Wall Street Is Going Green

Wildfires burned nearly 10.4m acres across the US last year. The most costly thunderstorm in US history caused $7.5bn in damage across Illinois, Iowa, Nebraska and South Dakota. As the climate crisis swept the globe on a biblical scale it left in its wake a record number of billion-dollar disasters.

Dominic Rushe – Reading the writing on the wall: why Wall Street is acting on the climate crisis

Those numbers come from the Article referenced above. Despite the controversy that surrounds climate change, momentum is growing. An increasing focus on Purpose, activist investors, the cost of disasters, and sheer economics, all serve as Catalysts. Polarized positions on the topic still exist, but these catalysts are doing what humans have been unable to do on their own: driving a focus on net zero. Author Dominic Rushe states that a growing trend in investment went mainstream in 2020, with a record number of corporations pledging to move to cancel out the carbon emissions they produce. One of the drivers behind this tectonic shift is Wall Street. Exxon lost $22bn last year and after decades of denying the climate crisis, they were forced to elect climate activist investors to their board.

By September last year more than 800 cities, 100 regions and 1,500 companies had pledged to decarbonize their societies and economies, according to the research group Data-Driven EnviroLab and the NewClimate Institute. Between them those companies have combined revenue of over $11.4tn and are responsible for 3.5 gigatonnes in greenhouse gas emissions, an amount greater than India’s annual emissions.

Dominic Rushe – Reading the writing on the wall: why Wall Street is acting on the climate crisis

Investors therefore are likely to play a major role in pushing for climate action. Major money managers like Larry Fink, the founder and chief executive of BlackRock, are on board as well. He announced environmental sustainability as a core goal for his company, one that manages $7tn in investments. Other big money managers including Fidelity and Vanguard are also on board. Add to this a generational shift that represents a greater awareness of sustainability, and you have another catalyst. A wealth handover from baby boomers to gen X and millennial investors means this is likely a lasting trend. Although sustainability is one driver, the returns associated with green investments is another. Still, many believe that this shift is simply seeing the writing on the wall. Customers, science, and the general public are all pushing both the corporate world and the investment community towards this tectonic shift.

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