Larry Fink, head of the world’s largest asset management firm, said in an interview with Fox News that the “era of awakening” — the so-called woke movement — has turned out to be a failed experiment in business. The businessman assessed that a shift toward pragmatism is now underway.
“Do I think the pendulum swung too far five years ago? Yes! I think we are more pragmatic today. I am more pragmatic as well,” said the CEO of BlackRock.
The host asked Fink whether the ideological pendulum had swung too far to the left and what that means for business. In response, the co-chair of the World Economic Forum dropped what many saw as an unexpected bombshell.
“Do I think the pendulum swung too far five years ago? Yes! I think we are more pragmatic today. I am more pragmatic as well,” reiterated the BlackRock chief.
Fink is known, among other things, for publishing an annual open letter to CEOs outlining his outlook on key trends for the year ahead. In 2018, he devoted an entire section to policies of equality, diversity, and inclusion (DEI).
“We will continue to emphasize the importance of diverse boards. Boards composed of individuals of different genders, ethnic backgrounds, professional experiences, and ways of thinking ultimately develop a broader and more informed perspective. They are less susceptible to groupthink or overlooking emerging risks to a company’s business model. They are also better equipped to identify opportunities that support long-term growth,” Fink wrote in his 2018 letter to corporate leaders.
Today, however, the former advocate of “diverse boards” has distanced himself from those views.
The End of Enthusiasm for Renewables?
Moreover, the World Economic Forum co-chair also appeared to have moved away from his earlier enthusiasm for phasing out fossil fuels. In a 2020 letter to investors, he had announced that BlackRock would cut ties with thermal coal investments and other high environmental-risk assets.
“Climate change has become a defining factor in companies’ long-term prospects. Last September, when millions of people took to the streets demanding action on climate change, many highlighted the significant and lasting impact it will have on economic growth and prosperity — a risk markets have yet to fully reflect. Awareness of this is changing rapidly, and I believe we are on the brink of a fundamental reshaping of finance…” the global finance trendsetter wrote at the time.
Today, however, the BlackRock leader strikes a different tone, emphasizing that he is ultimately managing other people’s money.
“Our duty is to ensure that if one of our investors wants to invest 100% in fossil fuels in Texas, then I invest 100% of that money in Texas. If another sovereign wealth fund wants us to invest exclusively in green energy, we will do that — after all, it’s their money,” Fink assured viewers on Fox News.
He pointed to China as a model, noting that it invests on multiple fronts: solar panels, coal, oil, and nuclear energy.
“Inclusive Capitalism” Falls Flat
Six years ago, in 2020, Fink declared that “transparency should be the means to achieve more sustainable and inclusive capitalism.”
“As I have written in past letters, a company cannot achieve long-term profits without embracing purpose and considering the needs of a broad range of stakeholders. A pharmaceutical company that ruthlessly raises prices, a mining company that cuts corners on safety, a bank that disrespects its customers — these companies may maximize profits in the short term. But, as we have seen time and again, actions that harm society will ultimately catch up with a company and destroy shareholder value. By contrast, a strong sense of purpose and a commitment to stakeholders help a company build deeper connections with customers and adapt to changing societal expectations,” the BlackRock chief argued.
That prediction, too, now appears to have been overstated.
Fink is not only regarded as a major figure in global finance but also regularly appears on Time magazine’s lists of the world’s most influential people. He has long been considered one of the most ardent advocates of so-called sustainable development. His firm statement that the woke movement was a “failed experiment” stands in stark contrast to the views he has promoted for nearly a decade.