Larry Fink: Sustainability MUST be Woven into Business Models

Larry Fink’s prediction:

In Fink’s statement about BlackRock joining the Climate 100+,  he predicts that capital will increasingly be allocated to companies with the most sustainable business models.

What does this mean for the future of business?

The corporate roles of finance, investor relations, and sustainability must become symbiotic. 

Stock prices react to sustainability:

Most stockholders do not read sustainability reports. However, when CEOs present long-term social responsibility plans to investors, stocks go up. 

New reporting methods that are more convenient for investors must be developed to simultaneously account for both economic performance and social impact.   

Examples of sustainability leading to profit: 

• Walmart raised entry-level employee wages leading turnover to decline and productivity to increase.  
• PayPal extended financing to small businesses that were denied credit, and opened a $10 billion market opportunity. 
• Novartis brought health education to rural villages in India and opened a new market of 70 million potential customers.

Harvard Business Review | Larry Fink Isn’t Going to Read Your Sustainability Report