Whether holding companies accountable to environmentally sustainable practices or linking long-term investing with societal inequalities, change is a space where Frank Cooper thrives.
“I love change,” said Cooper. “With change, you have the opportunity to be creative and change the rules yourself.”
But to Cooper, change within a company is difficult the engagement of everyone — from the CEO to the staff members seeded throughout. Speaking with John Battelle during the height of the pandemic, the then-Global CMO for BlackRock spoke about the storied investing firm’s commitment to environmental sustainability. But he said that shift was only possible when brands take down posters and sizzle reels and instead work to instill a sense of purpose inside each employee so they feel they’re contributing to something larger than themselves.
“They have to find that connection point so that they feel energized by it, and they have a sense of fulfillment,” he said. “Because the CEO can’t do it, the CMO can’t do it, the CFO can’t do it alone.”
Hear more from this dynamic conversation between Cooper and Battelle from the 2020 Signal Stage in the video below, or read our lightly edited transcript.
TRANSCRIPT
John Battelle
Next up, we have a conversation with another leader and quite related, in that Frank Cooper is the Chief Marketing Officer of BlackRock, the largest institutional investor in the world. Certainly the conversations that we’ve had this morning around climate and sustainability are directly impacted by BlackRock’s own decisions and statements earlier this year, where BlackRock became a major leader in the fight against climate change. Welcome to the Signal stage, Frank Cooper.
Frank Cooper
Thank you, John. Great to be here.
This morning’s announcement from P&G certainly is significant, and it’s aligned with an announcement that BlackRock made in January. It feels like it was a decade ago, given that it was before the pandemic reached the shores of the United States. But back in January, it made significant waves. Can you give the audience who may not be familiar with BlackRock’s, announcement and work, a little bit of detail and framing around that issue.
Every year, in January, Larry Fink, our co-founder and CEO writes a letter to all the CEOs of other portfolio companies in which BlackRock invest. We’re the largest investor in, in most publicly-traded companies, and so there’s a lot of influence behind that. Over the years, where he has focused on long term, he’s focused on diversity and inclusion. But over the past couple of years, it’s been mostly about purpose. In January of this year, January 14, he announced that sustainable investing and environmental sustainability will be BlackRock’s standard. We’re going to hold portfolios accountable for advancing efforts in environmental sustainability. Because we believe one thing, we believe that climate risk is investment risk. That really was the link for us to make a core to what we do. We’ve been active in doing that. We recently, in fact, two days ago released a investment stewardship report that indicated our voting record, but also how we’re engaging with companies so that we can encourage them to head down the path of addressing climate change and becoming more sustainable in their actions.
For those who are in the audience who may not understand exactly how there are teeth involved in this, you mentioned your voting. Can you can you unpack that a bit how, as an investor in public companies, do you have an impact on the actions of boards, management and corporations at large?
Because we hold the shares, and we act as a fiduciary so first and foremost, we hold the shares on behalf of our clients. We’re representing the clients, we think it’s in their best interest that the management of these companies are looking out for the long term interest of their companies. There are a few things that we believe are in alignment with the long term interests of the company. We believe that environmental sustainability is certainly one of them.
So every year, we have an opportunity to vote. We don’t just show up at the time of voting, we show up frequently with the company’s leadership. We explain why we believe things like diversity on boards is important and why that actually creates long term value for the company. We explain why we believe taking certain actions for environmental sustainability actually bolsters the performance of the company long term. Then ultimately, we have to make a decision about how we’re going to vote, whether we’re voting against certain board members, or we’re voting in support of or in opposition of certain proposals that come before the company on an annual basis. So we’re increasingly using our leverage, both in terms of engaging with these companies, but also voting and we’re being more transparent about both.
I’ll tell you, John, historically, we tried to handle a lot of this behind closed doors, to try to encourage children to do the right thing. But the expectation of people, if you look across all the stakeholders, including employees, customers, communities, the expectation now is that the company and investors should be transparent about their actions. So we’re embracing that, we think it’s a good thing. And if you look at our most recent investment stewardship report, it demonstrates that we’re very open about how we’re approaching some of these issues.
You mentioned more than once a phrase that I’m fond of, “long term.” However, I think it’s fair to say that the mantra on Wall Street for the past few decades has not been long term. As a matter of fact, it has been quarterly results, short term focused thinking, and there are a number of practices across Wall Street and corporate America that have bolstered short term thinking. So I’m curious how do you square what is traditionally understood to be the Wall Street, you know, North Star, which is make your quarterly numbers, drive profits for shareholders, and that’s it, to long term thinking, multi stakeholder approach. Those two things seem pretty opposed.
There’s a definite tension there. That’s why I’ve mentioned Larry’s letters, because the long term perspective is necessary for all of this to work. But the good news is, they’re increasingly more investors who believe that the long term value is the play they should make, both in terms of investing their values, because they want to see a world that is improved through the investment. But also, they believe it’s the better way for them to generate returns.
If you look at just what happened with sustainable investing during the COVID-19 crisis, many people thought that you’re going to see investors kind of flee from sustainable investing, because there was this underlying feeling that in the short term, maybe sustainable investing is not a great return. But 90% of the sustainable indices outperformed their parent benchmark during that period of time. In fact, we’re seeing such resilience that has been one of the drivers of growth for BlackRock and for many investors coming from the spirits. So, I think there’s an awakening among investors, at least a segment of investors, that the companies that are pursuing sustainable strategies will be stronger in the long term. But we’re increasingly seeing that even in the short term that’s true.
I tell you, when I saw the P&G announcement, I was really motivated and encouraged by it, because to me, it demonstrated courage. But more important than that, it demonstrated what purpose driven leadership looks like today, where your actions are going to be louder than your words, you’re gonna set very specific goals and very specific actions within a definite time period. I think when you start to see companies like P&G lead the way, that gives other companies permission to follow. I think that’s going to create the right momentum within the investment community, in regard to long term investing.
You know, Frank, I’ve been trying to get you here to Signal for some time. I’m thinking this almost looks like a setup, because we have you right after David [Taylor] was here. But the truth is you agreed to do this, before you knew about the announcement. I’m curious you just found out about it. So does that hits you in a way that you feel is a signal that could spread to other companies. Is that fair to say?
100%. And I did not know about it, so I was very pleased when I heard it, and encouraged because we need that kind of demonstration of leadership for this to work. But John, I think what’s happening right now, the most advanced companies are evolving from this idea of discovering their purpose, which is a necessary step. You have to discover your purpose, purpose is not invented, it’s actually revealed within the company beforehand. That’s the whole process you have to go through. But where the action is right now is how do you make that real? How do you infuse it in a way that there’s a consistent sustained action around your purpose? Purpose and action is the next step. When you see a step like this, where P&G goes beyond, the baseline of science-based targets for reducing green greenhouse gas emissions, to going to these kind of natural climate solutions. That’s a commitment that is much deeper than just checking a box to try to appease a certain segment of our stakeholders is rooted in what you really believe. There’s no reason for them to take that action unless they actually believe it’s something that’s consistent with their purpose. Again, I think that’s the phase we’re in now, in terms of purpose driven leadership and purpose driven companies. It’s how do you move from understanding what your purpose is to how do you make it real within the company?
I’ll say one more thing that I think is critical, and I heard a little bit of this in your conversation earlier. The key to unlock to all of this is not putting posters around your office, it’s not running a sizzle video is not the perfection of the purpose statement. The key to all of it, is actually having your workforce, each employee finding a personal connection into your purpose statement into what the purpose of the company is, they have to find that that connection point, so that they actually feel energized by it, and they have a sense of fulfillment, and that they understand how they’re contributing to something larger than themselves. It’s the only way to bring it to life. Because, you know, the CEO can’t do it, the CMO can’t do it. The CEO, CFO can’t do it alone. It requires the entire workforce to row in that same direction, so that you start to gain more momentum. People understand what you stand for, why you exist in society, but they can see it on a day to day basis.
Allow me to pivot to your role at BlackRock. You’re the chief marketing officer, and you have quite a storied career. You’ve been at a number of well known brands, including Pepsi. But here you are the CMO of BlackRock, you’ve got a huge platform that you’re about to roll out in January with Larry Fink’s letter. It’s going to be all about climate sustainability and purpose, and then the pandemic hits. How did that impact you doing your job and rolling out this communications and marketing strategy, given that at least for the last four months, as much as we have seen that climate and sustainability are definitely interwoven with the pandemic and important ways, how did you keep that you keep on message, or did you pivot message? And where are you heading next?
I think this pandemic, like most social crises, they reveal underlying tensions that already exist within society. This one’s no different. So the environmental crisis that we’re all facing, continues to exist, but the COVID 19 pandemic, illustrated that the fractures within among groups within our society, the inequality, racial injustice those actually feed everything. If you look at environmental sustainability, the impact on underserved communities and communities of color is much greater. That revealed, for us, what has changed, is we’re still committed to and we will aggressively pursue our agenda and sustainable investing. Sustainable investing includes environmental. But I think what we’re seeing is the rise of the “S,” the social factors. That’s something that we did not anticipate doing in 2020. We certainly had it on the agenda. But we’ve accelerated that. We’ve already done some of it right through diversity and inclusion. But we have to now go squarely against it. Issues like wealth inequality, race and inequality, LGBTQ rights, these social factors are all rising up very quickly, and we intend to address that. Good news is that they’re related to the other factors. You can’t separate wealth inequality from environmental issues. They are deeply interrelated across regions of the world. Depending on what side of it you’re on, in some cases, local communities, they sustain themselves off of generating lots of greenhouse gas emissions. You have to address that because if you pull that out, you’re actually devastating that particular community. But you also have some communities here in the United States, particularly black and brown communities that suffer disproportionately from the effects of greenhouse gas emissions. And so it’s all connected.
What I’m most excited about is this, is that I feel like everything I’ve done up until now has prepared me for this. I’ve always considered myself a purpose-driven executive. When I was in the entertainment business, I looked at that really as purpose of bridging gaps between cultures. You know, Motown and Def Jam was that. In 2007, at PepsiCo and Indra Nooyi announced “Performance with Purpose,” and we were trying to focus on how we transform that portfolio. Buzzfeed we tried to pulled marginalize people onto the center stage so that we can shine the light on them and show the dignity of those groups and those individuals. I feel like that all has culminated into this, where I think the connection between wealth this whole idea of financial well being is now ready for primetime. It’s our opportunity to step forward, we can look at that through the dimension of sustainable investing, we can look at that through the dimension of climate change, we can look at that through the dimension of social change. For me, I feel like my entire career prepare me for exactly that.
Yeah, yeah. Well, it’s exciting times. I’m curious, given all the changes in the media landscape, which we discussed yesterday with Linda Yaccarino, Rich Greenfield and others, you know, how has that changed your job as a communicator at scale with BlackRock?
I start with this. I know a lot of people say this, and they don’t really mean it., But I actually really mean, I love change. Because with change, you have the opportunity to be really creative and actually change the rules yourself. For me, the way I look at it is that the traditional interruptive advertising model has been eroding for years anyway. And John you know this better than anyone else, the Internet was not built for advertisers. That’s not why it was built. But it’s built for communication. The question is, how do you want to communicate to people in ways that add value to their lives. What I’ve been trying to do is shift our spend toward content that actually enhances people’s experiences. We’ve developed a newsroom internally, we’ve developed original content, we’ve partnered with companies like Indigenous Media, where we are we’re doing 60-second documentaries. We still do some advertising, but highly targeted, and data driven. There’s still a role for advertising, we put it in a much more limited space, it’s highly targeted, it’s data driven. But we’re really focused on what are the content and experiences that we can develop either on our own or in partnership with others that will enhance someone’s experience, rather than interrupting. I’m excited about that opportunity.
It’s not for me so much about spending less money on a particular platform. It’s not about that at all. I just want it to be more effective. I want it to be consistent with what’s happening in culture, and what people’s expectations are. We take ourselves out of our daily role and look at what do you really enjoy. Most of us don’t enjoy being interrupted when we’re trying to find something online. Most of us don’t enjoy interrupted if we’re having a conversation with a friend. But if you add value to that, we actually enjoy that. I think it’s a huge opportunity. It requires a shift in thinking for marketers, for media buyers, but also for the platform’s. I’m hopeful that this shift is happening because we’re all trying to do the same thing, which is be more effective in communicating with the people that we want to engage with.
Frank, I have to say it’s great both to have you at the helm of the marketing organization there, BlackRock and have BlackRock as an ally in this shift that’s happening inside of corporations around the world. So thank you so much for bringing your voice to Signal.
Really appreciate it. Take care. Thank you.
