink described the current financial situation as “the price of easy money” after the Federal Reserve had to raise rates nearly 500 basis points to fight inflation.
In his article, Fink wrote that the financial industry was experiencing “liquidity mismatches” in the wake of the regional banking crisis. This is because low interest rates have pushed some asset owners to take on higher-yielding investments that are more difficult to sell.
According to Fink, quick regulatory action helped prevent a wider crisis. According to him, a more divided world will disrupt supply chains and cause inflation to persist and stay closer to 3.5% or 4%.
With Black Rocks hands in nearly every pot, it’s hard not to see where the money will be going from mega corporations. It seems that nearly every corporation and world government is pouring money into untested solutions that take up billions of dollars, and have little to no yield in actually solving the crisis. Yet we cannot ignore the fact that inflation is apparently here to stay, and that Larry Fink is worried about other regional banks collapsing, that should scare everyone down to their core, if they are saying the quiet part out loud.
