“Climate Risk Is Investment Risk”–Coming from an Authoritative Source

BlackRock Inc. headquarters in New York

BlackRock, the world’s largest investment management corporation with nearly $7 trillion under management, has recently committed to make investment decisions with environmental sustainability as a core goal, and begin to exit certain investments that “present a high sustainability-related risk,” such as those in coal-fired power.

A spokesperson was interviewed on PBS’s fabulous show Amanpour and Company this morning, and explained the firm’s decision in terms of pure dollars and cents.  When asked about the underlying thought process for this decision, he replied, tersely, “Climate risk is investment risk.” That is, companies that contribute to climate change and other environmental damage have financial exposure on numerous fronts.

Though he wasn’t specific, these risks clearly include increasingly burdensome government regulation, consumer abandonment and bad public relations.  To that list should be added competitive encroachment, as vast amounts of technology R&D is being focused on clean energy and transportation solutions, sustainable ag…or, really, sustainable anything.  I’m happy to report that any company whose product is ruining the health of our planet is in danger, whether that’s in the short, medium, or somewhat longer term.