The finance sector is disconnected from climate reality

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Here’s an excerpt from this newsletter by Sasja Beslik:

Towards the end of the second day, a person in audience asked the former consultant to Shell who went public on deceptions and lies by company in relation to climate change why it is so hard. Her answer: “When I listen to people from the finance sector talk about climate change, there is this disconnect with reality.”

Yes, that’s it. ESG financial executives don’t live in the Nigerian delta or in Bangladesh. They have a limited emotional relationship to pain caused by your house being flooded, blown away by storm or destroyed by landslide caused by melting ice. And when shit hits the fan, so to speak, we just buy a business ticket out. So, all in all, business it is and as usual it is.

I don’t know if people participating in the conference have missed this report or if findings where to “rude” for an such an eloquent audience. The Renewables 2022 Global Status Report says the share of wind and solar in the global energy mix has risen minimally in the last decade. While renewables boomed in the electricity sector last year, they didn’t meet the overall rise in demand. In transport, which accounts for a third of energy, renewables provided less than 4% globally.

And did they really take in the reality of the deadly heatwaves we see in Europe again this summer? The one right now is the earliest heatwave in 40 years, and the World Meteorological Organization warned Friday that this heat wave is a preview of the future, as heat waves are starting earlier in the year and are becoming more frequent and severe as a result of human-caused climate change.

Panic is the right mode for this. Pure and shear panic. From 2018 to 2020, ESG assets under management grew from $22.8 trillion to $35 trillion, with estimates that they will make up a third ($53 trillion) of all assets under management by 2025. And we have achieved. Nothing.

ESG has become a punching bag for the far right, for disgruntled corporate executives and even industry insiders. But there’s one group whose growing disapproval might be the ultimate game changer. Retail investors are slowly starting to look under the hood of the $40 trillion ESG industry that’s increasingly steering their savings, and many aren’t liking what they see. What’s more, some of the biggest names in finance have been tainted by greenwashing allegations, with Goldman Sachs Asset Management and the investment arm of Deutsche Bank AG among the most prominent.