BlackRock: Linking

Purpose to Profit
Financial Management MBA - Group
Case Study
Student Names
1. Gurpreet Kaur
2. Navjot Kaur
3. Jasmine Kaur Bajwa
Introduction

 Overview of the Case:

• BlackRock, the world’s largest asset management firm, advocates for integrating ESG considerations into corporate strategy.
• CEO Larry Fink emphasizes the importance of not only delivering financial performance but also contributing positively to society.
 Significance:
• This approach challenges the traditional view of profit maximization.
• Highlights the growing importance of ESG in sustainable long-term growth.
• ESG integration is crucial for addressing modern investment risks.
Alignment with
Corporate Strategy

 Key Points:
• Integration of ESG principles into BlackRock’s
investment stewardship.
• Promotes transparency, accountability, and
sustainability.
• BlackRock's strategy ensures that ESG considerations
are central to achieving strategic goals.
 Exhibit:
• Exhibit 2: Growth in BlackRock's Assets Under
Management (AUM) from $24 billion in 1994 to $6.8
trillion in 2019.
Stakeholder Engagement
and ESG

• Comprehensive stakeholder engagement strategies.

• Active dialogues with portfolio companies to promote
sustainable practices.
• Ensures alignment with broader societal and
environmental goals.
• Stakeholder engagement helps mitigate risks and
enhances long-term investment returns
• Exhibit 4: BlackRock's annual engagement and voting
statistics.
Financial Impact and
ESG Metrics

• Positive impact of purpose-driven initiatives on

financial performance.
• Use of ESG metrics to mitigate risks and enhance
long-term returns.
• Regular monitoring of key ESG indicators like
carbon footprint reduction and board diversity.
• These metrics provide a quantitative basis for
assessing the success of ESG initiatives.
• Exhibit 3: Trend in BlackRock’s active versus passive
assets from 2014-2018.
Challenges and Opportunities
in Purpose and ESG

 Key Points:
• Challenges: Investor skepticism, complexity
of measuring ESG impacts.
• Opportunities: Attracting socially conscious
investors, long-term risk mitigation.
• BlackRock's proactive approach helps
navigate these challenges effectively.
• Continuous innovation in ESG practices
presents new growth opportunities.
 Insights:
• Proactive engagement with companies on
ESG issues helps address challenges and
leverage opportunities.
Comparison with Industry
Standards

• BlackRock leads in ESG integration and sets

high industry standards.
• Comprehensive ESG reporting and
stakeholder engagement.
• BlackRock’s leadership influences industry-
wide adoption of ESG practices.
• This leadership strengthens BlackRock's
position in the competitive asset
management industry.
• BlackRock is the largest asset management
firm globally, with significant AUM
compared to competitors.
ESG Reporting and Transparency

 Key Points:
• Strong emphasis on detailed ESG reporting and transparency.
• Regular disclosures on ESG practices and their financial impact.
• Transparent reporting builds trust among stakeholders.
• Ensuring accuracy and completeness in ESG reports is essential for credibility.
 Recommendation:
• Continue to enhance ESG reporting frameworks to maintain stakeholder trust and accountability.
Future Strategies for Purpose
and ESG

 Key Points:
• Innovate in ESG reporting and sustainable investment
strategies.
• Increase investment in green technologies.
• Advocate for regulatory changes that support ESG goals.
• Address potential challenges by standardizing ESG
metrics.
• Foster a culture of continuous improvement in ESG
practices.
 Potential Challenges:
• Standardizing ESG metrics, managing diverse stakeholder
expectations.
 Summary:

BlackRock’s case demonstrates the impact of

integrating purpose and ESG on strategy and
Conclusion performance.

Aligning business practices with societal goals

enhances financial performance and sets a
precedent for responsible investment.

The integration of ESG principles is vital for long-

term sustainability.
Final Thought

BlackRock exemplifies how financial success and The company's proactive stance on ESG issues
social responsibility can coexist, setting a new positions it as a leader in sustainable
standard in the asset management industry. investment.
Thank You

Thank you for your attention.

References

• Deshpande, R., Dey, A., & Serafeim, G. (2020). BlackRock:

Linking Purpose to Profit. Harvard Business School Publishing.
• Fink, L. (2019). Larry Fink’s 2019 Letter to CEOs.
https://www.blackrock.com/corporate/investor-relations/larr
y-fink-ceo-letter