Major Pension Fund Pulls $14 Billion from BlackRock Over Its Abandonment of ESG

And the actual market that investors who plan 10, 20, 30-plus years into the future has climate change as an intrinsic part of their risk models. This is a core part of finance right now, I even took a sustainable investing class and learned a lot about things like the economics around sustainable aviation fuel (a term that is a bit of an oxymoron). Climate change is at the heart of the existential struggle between an actual forward-looking market among serious fund managers collectively overseeing trillions in assets and a stock market filled with moonbois and options gamblers always betting on tomorrow’s move.

Climate change will erase $38 trillion from global GDP every year by 2050. It will wipe out $1.5 trillion of U.S. residential property value in 30 years. Buying a home with a mortgage may become a relic of the past in a climate change-scarred world where home insurance is becoming harder to get. You are a fundamentally irresponsible long-term investor if you are not pricing climate change impacts into your financial models. You’re no different than the dumbfuck moonbois buying Trump’s meme coin hoping that number go up.

And now there’s real teeth to this assertion, as America’s gilded capitalists happily conceding to Trump’s brand of slapdick fascism while negging Ray Dalio to say something have more than just the hippies like me to deal with. European pension funds are a big, big game. The European Central Bank values all euro area pension funds’ assets at $4.08 trillion. There are very few businesses on this planet with the kind of size that can get BlackRock’s $10 trillion assets under management’s attention, and European pension funds are one of them. Florida really thought they were doing something pulling $2 billion from BlackRock in 2022 over Ron Desantis’ insistence that his state is not being swallowed up by the ocean, but the Dutch are proving how social democracy can pack a much bigger financial punch when we all pool our resources together.

“Dilemma on Wall Street: Short-Term Gain or Climate Benefit?” wrote the New York Times last year. “How markets address climate risk” is the title of sponsored content published the Wall Street Journal. “When the weather turns risky: how climate change became a central concern for global finance,” wrote World Economic Magazine this year. The Institute and Faculty of Actuaries at the University of Exeter published a detailed report outlining how institutions are failing to properly model the risks associated with temperature rises and will suffer large financial losses because of it. This is happening whether the reality deniers on the right want to accept it or not, and the most powerful financial institutions on the globe are derelict in the basic duties I was taught in my 101 classes if they are following Trump’s diktats to abandon their ESG standards.

Risk is finance. It’s the whole ballgame. No other number means anything without understanding and calculating the risk you are taking first. You are not beating the S&P 500 by buying the S&P 600, you are playing a different game with more downside and more upside. Finance is now being forced to play a new game thanks to governments around the world failing to stop the companies warming the planet that these fund managers are investing in, and it has trillion-dollar implications for the entire industry. If BlackRock wants to invest in an insurance company, climate risk is going to be a central part of their financial modeling assessing whether they should do that, given that insurance is increasingly hard to come by in areas of the country more threatened by climate change, and in some parts of America, taxes and insurance are more expensive than a mortgage. “Insurance leaders have unequivocally stated that if climate change raises average temperatures to 4˚C above pre-industrial levels most assets will be uninsurable,” wrote the University of Exeter.

Climate change and finance is where the right-wing really loses all control over their shortsighted narrative that in reality, just amounts to a smash and grab operation for America’s most deranged billionaires. They position themselves as the Very Serious economy knowers, despite the fact that a recession has unfolded under the watch of the last seven Republican presidents going back to the Eisenhower Recession in 1958, and climate is just another chapter in the fraudulent financial book they have written the last near-century. Republicans have proven time and time again that they know less than nothing about economics, and their complete and utter dismissal of climate risk is a slap in the face to the VaR models that run the world they pretend to understand. Investment firms are going to have to seriously model climate risk into their strategies the way that PFZW has, or they are going to continue to lose a lot of money in climate catastrophes as America’s crumbling insurance industry is currently grappling with. Republicans would much prefer they do the latter, calling into question how well-thought out this plot to install an autocracy in America really is.