> Will BlackRock’s decision to send a strongly worded letter about environmental sustainability reshape how corporate America does business? Well, I remember two years ago when Larry Fink sent a strongly worded letter about how companies needed to make society better, and that too was supposedly “likely to cause a firestorm in the corner offices of companies everywhere,” and now, uh, same society really.
> Now BlackRock will send a strongly worded letter to CEOs about the environment. It will arrive on the desk of the CEO of, I don’t know, giant state-owned oil company Saudi Aramco? A company where, according to Bloomberg data, BlackRock is the largest outside shareholder. A company that did a bond offering last year—after the Saudi government murdered and dismembered Jamal Khashoggi, after Fink sent that letter about making society better—in which BlackRock was also a big investor. “We wanted the Aramco bond to be much bigger,” Fink said, way back in April, when his public-relations goal was to butter up Saudi Arabia. Now it is January, and his public-relations goal is to butter up environmentalists, so BlackRock “will make investment decisions with environmental sustainability as a core goal.” Next time a big oil company is looking for money, presumably that will change again.
> I could keep being cynical about this all day.
BlackRock is a very simple business to understand. First, they only investment money on behalf of their clients and they take investment fees for making decisions on behalf of their clients (investing their money).
They break the business in to two parts:
Alpha: old school mutual funds, new school quant funds, real estate etc. Anything where managers get paid big bucks to make investment decisions on behalf of clients.
Beta: passive investment vehicles that blackrock tries to deliver for the lowest price with lowest tracking error (i.e. deliver as close to what the index returns as possible).
What BlackRock is doing here, is a VERY, VERY big deal. They are allowing clients to now pick passive investment strategies which exclude coal or other businesses that people find morally objectionable. What that means is that if you care about the environment you can move your money to these new passive investments. As more and more people do it, it will decrease demand for equity in those companies and increase their cost of capital.
On the active side, they already had that feature, and many of their clients already ask BlackRock to exclude investments from their active portfolios and were willing to accept less return. (BlackRock has offered that for a very long time).
I find very few things interesting that asset managers do, but I am going to look at all my passive investments and try to get them moved over. I bet passive funds without coal etc. will outperform while more and more people move money from vanilla S&P500 to S&P500 without coal.
Eventually those coal companies may fall out of indexes all together which will really increase their cost of capital.
Brilliant move by Fink, and I applaud it.
I thought I would do a ballpark check. Random first index of oil & gas I found was FTSE 350 Oil & Gas. Start 2010 value: ~7914. Start 2020: ~8253. Return: 1.043. General FTSE350 at the start of 2010: 2718. Start 2020: 4311. Return: 1.59. So we'd have done better buying a fossil fuel divested index 10 years ago. I see no reason to think this trend will reverse.
The fundamentals to me are that fossil fuels are likely only see more regulation, divestment and less importance to new technologies. While the upside wildcards in energy are most likely not in fossil fuels.
Time will tell.
There are some specialized ETFs like KRMA, but I don't know anything that has environmental criteria that also follows the total market or some large cap index.
You could buy individual symbols (on top of an ESG ETF/fund vehicle) to get exposure to nuclear if you absolutely had your heart set on it. I would not recommend doing so.
Show me one large company that doesn't do environmental damage?
What does this mean?
If you don't know it, don't try it. You are playing with money, you don't have.
This seems to contradict your expectation that "passive funds without coal etc. will outperform". If the cost of capital for coal companies is higher then the return for investors in those companies is also higher.
i.e. People doing the right thing for the wrong reasons is just fine. The right thing ends up being done.
 for some value of 'long'...
It's not laudable though.
I understand the desire to dig into intentions here but we're not losing if we invest less in coal.
I'd like to know what is the point of giving investors a pat on the back for engaging in selfish behavior? It's like thanking a full tiger for not eating you.
Isn't it exactly the opposite? If capital for oil becomes more expensive, it means the producers need to pay more for it. Thus being an investor on them is more profitable.
I remember a long time ago reading an article on how Vice stocks do well precisely because of this effect, but I don't know if it resisted time.
In the end, if oil stocks give a higher profit, then supposedly rational actors will compensate the objectors behavior by allocating more of their portfolio to oil, making the effect neutral, but more people exert their own preferences.
There are two main ways of changing a sailing boat's direction. I wont discuss them (its complicated) but tack and gybe are the keywords.
I don't think this would be new in the world of index funds, but it also seems like not what is being reported. According to the link active funds are having coal removed, and the rest is breathless speculation.
If I had to guess, Chevron, Exxon and Aramco doesn't have too many problems with cost of capital. All you're doing is making them cheaper for people like me who don't invest based on moral posturing.
Slide your money over into that sinking ship, and right along with your whole cohort, we'll watch those businesses fall out of favor or even run out of capital completely, and we won't feel a thing for your losses. Not this week, not this month, not this year, but soon enough.
I don't even care if the door hits you in the a on the way out.
Also, to preempt some criticism: I'm not saying AGW isn't real. I'm saying we won't stop using fossil fuels despite AGW because there is no other way to maintain our populations and living standards at such high levels, at least without a complete overhaul of the entire economy (everything depends on oil and gas in our globalized world).
If ten years from now, a much healthier Exxon is a part of the non-fossil economy, so much the better.
Thank you for your service.
Maybe at some point y'awl will realize how nitrogen fixing works in current year (aka "Haber-Bosch process"), and where food comes from. Also good luck convincing the developing world to forgo a hydrocarbon economy.
However, in terms of capital available to a company, often a company needs enthusiastic investors (Uhm... WeWork anybody?) that generate funds for large capital expenses.
Since you worked at BlackRock, I'll take your word for it that the former will not take preference over the latter. I'm too young to have money to invest and don't know enough about the nuances for big time issuer companies to know the exact impact of Fink's  move.
 The CEO of BlackRock https://en.wikipedia.org/wiki/Laurence_D._Fink
And what will happen if those investments fail?
> The right model of BlackRock is probably that it is mostly an aggregator of preferences, but it is also, at the margin, a shaper of preferences. It passively reflects what investors want generally, but it has some ability to push those investors to want different things. There are other things that BlackRock does—it votes the shares of stock that it owns on behalf of investors, it meets with managers to talk about their sustainability plans, it writes strongly worded letters to CEOs—but I suspect that they’re mostly less important than the basic core function of taking $7 trillion from investors, channeling it where the investors want it to go, and slowly and subtly diverting those channels so that the money moves more in the direction that BlackRock wants it to go.
> This is an unavoidably uncomfortable role. If you want BlackRock to do more on climate change, you will be annoyed that it mostly offers broad passive products that buy all the stocks, including the ones you don’t like. If you want BlackRock to do less on climate change, you will be annoyed that it is pushing its clients into sustainability-focused funds rather than neutrally giving them all the stocks, including the ones BlackRock doesn’t like. Mostly it is an uncomfortably powerful role: BlackRock really is a general aggregator of preferences, so it speaks with the authority of its $7 trillion and its universal ownership, which means that its ability to shape those preferences matters.
And if you are wondering if the BlackRock head is right, do a google search on "fossil fuels stranded assets"
On the topic of executives needing to improve society, Fink here was important in the creation of the MBS market.
The 2008 crisis happened because MBSs became a bubble - investors stopped performing diligence (and risk models were crappy), so securitizers started packaging up crap, underwriting standards dropped, etc.
We are responsible for 37% of global coal exports. That's massive. If we halt coal exports it would put a squeeze on the coal supply and that raise prices; probably significantly. Coal power plants are already on thin margins. If cost of coal increased for a sustained period (a few years) coal would be considered unviable as a fuel source. We should see a lot of the plants close down.
Australia always talks about its self as being insignificant and anything we could do to help prevent climate change would have no measurable impact. This incorrect relatively and absolutely, we are one of the largest per capita emitters. But we are also the third largest exporter of fossil fuels.
This is Australia's opportunity to actually do something significant to help address climate change.
45B is still a lot of money to remove from the economy. It's less than I would have predicted (mining is only 5.8% of economy), but it's still a non-trivial amount. And 45B gets you a lot of lobbyists.
Economics is dismal. 45B evaporates very quickly when you (sorry) drill down.
>because the companies have massive tax holidays and find ways to legally avoid the upside.
Another thing to note is that quite often the way companies legal avoid taxes is by investing that money instead of taking out profits. That's still beneficial for Australia. The world doesn't only revolve around how much people pay income taxes.
Invest meaning purchase Australian Goods and services, and invest in Australian enterprises. Well.. Labour hire aside, there aren't many heavy machinery manufacturers onshore, and there are cost issues in sourcing construction materials fabricated onshore. The least-cost tender tends to favour Chinese and Indian sourced goods and materials, even if made with Australian steel they don't always come from domestic sources. The shareholdings are a mixture of Australian and International and there is a huge upside in shareholder benefit which includes pension funds and state investment funds, no denying that.
Yes, but they also seek tax holidays for sunk costs, and then seek co-funding for investment costs, so they avoid the cost of actually having to build the ports and railway lines, but get a tax holiday on the investment made: the state government has to pick up the difference. Investments are valuable for australia in the longer term, but have to be offset against longer term downside costs, like remediation of the minesite which has historically been avoided, or damage to the water table, or the groundwater, or the effect on local property prices which disadvantages local residents not engaged in mining, or the downside effect on tourism from damage to the environment..
Nothing is simple. if I over-state the evaporation of the $45B, then the positives of the $45B have been equally if not more so overstated. Much of the money is fictive, never actively enters the economy, and instead "enhances shareholder value" at the expense of actual, incurred real-world costs in the state.
Mines make money: they also incur costs. Who bears the costs is not the same as who makes the money.
The Iraqi who saved Norway from oil
A small handful of union backed Australians get paid ridiculous amounts for relatively easy work and those unions kick up a massive fuss whenever discussions of shutting down the industry come up.
Thermal coal adds little tangible value to the lives of everyday Australians.
It’s also doing a great job of ruining agriculture, tourism, water catchments and the natural environment.
For some reason though, it's always lumped in with thermal coal by protesters and so-called environmental activists.
Also, you are massively kidding yourself if you think that Thermal Coal doesn't affect your everyday life in Australia. Enjoy no power and a collapsed grid if you remove most of the baseload power in the grid. The energy sector is forecasting an energy shortage in NSW and Vic due to them prematurely closing coal plants without adequately replacing that capacity.
South Australia may be "net green" or close-to if you are to believe headlines, but it would collapse instantly without the baseload of Victoria stabilising its grid and supplying power when required (and Vic later accepting power and lowering its coal output for the close to free useless power).
There is close to 0% chance that QLD alone will be able to supply the missing power that NSW and Vic will require.
Think about how much sun covers Australia and you're telling me there isn't enough sun? What about wind, uranium and gas? Look to the stars my friend.
To your point about the ratio of thermal to coking coal. What's your point? So Australia stops exporting thermal coal, and increases taxes on coking coal to pay for the transition to a renewable grid and support coal miners while they find other work in renewables (which they should've done 20 years ago). There's no problem with that plan.
And that is just in Australia. The customers of our coal markets will lose out as we unilaterally try to cut them off from the raw resources they need. That is probably a cost you are willing to bear, but it is still a problem.
There's also a massive backlog of green power efforts to connect to the grid, because the grid is badly designed. It was designed to take power directly from coal stations to cities, it wasn't designed to be an effective or efficient network.
Saying we need coal because we haven't upgraded the grid to meet modern demands is like saying someone with a broken arm needs a sling. It is true, but it isn't permanent, and the goal should be to get rid of it or you'll hurt yourself more in the long run.
We still don't have answers for relay desensitization and ferroresonance in particular.
The bigger renewable producing projects pose less problems, but still don't replace baseload in the grid or serve to stabilise the grid. They can only follow the grid within a given tolerance.
The worst part is that the powers that be are likely to ignore all of the above and roll out anyway. The grid will have already been syncronized by the things they turn off and things will for the most part roll along fine (service disruptions just becoming a part of daily life)... until something happens that requires a grid restart (think along the lines of a cyber attack or a natural disaster). That's when shit really hits the fans. Restarting the grid is a pretty manual and time consuming process, and renewables simply add too many variables to the equation to make this process possible. They would need to split the grid into lots of micro-grids, but then they would need interconnectors between each micro-grid that will be constantly tripping and incur substantial maintenance costs in normal operation.
I am aware that you are not the original commenter I was responding to, but I can't help noticing that you did not respond to the main thrust of my previous comment though, about metallurgical coal.
Has technology just blown your mind?
I've not heard a single reputable scientist or engineer claim this is such an impossible task as you. Yes it will take policy change , but honestly you sound like a defeatist and a denialist and really what is the alternative except for moving forwards? Australia just keep exporting thermal coal to Asia and not change our ways and die from famine, drought and heatwaves ?
Edit: I just want to say this whole argument you're making about "the grid not working without coal", just sounds like such a con. Just like the way the Government of Australia scares everyone with talk of a loss of jobs and growth whenever someone discussing stopping the Adani coal mine. It's just an unsubstantiated claim.
Or drive up Australian housing prices? Or pay off the government to remove environmental protections. Or invest overseas in more mines.
and keep some of it in off shore tax havens.
You’re also assuming those who are good at mining coal could somehow instead be good at both protecting the planet AND making as much money. That’s seldom the case.
I think it's not that straightforward of a situation.
Further there is a weak link between resource extraction an long term economic growth. It requires a huge investment in resources and education that becomes worthless after the resource runs out. Just look at West Virginia to see the long term boons from coal mining.
I don't understand what you're getting at. Compare the life of an average person in West Virginia today to the average person in West Virginia before coal mining and the person today is immensely better off. Technological improvements are the payoffs from investment.
Also as a counter argument, attempting to pressure China economically by choking their imports would probably end badly for us.
But yes 6% in absolute terms is worth caring about.
I'm definitely not an economist, but would it be feasible, if coal production could be co-ordinated nationally, to manipulate the market through (I'm guessing) either or alternately dumping coal on it or suddenly cutting it off, possibly in an unpredictable manner? Does Australia have enough weight to make a difference? And would this have any effect greater than cutting off production entirely?
Meanwhile, the money already going into renewables is on the order of $15 billion per year (for the past two years).
If Australia was able to double the price of coal, it would be what it was back in 2011.
It's so blatantly obvious the current political leadership in Australia is in bed with the coal industry, but like all the other democracies that have been bought by mega corps - what are you going to do?
As bankers and insurers start to internalize this idea, the number of people willing to continue investing, insuring, or financing coal operation is going to vanish and the industry will collapse completely.
There is a massive oversupply globally of natgas at the moment, which is why the long term investment outlook looks bad. It has been overproduced via copious debt, increasing efficiencies have made the extraction price very low, and it’s a pesky byproduct of oil production in some areas (and pricing reflects that in those areas with prices actually going negative at some times). Perhaps if the environmental externalities of extraction were priced in, it would be more expensive but it’s a big reason why the US has been able to retire so much coal over the past decade. Arguably this is a huge net win environmentally speaking.
If you add utility scale batteries, you’re looking at much more for renewable. I’m not sure what type of storage you have in mind though. Add to that, the capacity factors are very high for gas, while notably low for renewable. This impacts payback severely and I’m not even sure if you can sell capacity against a renewable plant - I may be wrong here.
What type of renewable are you talking about and what type of storage? Also what are the new build costs you are referencing? Or are you simply saying that a utility scale battery costs less than building a peaker?
The US didn't become the world's largest oil producer by producing the most expensive oil.
Smoking has been in decline for decades yet cigarette companies have been phenomenal investments.
This isn't really analogous to tobacco because there is no direct substitute for smoking. So long as people are addicted to tobacco there is a predictable and steady decline curve which allows these guys to milk it over time.
Smokers gonna smoke, but outside a few specific places, nobody is going to be generating power with coal in 20 years. Unlike smoking, the consumers of coal power are pragmatic and driven by profit.
If no company or sector could decline due to declining profits, then nothing in the economy would work at all.
To a broader point, this is how real change is enacted: make it matter to enough folks, usually by means of economic pressures. I.e., make bad things cost more than good things. Although obviously ham-fisted tariffs, etc. aren't very effective for a host of reasons. You gotta be more subtle than that.
Tariffs could and probably should be used to punish nations that doesn't want to play with reasonable rules though. Given reasonable politicians it could be used to make sure that everyone are applying carbon taxing and/or similar policies.
That article cites a report written by climate change activists who want coal to be banned as fast as possible. If their fantasy were a reality, market forces would achieve their goals without intervention. Naturally, they're going to argue that government intervention is necessary to speed things along.
Federal reports suggest coal will decline slightly over the next several years, but won't disappear. Some forms of renewables are competitive with coal (onshore wind, hydro, geothermal), but they cannot be used everywhere. Solar and offshore wind are still not competitive with coal, nuclear, or natural gas.
Depends on where you are in the world; quite a lot of the west has privatised its generation and does dispatch through markets, so the coal plant really will be run if and only if it's profitable.
The UK has almost completely closed all its coal generation in the past decade.
It can (and often does) make sense to invest in industries in terminal decline as price paid for an asset’s cash flow is the primary determinant if returns for the investor. You can buy coal stocks for 25%+ earnings yields. Even if those plants are phased out in 6 or 7 years, one can make solid returns.
Indeed I have invested in cigarette shares in the past while wishing the government would do more to stop smokers. The fact that I hold the equity doesn’t change demand for cigarettes, and only in aggregate does the investor appetite effect WACC. Someone must always hold existing shares. For every buyer there is a seller and vice versa.
Lastly I should mention that metallurgical coal as opposed to thermal coal is a necessary “evil” to smelt steel.
I’ve used this recent hate for coal investments(and weakness in NG) to take positions at high earnings yields in ARCH and HCC.
Hydrogen can be used to smelt steel, and hydrogen can be produced from renewable energy.
It's worth pointing out that only about 7% of coal is used for metallurgical purposes.
The cost of debt has slightly more of an impact but still minimal.
Therefore the decision/demand for the existing shares in the secondary market has little bearing on the company. So no - it doesn’t make a big difference.
Indeed, most are buying back shares in huge amounts.
The debt side of the equation makes a larger impact as the companies roll the debt and most lever the FCF to the equity. The aggregate demand for the bonds will have an impact on profitability... still not much of a difference.
For Blackrock, those 25% yields you talk about don't exist. If Blackrock were to retain a significant investment in those companies, share prices would be higher and yield lower.
What makes sense for a small investor often doesn't make sense for large corporate investors.
That said, investments like what you describe have their own risks. At this point it largely depends on contracts and how quickly alternative power sources can ramp up.
You are the second person to mention tobacco, and I think it's a poor comparison. People are literally addicted to tobacco which guarantees long term demand. Even if that demand is decreasing over time, it's predictable and not severe. Coal does not share those characteristics.
I wish it died but it won't. Not yet.
Data is all the way back to 2015
From 896 million short tons in 2015 to 690 million in 2019. More decline ahead in 2020:
EIA estimates that U.S. coal production declined by 65 million short tons (MMst) (9%) to 690 MMst in 2019. In 2020, EIA expects total U.S. coal production will decline by a further 14% to 597 MMst because of anticipated declines in both exports and domestic consumption in the electric power sector.
With that being said, it's nice to see that the coal industry is losing its economic strength. Hopefully other environmentally unfriendly industries follow suit soon.
the whole comment section shows how much HN knows about markets and economics. pretty much nothing.
a company wants to dump its position and people think they do it because of the environment.
Green sources are becoming more and more cost effective because of lots of tax money went into them because people care about the environment.
Eventually there shall be plenty of more green alternatives that are more economically interesting than coal, but they only reached that place in refinement because environmental focused measures took place.
This was always the climate problem, neutral is not ex-climate stocks.. neutral was maths, just matching the index.
Pure indexing was not taking a climate position.
This is why this is so huge, they’ve reset neutral and are challenging others to do the same.
If they gain net inflows into their updated index products this will move fast.
They're just creating some new/modified indexes as far as I know. There are already more ETFs than individual stocks, I remember reading somewhere.
"The future can’t be built on lay-away; we need a loan. America’s strength for much of the 20th century was inventing new financing models and exporting those banking skills to the world. We need to put that to work once again, this time for climate change. The key insight here is to extend infrastructure financing closer to the home where the infrastructure of the 21st century will sit."
I disagree with this, I think it's easy to paint China as the villain across a cultural, lingual divide in an attempt to make the case that one's own obligations to reduce emissions don't matter. China has a carbon market now and produces more nuclear power than any other country. Climate change is a very real problem for a country with an encroaching desert.
I’d go as far as 90-95% of power is in other branches or covered by judicial limitations.
> contradiction between the company’s new activist stance and
I don't think I agree with calling BlackRock activists. An activist investor uses investment choices as leverage to apply pressure to achieve some other goal.
But BlackRock's statement seems to say that they are doing this for financial reasons. It says they're doing it because regulation (existing or potential) is making those investments riskier. From BlackRock's letter (as quoted in the article):
> Thermal coal production is significantly carbon intensive, becoming less and less economically viable, and highly exposed to regulation because of its environmental impacts. ... we do not believe that the long-term economic or investment rationale justifies continued investment in this sector
They also mention "ESG risk" (https://en.wikipedia.org/wiki/Environmental,_social_and_corp...) later.
So in other words, BlackRock isn't using pressure to change the world. It's responding to pressure and uncertainty. This is just market forces causing BlackRock to keep its distance purely for financial reasons.
What is usually happening is that other technological or consumer behavior is already leading to the decrease in business of some industry, and the divestment push happens simultaneously (because of people's awareness) and is merely a symptom of their final decline.
Take South Africa in the 80s, or the ridiculous grape boycott of the 90s, etc. None of those symbolic acts led to actual changes happening -- those were all consumer or political changes already in flight.
People create much more effect by voting with their dollars than by symbolically calling for divestment. It usually turns out that there is someone willing to take your place as a buyer when you choose to divest. It's only through fundamental change in demand or supply that a business is affected. Stop believing in the effectiveness of the feel-good boycotts. Even Blackrock won't make a difference.
- Cleaner air
- More electricity production
- Developing energy technologies with a substantial export market potential
- Maintaining employment and social stability
The last goal can override the others, depending on current economic conditions and public sentiment. Provincial officials may hew to the last goal even more closely than the central government would like. Provincial government also sometimes faces perverse incentives like getting tax revenue from each ton of coal mined locally but no tax revenue from renewable electricity generated locally.
45 year old Chinese coal miners don't like switching careers and locations much more than 45 year old American coal miners do. China has also faced more and more-recent civil war than America. They will build a bunch of surplus coal plants and keep having coal miners perform make-work to fuel them if that's the price of social stability.
It's a smart thing to do, essentially they're leveraging the existing transmission line infrastructure for coal for future wind
And I thought the walney wind farm in the UK (just under 1 GW) was massive.
I would also hesitate to label it a decision made out of moral reasoning. Neither BlackRock nor (the majority of) their clients want to reduce coal exposure because of that. They rather want to reduce their exposure because they expect more regulatory hurting to come for those companies.
>b...but we can store energy!
No we can't. Energy storage systems are catching fires like Australian wildfires and until it gets solved, no dice.
I don't really see any future where this doesn't happen. If you remove coal subsidies, or tax them, then some of the energy production currently handled by coal will change to oil, but once the oil becomes expensive enough to extract, coal mines will open back up again.
This just seems inevitable to me. Is there an angle I'm missing?
They also offer an Online Personal Loan .
If you invest in energy you want renewables. Purely because of the economics of it. The only exception is if you get some shady Adani deal.
Hopefully this loop is starting.
That concept is quite different from negative feedback related to expressions of disapproval.
I’m referencing people dumping coal stocks so coal is less attractive which means less coal is produced/profitable/used which leads to people dumping more coal stocks.
positive feedback -> doing a thing now results in doing more of that same thing in the future
negative feedback -> doing a thing now results in doing less of that same thing in the future
If dumping coal stocks now results in more dumping of coal stocks in the future, that would be the 'positive' kind of feedback.
e.g. A negative feedback loop could be
More coal -> more CO2 -> pushback on coal companies -> less coal -> less CO2.
A lesson in the potential value of individual action -- in this case and individual nation, but an individual person can have outsize effects. I help organizations change culture to pollute less. One company refused to consider flying less. One sixteen-year-old girl sailing across the Atlantic opened the dialog.
Surely, someone with less of a penchant for moral grandstanding will be happy to buy up shares of fossil companies at a discount. Fossil fuel business doesn't become less profitable just because parts of the equity markets decide to value it lower.
You may argue that divestment prevents companies from rolling their infrastructure. I disagree, if there's a solid profit to be made, someone will bankroll it.
>more important than technology since technology won't exist when the climate collapses and destroys civilization.
The type of climate collapse you're talking about here would have to be something so extreme that most disaster movies would pale in comparison. The defining trait of our species is tool (technology) use. As long as there are humans around, our technology will matter. In fact, improvements in technology are likely our only way out of the mess of climate change.
I think that hyperbole about climate charge hurts the cause. Some people will believe you, but once they learn that you were wrong (or lying) they won't trust you or anyone else on the matter anymore.
Once the climate starts worsening visibly, it will get much worse quicker.
The world is literally on fire now (california, australia, the arctic) - guess what's lined up for the next decade.
I think we should let it come naturally.
Then I can turn it off and go back to ignoring this stuff, along with maybe 30% of the people here.
If you've done any comparison shopping on index funds for investments, you almost certainly ran across blackrock funds even if you didn't know it.
It would be earthshaking if they decided to substitute their judgment for the market and take coal stocks out of all the index funds. But that's not what is being reported.
The reporting seems to be kind of willfully implying a connection that isn't there to get clicks, which I guess is basically all journalism these days.
Blackrock is still the largest asset manager.
Vanguard is closing the gap.
It's fine if they want to create new products that exclude certain types of businesses, to give investors more choices.
But what I don't like is them turning this gigantic pool of money into a spear to jab businesses with their pet political opinions. That's not the role investors entrust their money with them for - they're expected to be more of a passthrough type of management.
They've previously done this same thing with gun manufacturers and retailers, who are doing very well, so you can't make the argument some in this thread are making with fossil fuels being a dead end compared to an alternative (renewables).
So whose next on their woke chopping block? Monsanto for killing the bees? Boeing, Raytheon, et al for supporting the military? Facebook, Twitter, et al for the harmful effects of social media? All the software companies like GitHub that support ICE or the next distasteful federal agency? Like they did with guns, divestment in any company you don't like can be couched in deep concerns over "risk."
I think there's a great opportunity here for someone to start a fund that gets back to the basics of passive index funds, instead of chasing woke asspats like the activist board of BlackRock and Vanguard. I'd certainly move my money.