Quartz at Work
Summary
“We don’t yet know which predictions about the climate will be most accurate, nor what effects we have failed to consider. But there is no denying the direction we are heading. Every government, company, and shareholder must confront climate change.”—BlackRock CEO Larry Fink
”No one company can solve this macro challenge alone, but as a global technology company we have a particular responsibility to do our part. That’s why today, we’re announcing an ambitious new plan to help address the sustainability of our planet. Today we’re making the commitment that by 2030, Microsoft will be carbon negative.”—Microsoft CEO Satya Nadella
It’s been a big January for pronouncements to address climate change—and for better sight lines into what we might come to expect from global business giants motivated to take action.
Larry Fink made a splash last week with his annual letter to CEOs of BlackRock’s portfolio companies. The key message was the need for significant action on climate; he titled the letter A Fundamental Reshaping of Finance. And if you want a taste of what the future looks like, head to the left coast—or read carefully, and then read again, Microsoft’s 30-year plan to become carbon negative.
Fink’s public stature and BlackRock’s weight as an investor in public equities rightfully call the attention of the business media. Fink stays on message, reminding his readers that the purpose of the enterprise is central to real value creation. This year he responded to critics who have been leaning on the world’s largest investor, committing to a more active stance on proxy voting on climate-related concerns, calling for better disclosure, and even promising to divest BlackRock’s mutual funds from coal.
But as virtually every business journalist has called out, Blackrock’s ability to influence the game is limited by its own business model—mainly the management of index funds, which buy and sell only to rebalance the holdings, never to exit. BlackRock may offer a new suite of options for investors that place money in the company’s mutual funds, but for a vast majority of their clients, the influence of BlackRock as their asset manager is indirect, more coach than quarterback.
Microsoft, on the other hand has just painted a picture in brilliant technicolor of what direct action on climate and carbon reduction look like. Microsoft continues to set the bar high—on purposeful leadership, on building a resilient and innovative culture, and now, on addressing what Fink just called a “structural, long-term crisis.”
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