BlackRock CEO Larry Fink has sent a letter to shareholders, warning that Russia’s invasion of Ukraine is ending globalization.

Companies the world over have been joining governments in sanctioning Russia over its invasion of Ukraine, leading to some of the most extensive and comprehensive sanctions ever imposed on a country. BlackRock is no exception, imposing its own limitations on doing business with Russia.

The company’s CEO outlined some of those actions in his letter.

BlackRock has been committed to doing our part. Grounded in our fiduciary duty, we moved quickly to suspend the purchase of any Russian securities in our active or index portfolios. Over the past few weeks, I’ve spoken to countless stakeholders, including our clients and employees, who are all looking to understand what could be done to prevent capital from being deployed to Russia.

Fink believes the fallout will go far beyond the immediate impact of the war and resulting sanctions, however.

The ramifications of this war are not limited to Eastern Europe. They are layered on top of a pandemic that has already had profound effects on political, economic, and social trends. The impact will reverberate for decades to come in ways we can’t yet predict.

Fink predicts a major casualty is the globalization that became the status quo after the Cold War ended.

But the Russian invasion of Ukraine has put an end to the globalization we have experienced over the last three decades. We had already seen connectivity between nations, companies and even people strained by two years of the pandemic. It has left many communities and people feeling isolated and looking inward. I believe this has exacerbated the polarization and extremist behavior we are seeing across society today.

The invasion has catalyzed nations and governments to come together to sever financial and business ties with Russia. United in their steadfast commitment to support the Ukrainian people, they launched an “economic war” against Russia. Governments across the world almost unanimously imposed sanctions, including taking the unprecedented step of barring the Russian central bank from deploying its hard currency reserves.

Despite the challenges the sanctions may cause, Fink believes they demonstrate a pivotal element of capital markets, especially when companies make decisions according to their core values.

These actions taken by the private sector demonstrate the power of the capital markets: how the markets can provide capital to those who constructively work within the system and how quickly they can deny it to those who operate outside of it. Russia has been essentially cut off from global capital markets, demonstrating the commitment of major companies to operate consistent with core values. This “economic war” shows what we can achieve when companies, supported by their stakeholders, come together in the face of violence and aggression.