TOKYO -- Japanese companies need a clear "purpose" behind their pursuit of profits, the leader of U.S. asset management firm BlackRock said in a letter dated Monday, urging them to adapt to a new generation increasingly focused on the impact a business has on the world at large.
When a company "truly understands and expresses its purpose, it functions with the focus and strategic discipline that drive long-term profitability," Chairman and CEO Larry Fink said in the message to some 500 Japanese companies in which BlackRock invests.
Over 60% more of millennial workers think that businesses should be "improving society" than "generating profit," Fink wrote -- a reference to a Deloitte survey of millennials working full-time with college or higher degrees.
As more wealth transfers to younger generations, companies will need to be able to serve all stakeholders, including shareholders, employees and communities, the letter said. Environmental, social and governance factors will be increasingly important in corporate valuations, Fink predicted.