Larry Fink’s annual letter to investors reflects an ongoing shift in Larry Fink’s and BlackRock’s communications from an ESG focus to a more traditional stewardship approach that explicitly acknowledges BlackRock’s investment of others’ money on their behalf. While the letter focuses largely on the importance of the capital markets, and the US market in particular, to financial freedom and prosperity and the ability to comfortably afford retirement and increasing life expectancies, energy is among the factors addressed in the context of the changing nature of critical and desirable infrastructure, which requires long-term investment. In a welcome change for corporates from past communications, the letter introduces “energy pragmatism,” which considers both an energy transition to manage the impacts of climate change, as well as energy security, with the underlying message being that society will need both renewable energy sources and oil and gas for the foreseeable future.
The letter also discusses BlackRock’s Voting Choice initiative, which we most recently reported on here and here.