How Brian Moynihan of Bank of America became the king of stakeholder capitalism—and took the crown from Black Rock’s Larry Fink

That is one conclusion of JUST Capital’s latest ranking of U.S. companies “on the issues that matter” to stakeholders. The ranking measures how a company invests in its workers, supports communities, and minimizes environmental impact. For the first time ever, Bank of America topped the ranking. By contrast, the other royal of stakeholder capitalism, BlackRock, fell almost 50 places to 92nd.

For insiders, it was always clear Moynihan was one of the leaders of the movement. He was the driving force, for example, behind the “Stakeholder Capitalism Metrics,” a World Economic Forum initiative aimed at rallying companies from around the world behind common ESG reporting. (Disclosure: I worked on the initiative as an employee of WEF in 2020 and 2021.)

But Bank of America had less of a public profile on the topic. The uncontested leader in this regard was Larry Fink at BlackRock, who as early as 2018 in his letter to CEOs, warned that their companies “must benefit all of their stakeholders” or “ultimately lose the license to operate.” It sounds familiar now, but half a decade ago it was a headline-making message in media.

In recent years, however, BlackRock became a primary target of the politicization of ESG, and Fink flinched. Faced with the outflow of hundreds of millions of dollars from his funds in conservative states like Texas and Florida last year and concerted attacks from Republican politicians, Fink changed tune in recent months, defending his oil and gas bona fides and largely staying silent on the “S” of ESG.  

Perhaps no public appearance better reflected this new tone than a recent interview Fink gave to Nicolai Tangen, CEO of the Norwegian sovereign wealth fund. In the interview, released on Wednesday, Fink declined to even utter the word “ESG.” He distanced BlackRock from “Scope 3” CO2 emissions reporting, and, when asked about the future of ESG investing, he pointed to carbon capturing.

Those contrasting public appearances, of course, are just that. Words, not actions. That makes the JUST Capital ranking this week the real turning point. The surge of Bank of America in the list is impressive. Back in 2020, the bank held the 70^th position, coming in behind BlackRock. But then it started a steep rise. And this year, it took the absolute top spot among 1,000 listed companies.

What explains the rise of Bank of America? “Specific things can make a difference,” Martin Whittaker, the CEO of Just Capital told me. In the case of BofA, it gradually increased the minimum hourly wage to $23 in 2022, expanded maternity and paternity leave from 12 weeks to 16, and, instead of doling out layoffs during a restructuring, let natural attrition reduce its headcount.

Such specific improvements aren’t only for outranking competitors, Whittaker told me, but keenly felt on the ground by the people working for or with the bank. “Lots of people that worked with [Bank of America] came to us and said: We saw the improvement [our employer is making], and we’re happy you recognized it.”

On a personal note, this comment really resonated with me. As a father of young children, I’m hyperaware of my employer’s parental leave policy and grateful when it stands out from others.

As Bank of America, under Brian Moynihan’s leadership, complemented words with actions, BlackRock made no progress on the JUST ranking. For the past four years, it hovered around the 50^th place on the list. This year it dropped down almost 50 places to 92nd. It’s still top in its industry—capital markets— and ranked among the 10% best companies in America, but it’s in a position that doesn’t necessarily match its pontificating CEO.

Is there a lesson in this tale of two Wall Street kings and the JUST 100 ranking more broadly? “Individual leadership makes a real difference,” Whittaker told me. “I really believe that. Companies can rise to the top if they have someone at the helm who is committed to creating value for all of their stakeholders.”   

Peter Vanham
Executive Editor, Fortune Impact and Connect
@petervanham
peter.vanham@fortune.com

Also on our radar:

Conservative ESG Boycott May Cost Taxpayers Hundreds of Millions of Dollars: Study
“As several states consider new anti-sustainable investing initiatives, [a] new analysis shows taxpayers in six states could have been on the hook for up to $700 million in excess interest payments, if restrictions on sustainable investing had been in place,” the Ceres Foundation wrote to me in an e-mail. The nonprofit focused on sustainability commissioned a study together with As You Sow, a shareholder advocacy nonprofit, and concluded that “Taxpayers in Kentucky, Florida, Louisiana, Oklahoma, West Virginia, and Missouri could have faced upwards of $708 million per year in additional interest charges on municipal bonds, if Texas-like restrictions had been in place." You can read their analysis here.

“Sustainability Barbie” fans respond
Last week’s “Sustainability Barbie” piece led to a lot of reactions from readers, including some Fortune 500 chief sustainability officers. Here’s an overview of some of the most eye-catching ones:

“I’m proud to be part of the growing group of female CSOs who are driving positive impact for people and planet.” —Kate Brandt, chief sustainability officer, Google

“I love the idea of a CEO Barbie and would also like to see a CEO Licca-chan [Japanese doll] in Japan. When executives roles don’t have a tried and tested playbook, organizations seem to be willing to consider ‘non-traditional’ candidates. I hope there will be many more opportunities in the future, like the current CSO roles, that will open up doors for talented colleagues with diverse backgrounds and perspectives. As a result, we will continue to innovate and make progress.” —Takako Ohyabu, chief sustainability officer, Takeda Pharmaceutical

“Having engaged in various environments with fellow female CSOs, I can attest to the ambition and intention these women bring to their organizations and personally it’s an inspiration. […] And Peter, I like your premise that Mattel will have to bring to life another corporate Barbie next: the CEO Barbie.” —Ellen Jackowski, chief sustainability officer, MasterCard