By Alan Murray and Claire Zillman
January 17, 2018

Good morning.

The letter BlackRock’s Larry Fink sent CEOs yesterday highlights themes familiar to CEO Daily readers. Here’s the key graph:

“We also see many governments failing to prepare for the future, on issues ranging from retirement and infrastructure to automation and worker retraining. As a result, society increasingly is turning to the private sector and asking that companies respond to broader societal challenges. Indeed, the public expectations of your company have never been greater. Society is demanding that companies, both public and private, serve a social purpose. To prosper over time, every company must not only deliver financial performance, but also show how it makes a positive contribution to society.”

The irony, of course, is that many CEOs see the investor community as a key source of pressure to pursue short-term profit over all else—which often works against efforts to address social goals. Moreover, BlackRock’s heavy focus on index funds, which have to stay invested in the stocks in a given index, gives it less sway over companies than activists willing to dump a stock if their demands aren’t met.

Still, with $6.3 trillion under management, BlackRock’s call for companies to do a better job explaining not only their financial performance, but also the societal impact of their business, is a welcome one. Fink said the company is doubling the size of its “investment stewardship” team to engage with companies and boards on both strategy and purpose.

At Fortune, we’ve created the CEO Initiative for a similar reason—to help corporate leaders share best practices and develop common goals for addressing societal problems. The effort grew out of our meeting at the Vatican in 2016 and a follow-up in New York last September, and we will be gathering again in San Francisco June 25-26 this year. If you’d like to be a part of this effort, send me an email. We think it’s an important one.

More news below.

Alan Murray
@alansmurray
alan.murray@fortune.com

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