Financial giants were already trimming their climate pledges amid Republican attacks. Then came concerns about legal risks.
Many of the world’s biggest financial firms spent the past several years burnishing their environmental images by pledging to use their financial muscle to fight climate change.
Now, Wall Street has flip-flopped.
In recent days, giants of the financial world including JPMorgan, State Street and Pimco all pulled out of a group called Climate Action 100+, an international coalition of money managers that was pushing big companies to address climate issues.
Wall Street’s retreat from earlier environmental pledges has been on a slow, steady glide path for months, particularly as Republicans began withering political attacks, saying the investment firms were engaging in “woke capitalism.”
But in the past few weeks, things accelerated significantly. BlackRock, the world’s largest asset manager, scaled back its involvement in the group. Bank of America reneged on a commitment to stop financing new coal mines, coal-burning power plants and Arctic drilling projects. And Republican politicians, sensing momentum, called on other firms to follow suit.
The reasons behind the burst of activity reveal how difficult it is proving to be for the business world to make good on its promises to become more environmentally responsible. While many companies say they are committed to combating climate change, the devil is in the details.
Uh, is it money? Because I bet it’s because of money.
I read the article for you and yes, it is in fact money. Also it’s a tiny bit of cowardice and lies, but mostly it’s money.
My hero ❤️
Because money.
We all know the short answer is “because profit in the short term matters more than survival of our species as a whole to most people in the ‘business’ community.”
Hot take: it was a valiant effort by people with tremendous power and influence to do the right thing with the wrong tools. Blackrock et al. tested the hypothesis that companies can generate greater returns by doing good. In doing so they risked their reputation and relationships with their investors.
We all learned together that their hypothesis is wrong. One cannot add a constraint (ESG etc) without compromising returns, and the big money piles operate with mandates to maximize risk-adjusted returns.
That’s why markets need to be regulated in a way that prices account for external effects like human health or environmental damages.
I agree completely!
