Findings, music, and occasional reflections by Paul Woodward

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The climate crisis is reshaping the world of finance

Bill McKibben, Alec Connon and Elana Sulakshana write:

Historians should mark the date. On Jan 14, BlackRock, the world’s largest asset manager, with more than $7.4 trillion under management, announced that the climate crisis has now grown so severe that it has become a force that will “fundamentally reshape” the world of finance.

In his annual letter to CEOs, Larry Fink, CEO of BlackRock and one of the most powerful corporate executives in America, warned that BlackRock now expects to see business plans for “operating under a scenario where the Paris Agreement’s goal of limiting global warming to less than two degrees is fully realized.” He also promised that his company will “hold accountable” any companies’ board members that do not make sufficient progress in aligning their business model with the Paris Agreement’s goal.

This is no idle threat. BlackRock holds an 8 to 11% stake of every company in the Fortune 500. Shareholder resolutions and board appointees are made or broken on how BlackRock votes. When Larry Fink speaks, Wall Street CEOs listen.

It should come as no surprise that the climate crisis — a force that is fundamentally reshaping our physical world, from turning our oceans into an acidic mess to turning the Arctic into an open-air swimming pool — is also reshaping the financial system. The only question now is if we can reshape the world of finance fast enough to prevent our physical world from being reshaped beyond all recognition. There are a few promising signs. [Continue reading…]

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