“Society is demanding that companies, both public and private, serve a social purpose.”
Larry Fink, CEO, Blackrock
“Not all of the attention has been favourable, which makes this moment all the more significant.Mr. Fink’s words mark a profound shift in the way business relates to society – a shift long in the making,”, Chris Houston, Where is the money going?
Is it really the case that this is seen as a “new demand” from society?
Perhaps I’m naive (or just cynical) but I don’t remember any point where everyone was happy with the way business worked (apart from the ultra-rich). What is the “profound shift” he’s speaking of – that someone in power listened and has commented that ‘society’ matters?
Do you think there is a material difference between this now and, for example, when Al Gore and David Blood published their Sustainable Capitalism manifesto (7 years ago), or when the UK passed the Climate Act (10 years ago), or countless other statements from ‘important people’ over decades?
What, specifically, is the leverage point here?
– the perception of power through the ability to steer capital?
– the absence of political leadership?
– fears that human capital is now overexposed and a risk to profit?
– fears around globalisation and (many) risks leading to migration and war (and thus risk to profits)?
I’ve written about ‘purpose washing‘ before, and it feels to me that underlying this is a fundamental concern about risk to profit rather than just an ‘awakening’ to social purpose. It reminds me a little of Obama reframing ‘green energy’ as ‘energy security’ (which was genius, as well as being correct and a good idea for the US economy).
How can we best capture this energy and positive intent?
Is it something that we can bring people around, or will cynicism override and we’ll undermine goodwill with divisiveness?
Do ‘leaders’ really need to be given so much permission by someone in order to lead? If so, how do we help do more of that?
What are the realistic signals and evidence that the humans in industry could produce that would be believable or trusted by the people Larry is talking about?