#LARRY FINK 2022 LETTER FULL#
#LARRY FINK 2022 LETTER SERIES#

#LARRY FINK 2022 LETTER FULL#

He writes, “In today’s globally interconnected world, a company must create value for and be valued by its full range of stakeholders in order to deliver long-term value for its shareholders. Fink announced BlackRock’s launch of the Center for Stakeholder Engagement, which will become a new forum for sharing experiences, engaging in debate, and supporting research. He also stated that there is still more to learn and understand about the correlation between a company’s relationship with its stakeholders and the company’s long-term value. Fink expressed in no uncertain terms the importance of stakeholder engagement and the relationship between a company and its stakeholders. While not the only key, the “woke” comment is very much a fundamental component of this year’s letter.The ISSB includes the combination of the Climate Disclosure Standards Board and the Value Reporting Foundation (the product of a merger of the SASB and Integrated Reporting Framework). We believe this shift may be paving the way for the forthcoming sustainability disclosure standards expected from the International Sustainability Standards Board (ISSB). It’s worth noting that while SASB was not mentioned in this year’s Larry Fink CEO letter, alignment with SASB or a “comparable sustainability reporting standard” is still requested in BlackRock’s 2022 Proxy Voting Guidelines.This asks companies to take an additional step beyond the TCFD’s call for a description of targets used to manage risks and opportunities and to provide an extra layer of detail in their disclosures. He called out the importance of GHG target setting, specifically noting BlackRock’s request for short-, medium-, and long-term GHG emissions reduction targets. Fink used his renowned annual communication to reiterate BlackRock’s continued desire for climate risk reporting aligned with the TCFD framework. TCFD-aligned reporting is still very much the expectation. This includes how companies are ensuring the appropriate level of board oversight in this area.Ģ.

#LARRY FINK 2022 LETTER SERIES#

Fink ended the human capital management discussion by posing a series of related questions for which CEOs may want to begin preparing answers. For its part, BlackRock will work to understand how the evolving employee/employer relationship is impacting companies and the steps companies are taking to adapt.In an environment where greater employment mobility means employees have options for finding companies more aligned with their individual purpose and values, the BlackRock CEO advises his peers to tune into “the new world of work.” He recommended considering how emerging “S” issues like mental health and workplace flexibility relate to turnover and quit rates.

Fink pointed to employee turnover as a human capital management effectiveness metric that CEOs must address.

The issue of human capital management received the most specific focus in this year’s letter and the commentary around it has the most notable sense of urgency.

The relationship between employers and employees is changing and human capital management must be proactively addressed Here’s our take on the letter and its most important messages for the companies we serve. The chairman’s comments on the limitations of fossil fuel divestment, TCFD-aligned reporting, capital accessibility, and proxy voting policies are just a few of the topics that stood out to us. While this statement is currently commandeering the headlines, there’s much more packed into the prose that’s worth noting. Fink’s claim that stakeholder capitalism is not “woke.”

The 10 th in his series, and the longest thus far, the letter is getting plenty of attention, particularly for Mr. On Monday, BlackRock’s CEO published his 2022 letter to CEOs, The Power of Capitalism.

Larry fink 2022 letter