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Global Warming and the Future of Investing

Eric Zuesse

On January 14th, the world’s largest investor, BlackRock, sent two historic letters, one addressed to “Clients” (basically the world’s wealthiest individuals and their financial advisors) and the other to “CEOs” (the heads of the firms in which the world’s largest investor invests), and they both announced the now inevitable earthquake that’s coming to global capitalism. The letter didn’t say precisely when it will hit, but did say, “In the near future – and sooner than most anticipate – there will be a significant reallocation of capital.” Here’s more from the two letters:

https://www.blackrock.com/us/individual/larry-fink-ceo-letter

A Fundamental Reshaping of Finance

Dear CEO,

As an asset manager, BlackRock invests on behalf of others, and I am writing to you as an advisor and fiduciary to these clients. …

I believe we are on the edge of a fundamental reshaping of finance.

The evidence on climate risk is compelling investors to reassess core assumptions about modern finance. …

Investors are increasingly reckoning with these questions and recognizing that climate risk is investment risk. …

In the near future – and sooner than most anticipate – there will be a significant reallocation of capital.

As a fiduciary, our responsibility is to help clients navigate this transition. …

Over the next few years, one of the most important questions we will face is the scale and scope of government action on climate change, which will generally define the speed with which we move to a low-carbon economy. …

We don’t yet know which predictions about the climate will be most accurate, nor what effects we have failed to consider. But there is no denying the direction we are heading. Every government, company, and shareholder must confront climate change. …

https://www.blackrock.com/us/individual/blackrock-client-letter

Sustainability as BlackRock’s New Standard for Investing

Dear Client,

Since BlackRock’s founding in 1988, we have worked to anticipate our clients’ needs to help you manage risk and achieve your investment goals. As those needs have evolved, so too has our approach, but it has always been grounded in our fiduciary commitment to you. …

The most significant of these factors today relates to climate change, not only in terms of the physical risk associated with rising global temperatures, but also transition risk – namely, how the global transition to a low-carbon economy could affect a company’s long-term profitability. …

As your fiduciary, BlackRock is committed to helping you navigate this transition and build more resilient portfolios. …

These models will use environmental, social, and governance (ESG)-optimized index exposures in place of traditional market cap-weighted index exposures. …

• Reducing ESG Risk in Active Strategies – In heightening our scrutiny on ESG issues. …

• Putting ESG Analysis at the Heart of Aladdin – We have developed proprietary measurement tools to deepen our understanding of material ESG risks. For example, our Carbon Beta tool allows us to stress-test issuers and portfolios for different carbon pricing scenarios. …

• Doubling Our Offerings of ESG ETFs. …

• Working with Index Providers to Expand and Improve the Universe of Sustainable Indexes. …

• Expanding Sustainable Active Investment Strategies. …

Our Commitment

Our role as a fiduciary is the foundation of BlackRock’s culture. …

We invest on your behalf, not our own. …

While the low-carbon transition is well underway, the technological and economic realities mean that the transition will take decades. Global economic development, particularly in emerging markets, will continue to rely on hydrocarbons for a number of years. As a result, the portfolios we manage will continue to hold exposures to the hydrocarbon economy as the transition advances.

A successful low-carbon transition will require a coordinated, international response from governments aligned with the goals of the Paris Agreement, including the adoption of carbon pricing globally, which we continue to endorse. …

The steps we are taking today will help strengthen our ability to serve you as a fiduciary. Sustainability is becoming increasingly material to investment outcomes. …

Basically, the world’s largest investor, BlackRock (manager of about $7 trillion in funds), is predicting that as the 90%+ consensus of climate scientists increasingly impacts the relative prices of renewable as compared to non-renewable energy-sources, the “ESG” premium on the renewable (such as solar, wind, etc.) will inevitably cause the non-renewable (coal, oil, and gas) energy-sources to need to become ever-cheaper in order to remain competitive — and this will drive down the values of stocks in the non-renewable category, and drive up the values of stocks in the renewable category.

These two letters are saying that this will be evident “In the near future – and sooner than most anticipate,” but “the technological and economic realities mean that the transition will take decades.”  There is an obvious tension between those two assertions. The “In the near future – and sooner than most anticipate,” is addressed to “CEOs,” but the “the technological and economic realities mean that the transition will take decades” is addressed to “Clients” — BlackRock’s customers, mainly the world’s billionaires and centi-millionaires, but also the investment-managers for large organizations. The “Clients” naturally have a preference for low perceived risk in their investments; and BlackRock is, in that letter, providing its clients the sense that there will be no earthquake to their investments. If one happens, BlackRock will be able to say to its clients, “We told you that this is coming, but it came faster than we and our competitors expected,” and they’ll be right about that. As regards the letter to “CEOs,” it’s telling them to transition as fast as is reasonably possible out of fossil-fuel investments and into renewable-fuel ones, in order to become less vulnerable to the shock, when it does hit. This makes good sense: keeping the clients comfortable, while telling the CEOs: “Make major moves on this ASAP!”

—————

Investigative historian Eric Zuesse is the author, most recently, of  They’re Not Even Close: The Democratic vs. Republican Economic Records, 1910-2010, and of  CHRIST’S VENTRILOQUISTS: The Event that Created Christianity.

Eric Zuesse

On January 14th, the world’s largest investor, BlackRock, sent two historic letters, one addressed to “Clients” (basically the world’s wealthiest individuals and their financial advisors) and the other to “CEOs” (the heads of the firms in which the world’s largest investor invests), and they both announced the now inevitable earthquake that’s coming to global capitalism. The letter didn’t say precisely when it will hit, but did say, “In the near future – and sooner than most anticipate – there will be a significant reallocation of capital.” Here’s more from the two letters:

https://www.blackrock.com/us/individual/larry-fink-ceo-letter

A Fundamental Reshaping of Finance

Dear CEO,

As an asset manager, BlackRock invests on behalf of others, and I am writing to you as an advisor and fiduciary to these clients. …

I believe we are on the edge of a fundamental reshaping of finance.

The evidence on climate risk is compelling investors to reassess core assumptions about modern finance. …

Investors are increasingly reckoning with these questions and recognizing that climate risk is investment risk. …

In the near future – and sooner than most anticipate – there will be a significant reallocation of capital.

As a fiduciary, our responsibility is to help clients navigate this transition. …

Over the next few years, one of the most important questions we will face is the scale and scope of government action on climate change, which will generally define the speed with which we move to a low-carbon economy. …

We don’t yet know which predictions about the climate will be most accurate, nor what effects we have failed to consider. But there is no denying the direction we are heading. Every government, company, and shareholder must confront climate change. …

https://www.blackrock.com/us/individual/blackrock-client-letter

Sustainability as BlackRock’s New Standard for Investing

Dear Client,

Since BlackRock’s founding in 1988, we have worked to anticipate our clients’ needs to help you manage risk and achieve your investment goals. As those needs have evolved, so too has our approach, but it has always been grounded in our fiduciary commitment to you. …

The most significant of these factors today relates to climate change, not only in terms of the physical risk associated with rising global temperatures, but also transition risk – namely, how the global transition to a low-carbon economy could affect a company’s long-term profitability. …

As your fiduciary, BlackRock is committed to helping you navigate this transition and build more resilient portfolios. …

These models will use environmental, social, and governance (ESG)-optimized index exposures in place of traditional market cap-weighted index exposures. …

• Reducing ESG Risk in Active Strategies – In heightening our scrutiny on ESG issues. …

• Putting ESG Analysis at the Heart of Aladdin – We have developed proprietary measurement tools to deepen our understanding of material ESG risks. For example, our Carbon Beta tool allows us to stress-test issuers and portfolios for different carbon pricing scenarios. …

• Doubling Our Offerings of ESG ETFs. …

• Working with Index Providers to Expand and Improve the Universe of Sustainable Indexes. …

• Expanding Sustainable Active Investment Strategies. …

Our Commitment

Our role as a fiduciary is the foundation of BlackRock’s culture. …

We invest on your behalf, not our own. …

While the low-carbon transition is well underway, the technological and economic realities mean that the transition will take decades. Global economic development, particularly in emerging markets, will continue to rely on hydrocarbons for a number of years. As a result, the portfolios we manage will continue to hold exposures to the hydrocarbon economy as the transition advances.

A successful low-carbon transition will require a coordinated, international response from governments aligned with the goals of the Paris Agreement, including the adoption of carbon pricing globally, which we continue to endorse. …

The steps we are taking today will help strengthen our ability to serve you as a fiduciary. Sustainability is becoming increasingly material to investment outcomes. …

Basically, the world’s largest investor, BlackRock (manager of about $7 trillion in funds), is predicting that as the 90%+ consensus of climate scientists increasingly impacts the relative prices of renewable as compared to non-renewable energy-sources, the “ESG” premium on the renewable (such as solar, wind, etc.) will inevitably cause the non-renewable (coal, oil, and gas) energy-sources to need to become ever-cheaper in order to remain competitive — and this will drive down the values of stocks in the non-renewable category, and drive up the values of stocks in the renewable category.

These two letters are saying that this will be evident “In the near future – and sooner than most anticipate,” but “the technological and economic realities mean that the transition will take decades.”  There is an obvious tension between those two assertions. The “In the near future – and sooner than most anticipate,” is addressed to “CEOs,” but the “the technological and economic realities mean that the transition will take decades” is addressed to “Clients” — BlackRock’s customers, mainly the world’s billionaires and centi-millionaires, but also the investment-managers for large organizations. The “Clients” naturally have a preference for low perceived risk in their investments; and BlackRock is, in that letter, providing its clients the sense that there will be no earthquake to their investments. If one happens, BlackRock will be able to say to its clients, “We told you that this is coming, but it came faster than we and our competitors expected,” and they’ll be right about that. As regards the letter to “CEOs,” it’s telling them to transition as fast as is reasonably possible out of fossil-fuel investments and into renewable-fuel ones, in order to become less vulnerable to the shock, when it does hit. This makes good sense: keeping the clients comfortable, while telling the CEOs: “Make major moves on this ASAP!”

—————

Investigative historian Eric Zuesse is the author, most recently, of  They’re Not Even Close: The Democratic vs. Republican Economic Records, 1910-2010, and of  CHRIST’S VENTRILOQUISTS: The Event that Created Christianity.

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John Doran
John Doran
January 18, 2020

Slight problem with this scenario: the whole man-made CO2 caused global warming/climate change fraud is just that, a fraud. Climatologist Dr. Tim Ball exposes this in only 121 pages, in his great little handbook for the layman: Human Caused Global Warming The Biggest Deception In History The science & scandals, the politics & profiteers. The lot. Dr. Tim identifies The Rockefeller banksters & the Soros gangster as among the chief pushers of the fraud, along with other multi-billionaire cronies. Dr. Tim identifies Naomi Oreskes & John Cook as among the liars who concocted the 97% consensus lies. If he were… Read more »

oldandjaded
Reply to  John Doran
January 18, 2020

This thread is just clickbait, unfortunately there is more and more of that on the Duran lately. Back in July, the BC Supreme Court found in favour of Ball, in the libel suit climate fraudster Michael Mann brought against him. Ball used the “truth defence” and his legal council challenged Mann to provide the court with supporting evidence for his fraudulent “hockey stick” graph, Mann was completely unable to provide any supporting empirical evidence whatsoever, and the Judge ruled against Mann “with prejudice”. So the “court” of mass media says “the science is settled” the legal system says something entirely… Read more »

Brian Gray
Brian Gray
Reply to  oldandjaded
January 18, 2020

Clickbait?!? Green fascism is now openly promoted… Mark Carney’s pronouncements at Jackson Hole and then complimentary to the little climate munchkin’s rant at the UN last summer laid all this de-industrialization and de-population strategy out … there’s a gigantic problem not only given the fact that the co2 crap is just that, a bunch of idiotic crap… but, and it’s a big but, China and Russia and other sane nations around the world are committed to a new paradigm of global peace thru global development typified by the BRI and the EAEU and the credit mechanisms available thru the BRICS… Read more »

oldandjaded
Reply to  Brian Gray
January 18, 2020

I agree 100% with Brian Gray. Realistically, the jury is in on the c02 driven global warming narrative, only the ideologically committed, and those that still take a knee to mainstream media believe this horseshit.
For the rational free thinker, the WikiLeaks 2009 University of East Anglia “climategate” leaks were game, set and match. Beyond that point, it was just a matter of following the money and connecting the dots.
Of course, every climate ideologue I have ever encountered refuses to read them.

ian seed
ian seed
Reply to  Brian Gray
January 20, 2020

“munchkin’s rant ”

LOL I love it.

Also kicking myself that I didn’t think of it myself, but never mind. I’ll be using a lot from now on. Thanks Brian 🙂

Donald
Donald
Reply to  John Doran
January 19, 2020

Also some good videos from Tony Heller, funny and sad at the same time.

Vera Gottlieb
Vera Gottlieb
Reply to  John Doran
January 19, 2020

I think there is a slight problem with you…trolling for the fossil fuel industry.

oldandjaded
Reply to  Vera Gottlieb
January 19, 2020

When you look at the funding available for trolling “for” the climate change industry vs the money that THE CLIMATE CHANGE INDUSTRY CLAIMS is available for shilling against the C02 driven climate change narrative , only a complete fool would troll or shill against C02 driven climate change . The funding on the climate change side is 100 fold larger. Thats based on the figures the climate change side claims, in actual fact, the imbalance is probably a thousand fold. The fact is, the fossil fuel industry funds the climate change side of the argument, and has almost since the… Read more »

oldandjaded
January 18, 2020

Actually, we are viewing this in an ideological context which is the wrong way to look at it. The piece that Eric is quoting doesn’t even remotely touch on whether or not C02 driven global warming is real, that’s not at all the point of the letter Blackrock has sent out. What the letter is saying is effectively “we have successfully sold this bill of goods to the proles, the majority believe it, and its time to fleece the herd.” That’s a reasonably accurate assessment.

oldandjaded
Reply to  oldandjaded
January 19, 2020

“Ride, ride, ride the wild surf
Gotta take that one last ride
Lined up and waiting for that next big set outside
Nothing can stop it ’cause you’ve just gotta ride, ride, ride, ride, ride
The heavies at the pipeline are okay
But they can’t match the savage surf at Waimea Bay
It takes a lot of skill and courage unknown
To catch the last wave and ride it in alone”
Jan & Dean

So much more poetic than just saying “Pump and dump”. LOL!

oldandjaded
January 19, 2020

If you read a lot, what becomes really un-nerving is how almost EVERYTHING at some point comes back around and touches the OSS and operation Paperclip. Elaine Dewar outlines this in her outstanding book, “Cloak of Green” she just mentions this in passing, but one of her earliest contacts in the movement was an anthropologist named Dr. Darrell Posey. His direct ancestral line has ties to the CIA and US military all through it, going back 9 generations to General Thomas Posey, who was an aide-de-camp to George Washington, and was rumoured to be Washington’s illegitimate son. Another Tom Posey… Read more »

oldandjaded
Reply to  oldandjaded
January 19, 2020

“Mr. Wenner Gren, who had also formed the Wenner-Gren Geophysics Fund” At the risk of being “obvious man” We all know what “geophysics” means, right? Yup, oil exploration. You find this linkage ALL THROUGH the earliest “climate change” funders. Maurice Strong, who served as a commissioner of the World Commission on Environment and Development, first executive director of the United Nations Environment Programme, and honorary chairman of the Peking Universities Environmental Foundation, was ceo of the Canadian government oil Corporation, Petro-Canada, and was President of “Power-Corp” aka, Ontario Hydro, and was a political courtier of Peter Bronfman of the Seagrams… Read more »

oldandjaded
January 19, 2020

ok, just to nail the lid on this coffin down tight. Some may attempt to suggest that the fact that Maurice Strong, Prince Bernhard and David Rockefeller were putting up all this funding was because they had had some sort of “epiphany” and had “seen the error of their ways”, that all this was some sort of “act of penance”. At the SAME TIME that Maurice Strong was delivering a Luciferian prayer to kick off the Rio Earth Summit, former Prime Minister, Brian Mulroney was in China, at HIS behest, doing a multi-billion dollar deal on behalf of Power-Corp, to… Read more »

John Doran
John Doran
January 19, 2020

Dr. Tim Ball identifies the motives of the 1%s banksters, their multi-billionaire cronies & their political lunatics pushing the warming/climate fraud as: depopulation, deindustrialisation & a world totalitarian govt. The depopulation will be as much as 95% if freakos like Ted Turner get their way. The plotters reveal themselves : http://www.c3headline.com Click on quotes. Over 100 million lives have been taken by the depopulation agenda already since the US EPA “banned” DDT in June 1972. These were mostly women & children in the 3rd world who died the dreadful death by malaria. These 1%s people are sick & evil. Read… Read more »

Vera Gottlieb
Vera Gottlieb
January 19, 2020

And the likes of BlackRock coming to our rescue??? Really?

oldandjaded
Reply to  Vera Gottlieb
January 19, 2020

People that follow the financial industry will remember this story. https://www.nytimes.com/2017/03/28/business/dealbook/blackrock-actively-managed-funds-computer-models.html How does this tie in to the subject at hand? The principle thrust behind the C02 driven climate change narrative, as hinted at, is population control. The drive behind it is eugenics and Malthusianism. How many proles will the elites need to slave in the metaphorical salt mines post singularity? Ray Kurzweil ( the NWO’s AI golden boy of choice) openly states that he sees AI and transhumanism as the path to immortality. The elite view themselves as a separate race of Gods. Theres another thread on here where… Read more »

Donald
Donald
January 19, 2020

“A Fundamental Reshaping of Finance” ? Well they aren’t “reshaping” just yet, because a very cursory examination of iShares ETFs which are managed by BlackRock Asset Management contain the following equities: Exxon Mobil Corp (XOM), BP PLC (BP.:LSE), Royal Dutch Shell PLC (RDSA:LSE) and Russian Lukoil PAO (LKOH:MCX). Source: “etfdb.com”

oldandjaded
Reply to  Donald
January 19, 2020

No WAY!!! But, but, but…. ROFL! Committing to an ideology can completely KILL cognitive thought in even the most intelligent people. Cognitive dissonance, in combination with a healthy dose of ego, self-rightousness and narcissism, is the kiss of death to reason. I keep posting this Hoffman quote, because its so dead on the money. It never fails to garner a bunch of downvotes, hopefully, every time I post it, at least a few read it, and experience an epiphany. “Flattery: The First Principle of Mind Control Why then does he revere them? Because they flatter him. This is the first… Read more »

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