At first blush we applaud the recent statement by Larry Fink, CEO of BlackRock (which manages $6 trillion in assets), holding corporations to account for the societal impacts of their operations. But we quickly caution business leaders to view his appeal as holistically as possible. We do need a reminder that the legitimate purpose of business is to make the world a better place to live and work for all. And yet, we must also be clear-eyed about what that means for the full set of responsibilities corporations bear, given the premise that ALL business should earn our social, political, and economic license — our permission — to operate.
For starters, if companies take a few positive steps to comply with BlackRock’s challenge but don’t eliminate their negative activities — polluting at others’ harm and expense, underpaying and/or mistreating workers, and perverting the truth in news and politics come to mind — we will continue to lose sight of the fact that business should serve people and communities, not the other way around.
And as we have seen, corporate ambition run amuck has led the world to the verge of catastrophic economic disparity and climate disaster.
The business community must stop contributing to, if not driving, a false narrative. Fink writes that governments are failing to prepare for the future. If this is true, a big contributing factor is selfish corporate actions like lying about climate change and lobbying for a corporate tax cut that will surely further erode governments’ capacity to plan for or respond to looming problems.
There is a deep and shocking irony in the strongmen of our economy — who are already late to wake up to or admit the accelerating risk of planetary collapse and destabilizing inequities that those very same corporations have helped to produce in many cases — suggesting that they are now well positioned to take up and profit from the next business opportunity in cleanup and mitigation. Today’s damage may then become tomorrow’s business exploitation unless we say, “No more.”
Enlightened self-interest toward real societal needs is good, but I’m looking for more credible signs of true awakening from corporate leaders, including divestment from harmful industries, reincorporation as benefit corporations, or transparent publication of all business outcomes (not just the financial ones that benefit shareholders). We surely cannot stand another year, much less another decade, of indifference.
So Fink and I agree: business leadership, especially in finance, needs to hew immediately to much higher standards. But my standards are even higher than Fink’s. Until I see real action and accountability, I’m saving my standing ovation.