Larry Fink Calls on Businesses to Lead, Not Just Live, With Purpose

BlackRock has used its heft to promote policy change in the past year, including voting for a shareholder resolution that required the gun maker Sturm, Ruger Company to be more transparent about the safety of its products.

In some respects, Mr. Fink is limited in what he can do. Much of BlackRock’s holdings are through 401(k) plans in index funds, and the company isn’t able to sell specific companies whose policies it might disagree with. But it recently introduced a series of socially responsible investment funds that exclude entire industries, such as tobacco, firearms or coal.

The letter is also a defense against those who criticized him over last year’s letter.

“I didn’t know Larry Fink had been made God,” the real estate billionaire Sam Zell said the day after Mr. Fink’s letter was sent last year. And Warren Buffett, the chairman of Berkshire Hathaway, said he did not believe it was the role of investors to push their views in the way Mr. Fink suggested.

“I don’t believe in imposing my political opinions on the activities of our businesses,” Mr. Buffett said last year.

In Mr. Fink’s latest letter, he wrote that he had “no intention” of telling companies what their purpose should be. “Rather, we seek to understand how a company’s purpose informs its strategy and culture to underpin sustainable financial performance,” he wrote.

He also pushed against the notion, long espoused by the economist Milton Friedman, that a company’s only social responsibility is its profits.

“Profits are in no way inconsistent with purpose,” Mr. Fink wrote. He added, “Purpose is not the sole pursuit of profits but the animating force for achieving them.”

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