Trillions of dollars are set to be invested in combatting the climate crisis and conserving Earth’s ecosystems thanks to a man named Larry Fink.
Fink is the chairman and CEO of BlackRock, the world’s largest asset management company responsible for the fate of trillions of dollars of other people’s capital.
It is perhaps unsurprising that, as climate change is making many of the world’s markets even more uncertain than usual, Fink has written letters to all the CEOs of companies he invests in informing them that climate change will now become the central tenant of his investment strategy.
“Climate change has become a defining factor in companies’ long-term prospects,” Fink wrote in his letter. “Last September, when millions of people took to the streets to demand action on climate change, many of them emphasized the significant and lasting impact that it will have on economic growth and prosperity—a risk that markets to date have been slower to reflect.”
“But awareness is rapidly changing, and I believe we are on the edge of a fundamental reshaping of finance.”
This warning was bold in the original, and as reported by NPR, BlackRock is not only adjusting their management strategies, but also the relationship with the companies they invest in.
This means that before making investment decisions, BlackRock will require companies to disclose any climate-related risks for their future, as well as plans for how they would operate under limits or constraints that could arise from Paris Agreement targets to keep warming under 2 degrees Celsius.
BlackRock will also dump shares from companies in its portfolios who manage 25% of their wealth from coal production or utilization, which already costs in many places 50-100% more to maintain and manufacture than renewables.
MORE: Whales Feces Represent One of the Greatest Allies Against Climate Change—Even More Than Trees
The 67-year-old billionaire also said that throwing BlackRock’s weight around as the world’s largest money management company is not beyond the pale, stating that: “We will be increasingly disposed to vote against management and board directors when companies are not making sufficient progress on sustainability-related disclosures and the business practices and plans underlying them.”
More and more, financial planners and investment companies are moving away from anything that stinks of CO2. This shift in market forces will be a much more powerful catalyst for change than the activism that, to give credit where credit is due, made these shifts possible—and it’s high time too.
The recent meeting of the United Nations’ Intergovernmental Panel on Climate Change left many activists entirely unsatisfied, and many countries, particularly in Southeast Asia, are still pouring money into coal and natural gas-fired plants. Governments have much less interest in a changing climate than, for instance, insurance companies might. Larry Fink knows this, and is pushing a lot of money into goading governments and companies to rethink the future—taking devastating floods and fires, and uncertainty, into the lexicon of their decision-making.
Plant Some Positivity By Sharing The Good News With Your Friends On Social Media…