BlackRock CEO Laurence Fink recently sent a warning letter to CEOs across the globe: BlackRock, which manages $6.3 trillion in assets, expects companies it invests in to have a positive impact on society. “Society is demanding that companies, both public and private, serve a social purpose,” Fink wrote in his letter. “To prosper over time, every company must not only deliver financial performance, but also show how it makes a positive contribution to society.”
Fink’s letter comes amid a greater pressure for businesses to weigh in, and often take a stance, on hot button issues. For example, the popular social media campaign GrabYourWallet has organized boycotts of companies that do business with the Trump Organization. While boycotting is not a new phenomenon, the increased prevalence of consumer activism combined with the ability to rapidly share information through social media is forcing companies to adapt.
Several recent incidents have demonstrated the leverage consumer activism can exert on companies. In the past year alone, Bill O’Reilly was dismissed from Fox News because of advertiser boycotts, #DeleteUber eventually led to the ouster of CEO Travis Kalanick, and Papa John’s CEO, John Schnatter, resigned after being targeted by #GrabYourWallet. If Fink’s letter to CEOs is any indication, this trend may only grow in 2018.
What do you think? Should money managers hold companies accountable for their social impact?
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