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Larry Fink: Social Responsibility Push Is Not a Fad

Category: Business,Finance

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For someone who speaks often and boldly about taking a stand, Laurence D. Fink of BlackRock spends a lot of time thinking about gray areas.

Mr. Fink, the founder, chairman and chief executive of the world’s largest asset manager, said that dropping out of an annual investor conference in Saudi Arabia last month — nicknamed “Davos in the Desert” — was a “hard decision.” So was the choice earlier this year to offer investment options stripped of gun manufacturers and retailers.

“These things are not black or white,” he said on Thursday at the DealBook conference in New York.

In a conversation that also touched on cryptocurrency and tariffs — Mr. Fink is worried that the country is headed toward “a full-fledged trade war with China — he returned repeatedly to the idea of corporate accountability. BlackRock has $6.5 trillion under management, giving it unparalleled influence over many of the world’s top public companies.

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The billionaire investor Warren Buffett has said that he has resisted imposing his political views on his employees and clients because he is “not their nanny on that.”

“I’m not a nanny either,” Mr. Fink said. “I’m not telling companies what their purpose should be. But I do believe it’s up to the company to identify what their purpose is.”

Waiting in the audience to illustrate the point: Edward Stack, the chief executive of Dick’s Sporting Goods. Mr. Stack is a gun owner and a shooting enthusiast, and he told the room that he was generally seen as a “tough guy.”

But watching news reports after 17 people died in a shooting at a high school in Parkland, Fla., in February had “a profound effect on me and the people in our company,” Mr. Stack said.

“I haven’t cried as much since my mother passed away,” he added. “It was heartbreaking.”

Soon after, Dick’s announced that it would stop selling assault-style rifles and require any gun buyer to be at least 21. Mr. Stack went to Washington to speak to legislators about gun control.

“We’d do it all over again,” he said.

Gun policy has become an enduringly divisive issue. After the Parkland shooting, gun safety activists launched boycotts against companies deemed sympathetic to the firearms industry; Delta, MetLife and several other businesses dropped deals with the National Rifle Association.

Gun rights supporters quickly responded with their own boycott campaigns. Some companies remain reluctant to make changes in strategy in reaction to shootings. Earlier this week, FedEx backed out of a marketing arrangement with the N.R.A., but stressed the decision was unrelated to a gunman’s recent rampage at a synagogue in Pittsburgh.

After the shooting in Parkland, BlackRock canvassed its clients across the country and eventually said it would help invest in funds without links to the firearms industry.

The company also asked gun manufacturers for more information about their business practices. It backed a successful shareholder proposal — pushed in part by a group of nuns — demanding that the firearm maker Sturm Ruger detail its plans to monitor violence associated with its guns.

“We were privately engaged with everyone,” Mr. Fink said.

Earlier this year, Mr. Fink issued an open letter pressing public firms to think not just of the bottom line, but also of the broader community — a social responsibility manifesto forged through years of personal experience, public pressure and secret meetings.

In August, Mr. Fink and other business leaders — including Tim Cook of Apple, Jamie Dimon of JPMorgan Chase and Brian Moynihan of Bank of America — denounced the Trump administration’s immigration policies.

Mr. Fink withdrew last month from the high-profile investment conference in Riyadh, along with executives including Mr. Dimon, Stephen A. Schwarzman of the Blackstone Group and Dara Khosrowshahi of Uber. He said it found it “inconsistent” to be part of “this public showcase” for the kingdom amid allegations that Jamal Khashoggi, a prominent Saudi journalist who was writing columns for The Washington Post, had been murdered and dismembered at a Saudi consulate in Turkey.

But Mr. Fink said that BlackRock will continue to conduct business in Saudi Arabia, adding that the company has not lost any business from the region despite his decision to drop out of the conference.

“If we did lose business because of the decision, then they’re not truly the clients we thought they would be,” he said.


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