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On Divestment

When that thing that people may be afraid might happen is already happening, only change the ‘thing’ to ‘investing in dirty energy’ and the fear to ‘you can still make money on your money if you stop.’ The world’s largest investment house reports on tomorrow, today – pulling your money out of fossil fuels already turns a profit:

In places, BlackRock’s findings are redacted, so as not to show the size of particular holdings, but the conclusions are clear: after examining “divestment actions by hundreds of funds worldwide,” the BlackRock analysts concluded that the portfolios “experienced no negative financial impacts from divesting from fossil fuels. In fact, they found evidence of modest improvement in fund return.” The report’s executive summary states that “no investors found negative performance from divestment; rather, neutral to positive results.” In the conclusion to the report, the BlackRock team used a phrase beloved by investors: divested portfolios “outperformed their benchmarks.”

In a statement, the investment firm downplayed that language, saying, “BlackRock did not make a recommendation for TRS to divest from fossil fuel reserves. The research was meant to help TRS determine a path forward to meet their stated divestment goals.” But Tom Sanzillo—I.E.E.F.A.’s director of financial analysis, and a former New York State first deputy comptroller who oversaw a hundred-and-fifty-billion-dollar pension fund—said in an interview that BlackRock’s findings were clear. “Any investment fund looking to protect itself against losses from coal, oil, and gas companies now has the largest investment house in the world showing them why, how, and when to protect themselves, the economy, and the planet.” In short, the financial debate about divestment is as settled as the ethical one—you shouldn’t try to profit off the end of the world and, in any event, you won’t.

If the ‘masters of the Universe’ are already running for cover, the debate basically devolves to ‘you’re not the boss of me.’ Rising tides and disappearing oysters beg to differ.

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Making money from the Greening

We’re mostly still just trying to do that, as if there’s a first, as if THAT’s the opportunity:

Sustainable investing is one of the hottest trends on Wall Street. Trillions of dollars are rushing in as consulting firms and private foundations spread the gospel. But no one is entirely sure what ESG is beyond the literal (environmental, social and governance) or exactly how to define it. Metrics are self-reported and often hard to measure, tracking everything from carbon emissions to boardroom diversity. Greenwashing is a perennial concern.

Profits, however, are very much measurable. Bloomberg’s fourth annual ranking found that the biggest ESG funds are beating the market. If you do happen to have $1 million to spare and a soft spot for the future of planet Earth, here are some investment ideas for you. How does the intersection of AI, blockchain and climate sound?

We also reported this week on emerging technology such as carbon capture, and less environmentally damaging rocket launches. While not as sexy as spaceships, dirt is also important to the future health of the planet. Global agriculture has come to rely on annual crops and heavy fertilizer use, which inhibit soil’s ability to sequester carbon. 

So we’ll call it ESG or whatever, and we do. Predictions about how this will affect THAT, about where to place your future-of-energy bets is till going to lead to many near-term flareups and dead-ends. Reckoning with the ultimate dead-end may not be appealing, prospectus-wise, but acknowledging that we’re doing it anyway, that doing it the old way got us right to here, is the thing we will always still need to do until we do it.

Waiting. Adaptability Funds are going to scare the investor class for about one-half of a news cycle.

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100 Years

So… the Earth is headed for 6C of warming.

Emissions rose by 29% between 2000 and 2008, says the Global Carbon Project.

All of that growth came in developing countries, but a quarter of it came through production of goods for consumption in industrialised nations.

The study comes against a backdrop of mixed messages on the chances of a new deal at next month’s UN climate summit.

According to lead scientist Corinne Le Quere, the new findings should add urgency to the political discussions.

“Based on our knowledge of recent trends and the time it takes to change energy infrastructure, I think that the Copenhagen conference next month is our last chance to stabilise at 2C in a smooth and organised way,” she told BBC News.

But don’t worry about all those nasty emissions that will have led to the increase, or the fact that they are from carbon-based fuels sources,which are finite, because we’ve got a 100-year supply of natural gas to rely on!

I saw the ad last night, and it’s pure amazing with an extra dose of stupid. There’s got to be a link somewhere. But just watch football on Thursday – you’ll see it. The Natural Gas coalition or whatever is really proud of themselves. We’re saved! The mother is telling her baby daughter not to worry, because we’ve got 100 years’ worth of natural gas to burn! The amazing unasked question, about her baby’s children and their children… oh yeah: screw them.