The 50th annual World Economic Forum in Davos, Switzerland, kicked off on Tuesday with a pair of speeches that almost certainly made the thousands of corporate heads and thought leaders in attendance wince, albeit for different reasons.
The first of them was from 17-year-old Swedish climate activist Greta Thunberg, who (just as she did last year) sternly rebuked attendees for their continued support of a fossil fuel economy that she says is imperiling her generation and all to come after it. “I wonder,” she said, “what will you tell your children was the reason to fail and leave them facing the climate chaos you knowingly brought upon them?” For organizers who desperately want Davos to be seen as more than an exclusive networking event for the world’s elites—and who have made climate change a focal point of this year’s forum in order to illustrate their commitment to addressing real-world issues—Thunberg’s words of reproach must have stung.
Then came President Donald Trump’s address, a self-congratulatory monologue that attempted to recast climate denialism as economic optimism and climate activists as enemies of progress. “[To] embrace the possibilities of tomorrow, we must reject the perennial prophets of doom and their predictions of the apocalypse,” he said. “They are the heirs of yesterday’s foolish fortune-tellers. And I have them, and you have them, and we all have them. And they want to see us do badly, but we don’t let that happen.” Coming on the heels of Thunberg’s blistering speech, Trump’s implicit message—It’s us against them, am I right? The rich and powerful versus all those annoying do-gooders who just want to see us fail—couldn’t have been well received by an audience that’s hoping to burnish its humanitarian credentials and refurbish its image.
Whether they were being reprimanded by a teenager for not doing enough or being encouraged by an American president to do even less, the VIPs in Davos were definitely squirming in their leather club chairs this week. And you know what? That’s OK. In fact, many attendees of the 50th World Economic Forum may even be quietly welcoming the opportunity to step up and show the world that they’re finally taking climate change seriously enough to make decarbonization central to their investment strategies and business plans. If so, they would be taking part in a long-overdue cultural shift that has recently seen corporations and institutional investors recognizing their own power—and their own awesome responsibility—to catalyze our transition to a clean-energy future.
Last week, as he and other business elites were fueling up their private jets to whisk them off to a conference in the Alps with the theme“Stakeholders for a Cohesive and Sustainable World,” the biggest money manager on the planet was also fueling talk about a “watershed moment in climate history.” In a recent letter addressed to his fellow corporate heads, Larry Fink, chairman and CEO of asset management firm BlackRock (current holdings: just over $7 trillion), identified climate change as “a defining factor in companies’ long-term prospects” and predicted that it would—and should—lead to “a fundamental reshaping of finance.”
Acknowledging that “climate risk is investment risk,” Fink cited his fiduciary duty to clients in announcing that BlackRock would be doing its part to minimize this risk by placing sustainability “at the center” of its business model. Toward this end, he wrote, the company would be “exiting investments that present a high sustainability-related risk, such as thermal coal producers,” and “launching new investment products that screen fossil fuels,” among other initiatives. Writing in The New Yorker, journalist and climate activist Bill McKibben took the announcement with a large grain of I’ll-believe-it-when-I-see-it salt. But McKibben did note that BlackRock’s godlike stature within the financial universe ensures that Fink’s declaration will have a major impact—and he even quoted one energy analyst who said Fink’s move spelled “the beginning of the end for the fossil-fuel system.”
That may well be an overstatement. But it’s not hyperbole to observe that the corporate world, generally speaking, has decided to stop treating climate change as a controversial topic to be sidestepped and to start treating it as a social, economic, and geophysical reality to be dealt with. The multinational consulting giant Deloitte recently surveyed more than 2,000 top executives in 19 countries to find out how their companies were balancing traditional corporate mandates—e.g., maximizing profits and shareholder value—with newer, socially driven ones, including the mandate to be better stewards of the environment. Nearly 90 percent of those surveyed said that they expect climate change to negatively impact their businesses. Roughly the same percentage said their companies had sustainability initiatives either already in place or in the works.
More important, half of these execs said that they believe tackling climate change is their generation’s top priority. That’s way too low a percentage—it should be twice that—but it still works as a forceful rebuttal of one of climate deniers’ favorite talking points: that large-scale climate action is somehow intrinsically anti-capitalist and will inevitably lead to the collapse of not only individual businesses, or even business sectors, but entire economies. Anyone still clinging to this outmoded, fear-based theory would benefit from spending a few minutes learning about groups like Climate Action 100+, a consortium of more than 370 institutional investors (with combined assets of over $35 trillion) that’s committed to engaging the companies within its collective portfolio to curb emissions, improve governance, and strengthen climate-related financial disclosures, all toward the goal of helping governments reach their Paris climate agreement targets.
On Thursday afternoon, as the big show in Davos was beginning to wind down, U.S. Treasury Secretary Steven Mnuchin was asked about Greta Thunberg’s call for governments and industries to show their commitment to fighting climate change by divesting from fossil fuels. His response was breathtaking in its pettiness. “Is she the chief economist, or who is she? I’m confused,” he replied. “It’s a joke. After she goes and studies economics in college she can come back and explain that to us.”
Mnuchin may sincerely believe that the “us” in that last sentence encompasses the majority of business leaders, institutional investors, and economists. It doesn’t. Those people, by and large, are respectfully listening to the Greta Thunbergs of the world—not mocking them. The apposite pronoun, in this instance, is “me.” He’s the one who doesn’t understand.
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