5/20/2023 0 Comments Iron money fink dialArguably, it may become harder to monitor. Will the world be greener? Also, possibly not, if the pit is sold to owners out of the public eye. If a large investment fund divests a stock or bond, or pressures companies into selling out of coal projects, what next? BlackRock investors may feel better, but will global production reduce overall? Quite possibly not. That’s firstly because of the haven offered by private markets. The bigger problem is that while such moves are necessary, they aren’t sufficient. Yet those amount to only under a third of the money it manages. BlackRock’s aim to divest thermal coal equity and debt will apply to its actively managed funds. The surge of inflows into the firm’s environmentally friendly funds last week will encourage that view. Heat from activists, like the BlackRock’s Big Problem campaign, helped, but Fink argues he is making sustainability the new standard because it makes financial sense. That’s encouraging, as such initiatives tend to outlast moral outrage. Cutting off funds for coal producers and driving up their cost of capital is key to suffocating a sector that is the single largest cause of increased global temperatures.īlackRock’s strategic shift is also driven by self-interest. BlackRock is an investment giant, with $7.4 trillion of assets under management, so Fink’s call to arms last week marks a significant move. Their fleet is young, still growing and often state-backed Western money managers selling out of public securities won’t change that. To blame are the likes of China, India and Vietnam. ![]() Analysts at UBS Group AG estimated last July that on current trends the last coal-fired power station may close only in 2079. ![]() That suggests that even if global appetite peaks soon, as most analysts estimate, it could well remain at high levels for years to come. Yet in Asia, once you iron out some local peculiarities, demand for the black stuff remains remarkably resilient. in the past year or so, thanks to cheap natural gas, higher carbon prices and green pressure. If BlackRock CEO Larry Fink is serious about helping to eliminate coal while reshaping finance, his outfit can use its holdings of sovereign debt to tackle governments, too.Ĭoal power generation has fallen steeply in Europe and the U.S. Unfortunately, it only scratches the surface. (Bloomberg Opinion) - BlackRock Inc., the world’s largest asset manager, says it will cut exposure to companies linked to thermal coal, among other climate-friendly measures.
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