February 3rd, 2020

Discourse Analysis
I.
The fields of economics and finance produce many pieces of writing meant to share
information with not only other professionals in the field but also with all stakeholders in an
economy. A stakeholder is anyone with an interest in or could potentially be affected by a
change in a business, or more generally, the economy. Most everyone lives their daily life within
many different economies; local, regional, state, federal, and global. If we want to maintain or
improve our current lifestyle, we all have a vested interest in the continued wellbeing of these
economies. A shareholder, on the other hand, is someone with direct ties to a company, usually
through direct investment or the holding of stocks. Different forms of economic writing serve to
keep everyone informed, not just those interested in economics or those with invested money.
The main goals of the financial system are best defined by the US Central Bank, the
Federal Reserve (Fed), and they are as follows: maximizing employment, ensuring stable prices,
and promoting economic growth (Board of Governors, 2002). The Fed works toward these goals
because they believe the long-term success of the economy is largely dependent on those factors.
As a result, the Fed affects change on the economy they hope will result in economic prosperity.
However, the main value of most investors is to maximize personal or companywide financial
returns. This difference in values has led to an unsustainable economy that must be reformed if
humans wish to continue using Earth’s resources.
My long-term goal has always been the success of all living creatures on Earth, from
humans, to animals, to plants. I wanted to study economics because I understood that if we also
want to protect our way of life, we will need to ensure the sustainability of our economy. The
desires of the Fed, maximum employment, stable prices, and economic growth, will provide that.
But we cannot sacrifice the environment in this pursuit. Without a healthy environment, there are
no resources for a healthy financial system.

II.
There are many different types of writing in the field of economics, and more specifically
environmental economics. Informational articles and research papers are used to communicate
new information and share knowledge, like any other scientific field. There are many economic
magazines, journals, and online archives that publish these works and distribute them to a wider
audience. There are hundreds of online and print journals, a few of the most popular being The
Quarterly Journal of Economics (Oxford University), Journal of Financial Economics
(Elsevier), Journal of Finance (American Finance Association), and Econometrica
(Econometric Society).
The type of writing I selected is somewhat unique to the world of business, finance, and
economics because the company has a direct obligation to its customers to ensure the proper
investment of their hard-earned money. Many investment management firms release quarterly
letters to their stakeholders to keep them informed on general market trends and alert them to any
developments that may affect the future growth of their investments. These letters have
traditionally been mailed to shareholders at the conclusion of each quarter, but most are now
found on their websites.
It is common in this field for the directors of large corporations to put out letters
informing their stakeholders of the success or failure of the last quarter. Letters are also sent out
by CEOs to inform their customers and employees of major changes in the company. Providing
detailed and frequent communication keeps investors happy by establishing and maintaining
trust. This is especially important for investment management firms like BlackRock, the focus of
this discourse analysis, that manage trillions of dollars in assets.
In my own career I do not expect to write any letters to stakeholders in my company
because I do not intend to run an investment management firm. However, I find them to be
valuable tools to share relevant information about market projections for my personal
investments.

III.
Larry Fink, the CEO of BlackRock, one of the largest investment management firms in
the world, recently wrote a letter titled “A Fundamental Reshaping of Finance.” In it, Fink
informs his stakeholders that BlackRock will now take sustainability, both environmental and
economic, into consideration when determining where to invest. The overall tone of the letter is
informative but also urgent. The trust Fink creates by seeming transparent in his business actions
can be used to enact positive change in a short period of time. As a large investment management
firm, they know they can potentially affect massive change in the industry and as they say in
their mission statement, their “culture of innovation has been, and continues to be, the foundation
of our success” (Fink, 2019). Fink believes that with their reputation as innovators, they can
drive the industry to a more sustainable future. They may also use this as an opportunity to draw
younger investors to BlackRock over their more traditional and old-fashioned competitors.
The author of the piece is writing to inform his stakeholders of a pretty major change and
is in no way asking for permission. This is a big change from a financing point of view and that
is why so much of the letter is focused on explaining the reasoning behind the change. He knows
there is going to be backlash and attempts to provide answers to inevitable concerns in the initial
announcement. Fink also establishes himself as a leader in the field by stating, “over the 40 years
of my career in finance, I have witnessed a number of financial crises and challenges.” Not only
is the reader immediately informed of his time in the industry, he also demonstrates his ability to
work through the good and bad times. The trust this generates is a key theme throughout the
letter and an important aspect of any CEO letter.
This particular letter was published on BlackRock’s own website, on its own unique
page, with no ads or other material to crowd the CEO’s letter. This was an intentional choice and
serves to solidify the importance of the message. The letter also does not reference any outside
sources. Instead, it is followed by links to more information on where the company stands in
regards to “Sustainable Solutions”, “Corporate Sustainability”, and “Investment Stewardship”.
This piece is meant as more informational than anything. While it does provide evidence for
BlackRock’s decision to be more sustainable, its main purpose is only to keep stakeholders in the
loop.
The letter itself is broken into 4 sections; an introduction followed by three sections
calling out the priorities of BlackRock as a company: “Climate Risk Is Investment Risk”,
“Improved Disclosure for Shareholders”, and “Accountable and Transparent Capitalism.” Each
of these sections include short, digestible paragraphs that make the letter very approachable,
whether or not you are an expert in the field. This is important because the letter is intended for
everyone that trusts BlackRock with their investment money. Certainly, that large group will
include people from various backgrounds. In addition to informing their stakeholders of a change
in the company, the letter also holds information intended to inform and caution everyone about
the importance of considering sustainability when determining where to invest.
The main audience of the letter is the people who have invested money with BlackRock
and the companies in which BlackRock invests. However, the letter also calls for governments
and the private sector to work together, going on to propose that “while government must lead
the way in this transition, companies and investors also have a meaningful role to play.” This
expands the audience beyond BlackRock’s direct stakeholders and makes the letter relevant to
anyone reading. However, by calling for the action of everyone, the free-rider problem is
created. This means that if everyone is expected to do something, no one will take action in the
hopes that someone else will. Fink outlines the steps BlackRock has taken and encourages others
to do the same but without consequences, no change is possible. Fink highlights that while large
companies can and should play a role in the economic transition to a more sustainable economy,
the ultimate change must come from governments around the world.
The tone of the letter is urgent yet reassuring. Fink does not shy away from the enormity
of the problem of global climate change, nor does he make light of the situation. Fink’s realism
is refreshing and echoes the no “BS” attitude of many successful financing firms. He outlines the
problems global climate change will cause, with a focus on how it will negatively impact future
returns. Fink sums this up in the last sentence of his letter saying that by adopting sustainability
as a value, “your company will enjoy greater long-term prosperity, as will investors, workers and
society as a whole” (Fink, 2020). This is a direct appeal to what the majority of investors care
about the most, the future return on their investment. One of the major hurdles the climate
movement has yet to push past is highlighting the reasons everyone should care about climate
change. This means not just focusing on shrinking ice caps and the extinction of species because,
unfortunately, that is not enough to make the vast majority of people care. Putting climate
change into terms that are relevant and impactful to the target audience greatly increases the
letter’s effectiveness. For example, Fink puts sustainability into a term investors already care
about, money, when he states “as trillions of dollars shift to millennials over the next few
decades… they will further reshape the world’s approach to sustainability” (Fink, 2020).
Towards the beginning of the piece, Fink asks the reader a series of rhetorical questions
that guide the reader along his line of thinking and what led him to believe that a change needs to
occur if we are to save our planet from climate and economic disaster;
 What will happen to the 30-year mortgage – a key building block of finance – if lenders
can’t estimate the impact of climate risk over such a long timeline, and if there is no
viable market for flood or fire insurance in impacted areas? What happens to inflation,
and in turn interest rates, if the cost of food climbs from drought and flooding? How can
we model economic growth if emerging markets see their productivity decline due to
extreme heat and other climate impacts? (Fink, 2020)
All of these questions mention the climate issue but also involve the influence those changes
would have on the 30-year mortgage, insurance, inflation, interest rates, and economic growth.
The values of finance and economics are broadly to maximize employment, ensure stable
prices, and promote economic growth. Fink calls on all these values in order to present a new
value, sustainability. His base argument is that we cannot have long-term economic growth
without adopting sustainability as a core value. His call to action is a powerful step in the right
direction, though as Fink mentions, real change is only possible with the full support of
international governments, investors, and companies.
 Works Cited
Board of Governors of the Federal Reserve System. “Government Performance and
Results Act Planning Document.” Federal Reserve, 2002,
www.federalreserve.gov/boarddocs/rptcongress/98frgpra.pdf.
Fink, Larry. “A Fundamental Reshaping of Finance” BlackRock, 2020,
https://www.blackrock.com/corporate/investor-relations/larry-fink-ceo-letter .
Fink, Larry. “Principles.” BlackRock, 2019, www.blackrock.com/corporate/about-
us/mission-and-principles.