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Does ESG privilege climate action over social and governance issues? A content analysis of BlackRock CEO Larry Fink’s annual letters

  • Nela Mrchkovska,

    Roles Data curation, Formal analysis, Methodology, Project administration, Supervision, Validation, Visualization, Writing – original draft, Writing – review & editing

    Affiliation Institute of Public Management and Governance, Department of Management, Vienna University of Economics and Business, Vienna, Austria

  • Nives Dolšak,

    Roles Conceptualization, Data curation, Investigation, Methodology, Resources, Supervision, Validation, Writing – original draft, Writing – review & editing

    Affiliation School of Marine and Environmental Affairs, University of Washington, Seattle, United States of America

  • Aseem Prakash

    Roles Conceptualization, Data curation, Methodology, Resources, Supervision, Validation, Writing – original draft, Writing – review & editing

    Affiliation Department of Political Science & Center for Environmental Politics, University of Washington, Seattle, United States of America


Milton Friedman famously argued that the social responsibility of business is to maximize shareholder wealth. Friedman’s view is challenged by the proponents of corporate social responsibility who suggest that firms should consider the interests of all stakeholders, and not just shareholders. Following the stakeholder approach, BlackRock’s CEO Larry Fink has made the case that firms should use the ESG (environmental, social, and governance) metric to evaluate their performance as opposed to short-term profit maximization. Fink employs his annual “Dear CEO” letters as a platform to outline his views on ESG. While these letters focus on all three ESG dimensions, the media tends to portray Fink as a climate advocate. We examined the texts of the ten letters Fink has published since 2012 to assess the extent to which Fink focused on climate issues. We found that Fink emphasized the climate dimension over social and governance dimensions only in two letters (2020 and 2022), which suggests that the thrust of Fink’s letters differs from how the media frames them. Broadly, our paper suggests that norm advocates sometimes cannot fully control how their advocated norm is interpreted and framed. Limiting ESG to climate issues has implications for its business acceptability. Specifically, this framing links business incentives to adopt ESG to the policy salience of climate issues as well as the fortunes of both the fossil fuel industry and the renewable energy sector. Second, if businesses face a legitimacy crisis from governance shortfalls or inadequate social performance, ESG will serve as a less effective tool in alleviating stakeholder concerns.

Author summary

How should the modern corporation integrate social, environmental, and governance concerns in its business operations, and how should it respond to the expectations of all stakeholders without privileging its shareholders? In recent years, Environment, Social, and Governance (ESG) has emerged as an important business norm to guide firms on how to incorporate social, environmental, and governance goals while pursuing their economic objectives. Larry Fink, the CEO of the world’s largest asset management company, BlackRock, is a vocal ESG advocate. Fink’s annual letters, which are widely read, frequently focus on ESG issues. However, as ESG has become embroiled in partisan debates, Larry Fink has been portrayed as a climate advocate. In this exploratory paper, we analyze the text of Larry Fink’s ten annual letters to establish the importance he attached to climate, social, and governance issues. We find that Fink’s letters emphasized the climate dimension over social and governance dimensions in only two letters. This suggests that the thrust of Fink’s letters differs from how the media frames them. The narrow reinterpretation of ESG as a climate norm potentially limits ESG’s emphasis on other social challenges such as gender and racial equity, and corporate governance.


Norms, a highly researched and discussed concept in social sciences [13] are principles or standards of appropriate action or behavior that may or may not be backed by explicit sanctions [4]. In most policy spaces, multiple norms and approaches seek to define the policy problem and the instruments to address it [5,6]. Scholars debate about which norms get more traction and why [7,8]. One reason might be the power and authority of the norm advocates. And yet, the norm these leaders advocate might get interpreted in a way that is different from what they intended. This sort of norm re-interpretation can have important policy implications because it redirects policy debates in a new direction, sometimes different from the purported direction of the original norm.

In this paper, we focus on the ESG (environmental, social, and governance) norm championed by BlackRock’s CEO Larry Fink. The ESG metric is expected to motivate firms to take a more expansive view of their activities beyond short-term profit maximization [911]. Its environmental dimension covers corporate climate policies, compliance with regulations, energy use and pollution, and waste management. The social dimension focuses on the company’s relationships with internal and external stakeholders, the well-being of these stakeholders as well as responsibility and stewardship of the company toward the surrounding community. The governance dimension addresses the company’s internal control, transparency, and accountability measures, and composition and governance of the board of directors and other executive leaders.

However, in ESG’s media coverage, the dominant focus tends to be on corporate climate action. This leads to the neglect of social and governance issues that are critical for firms’ external legitimacy and long-term profitability. Moreover, if ESG gets perceived as a climate norm, then its acceptability among firms could be tied to the policy salience of climate issues, as well as the fortunes of both the fossil fuel industry and the renewable energy sector. But when exogenous shocks such as the Ukraine invasion precipitate a global energy crisis, thereby enhancing concerns about energy security and motivating new investments in fossil fuels [12,13], a climate-focused ESG might become less attractive to investors.

In this exploratory paper, we examine the case of Larry Fink, who has emerged as an important advocate for business action on climate change, social issues, and corporate governance [14]. Fink enjoys power and authority in the business community because his company BlackRock is the world’s largest investment company managing over $10 trillion in assets [15]. Given its financial clout, Larry Fink exerts extensive influence on global business debates, and this is probably why the public’s interest in Larry Fink and his letter has increased over the years. But alongside its financial clout, BlackRock is an important policy player as well. In 2020, the European Commission selected it (from a pool of multiple firms that sought this role) as an advisor for environmental rules for banks it was developing [16]. BlackRock is also a member of the Glasgow Financial Alliance for Net Zero, including its Net Zero Asset Managers initiative, which supports the goal of net zero greenhouse gas emissions by 2050 [17]. Fig 1 presents the Google search trends (in terms of the number of hits) of “Larry Fink,” “BlackRock,” and “ESG”.

Fig 1. Google search trends about Fink, BlackRock, and ESG.

Norm advocates [18,19] disseminate their ideas via different platforms [2022]. For Fink, an important platform is his annual “Dear CEO” letters which he has published since 2012. These letters outline BlackRock’s investment philosophy. From his first letter in 2012 to the recent one in 2022, Fink has emphasized the “importance of taking a long-term approach to creating value”. As Fig 2 shows, after the word “company”, the term “long-term” is the second most frequent word in the whole corpus of Fink’s letters. It is followed by the word “capital”, which is used almost half as frequently as the word “long-term”.

Fink argues that ESG policies have a real and quantifiable impact on firms’ long-term financial performance. However, ESG has become embroiled in partisan debates and is criticized on several grounds: philosophical, evaluative, and instrument design. In the United States, more than 20 state attorney generals have launched investigations into whether ESG leads firms to violate their fiduciary obligations to maximize shareholder value. Critics note that the absence of a standardized metric [23] makes ESG a poor tool to compare across firms (and over time within a firm). A recent survey “found that 28% of more than 430 general counsel and in-house litigation leaders said their so-called ESG dispute exposure increased in 2022, and 24% expect it to deepen over the next 12 months. The key reasons are the absence of clear environmental, social, and governance metrics and requirements, and the heightened regulatory scrutiny on the importance of ESG” [24].

From the perspective of firms, it is not clear how they should emphasize ESG’s different dimensions, a critical issue because businesses have limited resources. Should businesses invest in new climate technologies (the environmental dimension), or should they provide higher wages to their employees (the social dimension)? Sometimes, specific dimensions could be in conflict. Should a business invest in a lithium mine to help the electrification of the automobile industry (the environmental dimension) although this mine is opposed by local communities (the social dimension)? The ongoing strike by United Auto Workers reveals contradictions between different ESG dimensions [25]. While auto workers are demanding higher pay and fair distribution of corporate profits (social and governance dimension), they are also worried that the push for electric vehicles will threaten jobs because such vehicles require fewer workers per car in relation to traditional automobiles. UAW President Shawn Fain noted, “I have cautioned everybody in Washington DC that they better understand one thing–our workers’ experience right now with this EV transition is not a good thing” [26].

Given the absence of a universally accepted ESG metric or clear guidelines from regulators (although the U.S. Securities and Exchange Commission is in the process of developing them), companies probably have some discretion about implementing ESG. Given BlackRock’s enormous financial clout, some business leaders might carefully study Fink’s letters for guidance on this subject. Alternatively, businesses could interpret ESG and Fink’s message in terms of how the media frames it–which may or may not cohere with Fink’s actual message.

What issues did Fink’s letters emphasize? We examined the salience of E, S, and G issues in Fink’s letters and analyzed how this salience has changed over the years. If Fink championed the climate agenda, we expected the environmental or climate dimension to dominate his letters. What if Finks did not focus on climate issues? In that case, the media framing of the ESG debate is not following Fink’s template. Rather, the media has selectively focused on one ESG dimension, namely climate change. However, social and governance concerns are also critical for long-term business health and societal well-being, as the recent wave of strikes in Hollywood, healthcare, and automobile industries suggests. Thus, ESG’s portrayal as a climate metric could hurt social and governance goals that firms ought to pursue as well.

Further, we also explored whether the emphasis on E, S, and G dimensions in Fink’s letters varied across years. While recognizing the exploratory nature of this study which examines ten annual letters only, we considered whether specific theoretically relevant factors might correlate with Fink’s emphasis on different ESG dimensions. Since BlackRock is a financial investor, arguably, Fink’s letters should reflect, in part, the stock market performance of specific sectors that lead or lag on E, S, and G issues. We examined the performance of 11 sectors in the S&P 500 index for the 2011–22 period. The intuition is that Fink might downplay climate issues when the energy sector (comprising major fossil fuel companies) performs above the S&P 500 average. This is because as an asset manager, BlackRock has the fiduciary duty to pursue the highest returns for its clients (which include institutional and retail or household investors). If BlackRock does not do so, it becomes vulnerable to criticism (and even lawsuits) that it is prioritizing ideology over financial returns, a charge that several states such as Florida and Texas have levied against BlackRock. Of course, in addition to stock market performance, scholars note that the fossil fuel and the financial sector have structural linkages through lending and cross-board membership [27]. Broadly, in spite of pressure from the divestment movement, several pension funds continue to maintain sizeable holdings in the fossil fuel sector [28]. A 2023 report, “Banking on Climate Chaos” (, notes that “fossil fuel financing from the world’s 60 largest banks has reached USD $5.5 trillion in the seven years since the adoption of the Paris Agreement, with $669 billion in fossil fuel financing in 2022 alone.”

Second, because Fink is a socially embedded actor and seeks social legitimacy for his business [29], his letters should be expected to reflect the salient policy concerns [3031]. We examined if Fink’s letters emphasized environmental issues more in response to the 2015 Paris Agreement, which can be considered as a critical focusing event for climate policy. We also explored Google trends of two social movements (#Black Lives Matter, #MeToo), during the year prior to Fink’s letters which are regularly published in January. Because these issues speak directly to social issues, we explored if they might correlate with Fink’s emphasis on ESG’s social dimension. Since we could not find any major corporate governance scandal that dominated the news cycle or Google trend during the period of our study, we did not include a similar analysis for the governance dimension.

Methods and analysis

We downloaded Fink’s ten annual letters from BlackRock’s official website [32], published annually in January between 2012 and 2022 (no letter was published in 2013). We employed two methods to analyze this corpus of letters. First, we investigated the salience of environmental (E), social (S), and governance (G) by employing a novel text analysis tool using large language models (LLMs). The LLMs are neural networks that have been trained on large quantities of unsupervised text. Recently, Open AI developed an LLM called the Generative Pre-trained Transformer (GPT), which underlies the chatbot ChatGPT. Scholars increasingly note the superiority of LLMs over dictionary-based approaches and other machine-learning methods for automated text analysis as they are trained on large bodies of text, lending power to their precision. LLMs are increasingly studied for their potential in efficiently classifying and analyzing text and have been applied to various settings. For example, Rathje et al. [33] test two large language models, GPT-3.5 and GPT-4 across 15 datasets in 12 languages and apply multiple prompts measuring psychological constructs (sentiment, discrete emotions, offensiveness). They find that GPT is superior to many existing methods of automated text analysis, with high accuracy across languages and prompts. Similarly, Gilardi, Alizadeh, and Kubli (2023) show that ChatGPT, the artificial intelligence chatbot that uses large language models like GPT-3.5 and GPT-4 as its underlying models, outperforms crowd workers and trained annotators like research assistants. Further, using LLMs allows researchers to omit pre-processing the text and reduces the research bias.

Utilizing this novel tool, we followed Rathje et al. [33] and Törnberg [34] as guides in analyzing text with LLM by utilizing OpenAI API with the GPT-4 turbo model. We used this tool to classify Fink’s letters in terms of whether the letter discusses any of the E, S, or G elements and their salience (measured as the percentage of the letter dedicated to the dimension relative to the entire individual letter). Specifically, using OpenAI API, we first engineered a prompt, which refers to the “formulation of instructions to LLMs for specific tasks or objectives: the instruction that tells the LLM how to analyze the text” [34] and apply it to the ten annual letters. The prompt was as follows:

“This is a letter from a CEO of a large company. In it, the CEO discusses ESG (environmental, social, and governance) issues which are defined as follows: environmental dimension covers corporate climate policies, compliance with regulations, energy use and pollution, and waste management. The social dimension focuses on the company’s relationships with internal and external stakeholders, the well-being of these stakeholders as well as responsibility and stewardship of the company toward the surrounding community. The governance dimension addresses the company’s internal control, transparency and accountability measures, and composition and governance of the board of directors and other executive leaders. Your first task is to evaluate what percentage of the letter is dedicated to ESG topics by counting the sentences dedicated to the environmental, social, and governance dimensions over total sentences in the letter. Then, your second task is to say if any one of the three topics is not present at all.”

To assess whether the LLMs correctly specified the salience of E, S, and G themes, we also engaged human coders to assess the letters based on the same criteria. Four coders read the letters and labeled each sentence in terms of the E, S, G, or other (non-ESG related) dimensions. The coders were given a codebook that explained in detail what constitutes E, S, and G specifically, and they were instructed to label a sentence as E, S, G if it clearly addressed only one of the dimensions but label it as “other” or “unclear” if there were multiple dimensions in a sentence or if other unrelated topics were present. While the coders had some prior knowledge of ESG and were given the definition of E, S, and G, they were not given any other context or theoretical expectation as put forward in this paper. Therefore, we minimized retrieval bias in the coding of the text and ensured the independence of research bias [35].

The four coders received five or six randomly selected letters. Each letter was read by two coders. We assessed inter-coder reliability in two ways [36]. First, we are interested in what is the most frequent dimension per letter in terms of the number of sentences that were labeled as E, S, or G. We found that in 70% of the cases, both coders agreed on the most frequent dimension per letter, and in 30% they disagreed. The Cohen’s Kappa based on this measure is 0.53, which indicates moderate agreement. We also calculated pairwise correlation by considering the relative frequency (the number of sentences per dimension divided by the total of sentences per letter) per dimension and coder. We found that the average level of agreement is 0.46, indicating a moderately high correlation between the raters.

We recognize the challenges in placing sentences in specific categories. For example, in addressing racial justice issues, Fink spoke of how “the pandemic collided with a wave of historic protests for racial justice in the United States and around the world” and how “society is increasingly looking to companies…to address pressing social and economic issues… from protecting the environment to retirement to gender and racial inequality”. While Fink himself discussed the ambiguity of placing specific issues in the E, S, and G categories, in coding the data, we followed the definitions of E, S, and G, and labeled content as social when the discourse relates to broader social issues and the community as opposed to companies’ leadership (the diversity in the composition of board directors and executives, for example). If a sentence intertwined two dimensions, we labeled it as “other” and we did not count it toward any one dimension.


Fig 3 depicts the findings from the LLM method. The graph presents the relative frequency of E, S, and G sentences (E-, S-, and G-related sentences relative to the sum of total sentences per letter to account for different lengths of letters). Larry Fink dedicated most words in his letters to the governance dimension in the period, 2012–2018. While he dedicated less than 10% of his letters during this period to discussing the environmental dimension, and less than 30% to the social dimension, he discussed governance issues (as defined above) in over 60% of his letters in years 2012, 2014, and 2016. After 2016, his emphasis on governance became more comparable to the other two dimensions. The salience of the environmental dimension peaked in 2020 and reached its highest point in 2022, relative to years prior and relative to the other two dimensions that year. The social dimension, on the other hand, was the most prevalent topic relative to the other two in 2019 and 2021.

Fig 3. The salience of E, S, G sentences in Fink’s letters (LLMs method).

The second method relying on human coders is based on the relative frequency of sentences labeled as E, S, or G (same as above, the number of related sentences divided by the total number of sentences per letter to account for the different lengths of the letters). The hand-coded data largely aligned with the LLM-processed data. The LLM results above classified the environmental dimensions as scantly discussed in Larry Fink’s CEO letters in the first seven years. Similarly, the coders did not code any sentences as environmental in 2012, 2016, and 2019. Both the manually coded and the LLM-coded data report that Fink’s emphasis on environmental issues picked up after 2020. However, the coders noted less discussion on the environment in 2022 relative to the LLM-coded data. Nonetheless, they are similarly in agreement about the relative frequency in relation to the other dimensions and the rest of the annual letters. That is, letters in 2020, 2021, and 2022 emphasized the environmental dimension more than the social and governance dimensions. In terms of the salience of social and governance dimensions, the two approaches have minor disagreements between the exact proportions. However, the percentages are broadly comparable and follow the same fluctuation through the ten years. Fig 4 shows the mean frequency per dimension per letter/year of sentences related to the individual dimensions respectively in percentages.

Fig 4. The salience of E, S, G sentences in Fink’s letters (Human-coded).

Compared to environmental and social dimensions, the governance theme, across both datasets, was the most discussed dimension in 2014, 2016, and 2018. The social theme was the highest in 2017 and 2019 according to the human coders, and 2017 and 2021 according to the LLM-labeled data. Finally, the environmental theme was the most important topic, relative to the other two, in 2020 and 2021 (2022 per the LLM-labeled data). In sum, while Fink’s letters are now framed as calling for business activism on climate issues, we find that the salience of the environmental dimensions has only increased in importance since 2020.

Exploring the changing salience of E, S, and G

What might explain the variations in the emphasis Fink places on E, S, or G themes in his annual letters? While the small sample size of our exploratory study precluded us from undertaking a causal analysis, we explored whether three factors (stock market performance of the energy sector, the Black Lives Matter movement, and the MeToo movement) correlated with Fink’s attention to certain dimensions over others.

Historically, businesses have opposed environmental regulations [3740]. Major trade bodies such as the US Chamber of Commerce have also opposed climate regulation. Yet, in recent years, some businesses as well as trade associations [4143] have advocated for climate action [4445]. Since 2016, the World Economic Forum has prominently featured climate issues in its annual Davos meetings. Many firms have announced net-zero goals that oblige them to eliminate greenhouse emissions (or offset them) from their operations (Scope 1) and energy needs (Scope 2). Some firms have also announced that they will seek their supply chains and consumers to eliminate (or offset) greenhouse gas emissions (Scope 3). Many financial institutions have pledged to reduce the funding for fossil fuel projects. This issue becomes complex for Exchange Traded Funds (ETFs) such as the ones BlackRock has launched) because they tend to passively track stock market indexes (such as S&P 500, Dow, or Nasdaq) which include a large number of companies that may be involved in the fossil fuel industry [46].

From an ESG perspective, ETFs pose a challenge because fund managers do not have control over specific firms included in the index their ETF is passively tracking. Thus, it is not possible for BlackRock’s S&P 500 ETF to divest from the fossil fuel sector or claim that all firms in the index have met the net zero emission standard. Moreover, BlackRock cannot stop issuing such ETFs altogether because they are popular with individual or household investors. This is where the issue of the stock market performance of the energy sector becomes important. Fossil fuel companies are included in many stock market indexes (and therefore in BlackRock’s ETFs) given their size and market capitalization. Thus, it is very costly for BlackRock to simply not launch (or discontinue) EFTs that track indexes that include major energy firms.

In addition to launching ETFs, BlackRock is a major shareholder in many firms, including fossil fuel firms such as ExxonMobil. BlackRock could divest from them to demonstrate its commitment to net zero goals. However, if such firms are outperforming the market, this would be a costly (legally difficult) strategy for BlackRock (which is publicly traded) to proclaim its climate credentials. Indeed, Fink’s critics have pointed out that BlackRock is not walking Fink’s climate talk because it has not fully divested from fossil fuels.

How might the stock market performance of the energy sector influence the salience Fink places on the environmental dimension in his letters? The S&P 500 tracks 11 sectors ( Might the above-average performance of the energy sector, in relation to S&P 500 (, disincentivize Fink from talking about climate issues and consequently lower the salience of the environmental dimension in his letters?

As Fig 5 shows, the performance of the energy sector has been uneven since 2011. It performed above the overall S&P in three of the 10 years: 2011, 2016, and 2021. If the salience of the climate dimension in Fink’s letters reflected the energy sectors’ stock market performance in the previous year, we should expect that Fink’s 2012, 2017, and 2022 letters would have lower salience of environmental issues in the letters relative to previous frequency (and to the other two dimensions). Fink barely talked about climate issues until 2016, and then again in 2017 (the year after the energy sector performed well) there is no mention of the environmental dimension. However, in 2021, when the energy sector performed exceptionally well (the highest performance relative to the nine years prior), Fink placed the highest importance on the environmental dimension (close to 60% of the letter is dedicated to environmental issues and it ranked as the most important dimension that year). Thus, we find little evidence that changes in the salience of the environmental dimension in Fink’s letters correlate with the energy sector’s stock market performance. Interestingly, the 2015 Paris accord, a major climate event, did not seem to have increased the relative emphasis Fink placed on environmental issues in his 2016 letter, although he mentioned the Paris Climate Agreement in his letter that year.

Fig 5. Relative stock market performance of the energy sector and Fink’s emphasis on the environmental dimension.

What might be influencing the emphasis Fink placed on the social dimension in his letters? In this context, we examine the role of two major social movements: #Black Lives Matter and #MeToo. Black Lives Matter emerged in 2013 in response to the acquittal of George Zimmerman for the death of Trayvon Martin [47]. It gathered strength over the years as other police atrocities received extensive media coverage, including the 2014 death of Michael Brown in Ferguson and Eric Garner in New York City. The 2016 U.S. Presidential elections placed racial injustices on the front page once again, as the Google search trends show. The murder of George Floyd by Minneapolis Police in 2020 significantly increased the salience of racial injustice in the media [48].

Fig 3 revealed that the social dimension dominated Fink’s letter for the first time in 2017 in the aftermath of the U.S. Presidential elections and remained salient through 2019 when it was the most important topic of the three dimensions. The social dimension picked up once again in 2021 after the murder of George Floyd and the subsequent nationwide mobilization against police brutality. Fig 6 shows the correlation between the salience of an important social movement (as reflected in Google Trends) and Fink’s emphasis on the social dimension in his annual letter.

Fig 6. Black Lives Matter Google tends and the salience of the social dimension.

*Red line corresponds to the right y-axis, while the grey one to the left y-axis.

We note similar trends in the context of the #MeToo movement which gained media attention in response to the sexual abuse scandal involving Harvey Weinstein in 2018 [49]. Fink emphasized social issues in his 2019 letter more than environmental or governance issues. Indeed, in his 2019 letter, Fink mentioned “gender inequality” as one of his talking points for the first time. Thus, observations in both Figs 6 and 7 suggest that as major social movements related to social injustices gained media attention, Fink increased the social dimension of ESG in his letters.

Fig 7. Me too Google trends and the salience of the social dimension.

*Purple line corresponds to the right y-axis, while the grey one to the left y-axis.


What goals should guide the modern business corporation [50], and to what extent should firms focus on maximizing short-term profits that benefit shareholders, over serving stakeholder needs? Milton Friedman [51] famously argued that the sole purpose of firms is to maximize profits. But this view has faced a considerable challenge, both on empirical grounds (what firms actually do) and ethical grounds (what firms should do). The corporate social responsibility movement (CSR) made the case that businesses should take into account the broader social impact of their operations on a variety of stakeholders [52,53]. Scholars debate whether CSR supports the profit goal because it allows firms to get legitimacy from important stakeholders whose cooperation is required for the efficient functioning of the corporation. Over the years, the broader CSR idea has had many incarnations including the triple bottom line [54], and socially responsible investment [55].

Sometimes CSR efforts have manifested into concrete programs at the firm level (Amazon’s Climate Pledge), industry level (Responsible Care), or the global level (the Global Compact). Yet, the debate on the appropriate metric to assess firms’ CSR performance remains unresolved. This is where ESG probably comes in. Philosophically, perhaps in the spirit of ecological modernization [56], ESG could be viewed as a way to reform capitalism and move towards stakeholder capitalism, a phrase Fink repeatedly uses. For Fink, ESG motivates firms to pursue long-term profitability by aligning their operations to environmental, social, and internal governance goals. However, liberal critics argue that this is not possible because the profit maximization goal is causing a multitude of problems including the ecological crisis [57]. Moreover, the lack of widely accepted ESG metrics means that firms can greenwash their climate performance.

This is why Fink’s letters could be important in interpreting the ESG debate. Given BlackRock’s financial clout, one might expect that business leaders will read Fink’s letters carefully for guidance. Because Fink’s interest is in promoting corporate action on three dimensions (environmental, social, and governance dimensions), ESG would be interpreted as a broader call for rethinking how corporations should work. Yet, the media tends to portray Fink as a climate advocate and this probably motivates climate critics to target ESG. Theoretically, our paper poses important questions about norm advocacy: to what extent can norm advocates control how their norms are interpreted? One might even argue that both climate advocates and critics have weaponized the ESG norm–the former to promote corporate climate action and the latter to impede it. This means that the narrow reinterpretation of ESG as a climate norm potentially deemphasizes corporate commitment to other social challenges about gender and racial equity, and corporate governance.

This short paper should be viewed as an exploratory analysis only. As the corpus of letters increases, future research should examine the changing salience of environmental, social, and governance dimensions and what factors might drive it. Further, while we have examined two social movements that have increased the salience of the social dimension, we have not come across a major corporate governance issue (such as the Enron scandal) that might have motivated Fink’ to emphasize the governance dimension in his letter. Future work should explore corporate governance failures in more detail and correlate them with Fink’s emphasis on the governance dimension.

Finally, while we have examined Fink’s emphasis on E, S, and G dimensions, there is an opportunity to compare how different networks have incorporated ESG in their discourse. For example, has the social justice network emphasized ESG’s social dimension while the climate network emphasized its environmental dimension? This comparison will allow scholars to assess ESG’s conceptual flexibility (or the strategic ambiguity about the salience of different dimensions) which allows it to be employed by networks focused on different issues. However, this flexibility could be a weakness because ESG means different things to different actors, and thus does not offer clear guidance for corporate action. Thus, there could be a tradeoff between the adoption of the norm, and its effectiveness in shaping the actions and behaviors of the actors that have adopted it. This echoes the lesson from the voluntary regulation literature which suggests that low-cost programs requiring small changes in corporate policies tend to attract a larger roster of firms, but such programs also are less effective in shaping corporate performance [58]. The conceptual flexibility lowers the costs of ESG adoption, but it might also make it less effective in shaping actor policies or behaviors in E, S, or G dimensions.


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