...Should BlackRock really follow through with policing and punishing companies that perform poorly on social indicators, and if other investors fall in line, we could be witnessing a watershed moment in defining the role of the private sector in addressing social and environmental change. Smaller socially responsible investment shops, progressive pension plans, and faith-based investors have long called for better corporate behavior toward vulnerable populations. But BlackRock, a mainstream investor through and through that, aside from supporting a shareholder proposal to require Exxon Mobil to enhance climate disclosures, has shied away from activism, has an opportunity to seriously move the needle here – if they follow through.

... The letter cites a number of social issues – widespread popular discontent, inadequate retirement systems, low wage growth, automation – as symptoms of an economy that... has been serving the owners of capital at everyone else’s expense... Companies, BlackRock demands, should act as stewards of all their stakeholders – including employees, customers, and communities. In doing so, BlackRock brings new credence to concerns that Oxfam has raised in the past... [W]e are encouraged by the language in this letter, which in large part aligns with our own analysis of the factors that underlie inequality and how financial markets incentivize these outcomes.