Larry Fink, chief executive of BlackRock, which manages $6 trillion in investments, told business leaders that if they want to do business with BlackRock moving forward, they’re going to need to contribute to society in addition to making a profit. It’s an enormous step from one of the world’s most influential money managers ...

Think about this decision-making process from the perspective of a CEO. You need your company to make money, which means you care about your stock price. Your stock price depends not on your quarterly earnings but on what investors are willing to pay for it. And if large investors believe that you are a despicable company, you could be very profitable, but no one will want to own your stock. (As one extreme example: Harvey Weinstein has made a lot of money for a lot of people, but now his company is going into bankruptcy because of the values he lived by while running it.)

BlackRock’s decision could actually change the day-to-day behavior of CEOs, boards and leadership teams in ways that philanthropy, CSR and past impact investing initiatives have not.

Read the full article about BlackRock's potential game-changer in impact investing by Ross Baird at ImpactAlpha.