6 ms·

Investors overseeing $14T call for vote on company climate plans

80 points by hassanahmad 5y ago

throwaway894345 5y ago
This seems wonderful—I’m a little confused on who these investors are though? Is this some sort of climate fund, or a bunch of ordinary fund managers who are deciding that climate is the best way to maximize returns for their investors (e.g., by making sure the companies they invest in stay ahead of regulation)? Also, I’d be really interested in how the investors are going to evaluate these corporations—it seems like there is a lot of potential for “climate virtue signaling” or other similarly low-impact-but-headline-grabbing solutions?
- relax88 5y ago
  Divesting from profitable companies is against the most important incentive of all (profit/money/value). The real solution is to implement carbon taxation globally via trade blocs/agreements and then suddenly the incentives are structured in a way that might actually accomplish something. No amount of divesting is going to accomplish anything. It just makes profitable oil companies a more attractive buy. Which then begs the question… why is this news? Large funds selling unprofitable companies isn’t usually newsworthy outside of finance papers. The fact that we’re reading about it at all almost implies it’s nothing but virtue signalling.
  - klyrs 5y ago
    > Divesting from profitable companies is against the most important incentive of all (profit/money/value). I dunno, some might consider long term survival of the species more important.
    - relax88 5y ago
      What does money represent but the value that humans ascribe to things? We aren’t all willing to pay the same price for certain things, but we all know that we can get more of what we value by getting more money. Fighting against this is like trying to swim up a waterfall. This is why carbon taxation or cap and trade style policy is the the only scalable non-technical solution.
      - munk-a 5y ago
        I think your first line is pretty provably false - "Money can't buy you love" exists as a saying for a reason, some goods and services aren't translatable into monetary values so while money represents the value that humans ascribe to a lot of things it isn't all encompassing. And if you don't like the "soft" counter argument above then externalized costs also nibble away at an understanding that money represents the value we ascribe to costs. I do think that carbon taxation is probably the best resolution to pursue - bringing all those long ignored factors into the actual costs of goods forces the market to respond them - however other approaches to speed this process along (and bridge areas of the world where taxation is politically difficult) seems wise as well.
        relax88 5y ago
        It’s definitely not false. The entire purpose of money to exchange human ascribed value across space and time. People try to buy love all the time, and if they could purchase the real thing they would likely pay a lot for it. Just because something isn’t for sale doesn’t mean it’s value can’t be compared relative to other things. How much would you personally be willing to pay to limit the warming of the Earth to 1.5C?
        klyrs 5y ago
        > How much would you personally be willing to pay to limit the warming of the Earth to 1.5C? Nearly all of my money, if I thought it would actually work, but that's not even half a million canadian. If Jeff Bezos felt the same as me, he could effect significantly more change than I could. Money doesn't represent what "people" value, it represents what the very richest people value.
  - wallacoloo 5y ago
    > No amount of divesting is going to accomplish anything. It just makes profitable oil companies a more attractive buy. Are you certain? In a world of high P/E ratios across the board, profitability is achieved more via appreciation than via dividends. People (e.g. myself) shy away from investing in falling assets, even if their dividend yields are 1% higher than that of the stable or rising asset. Maybe those looking at a 15 year time horizon will see the value and buy despite this, but many people today see it as foolish to try to predict — and therefore invest solely for — 15 years into the future. It’s one of the reasons you don’t see as much short selling as would be maximally profitable in bubbles, for example (eating a couple years of loss and hanging on until the windfall is tough — not just psychologically, but also to your investors who expect consistent returns). I’ve seen arguments both ways though. Perhaps what’s needed at this point is a study, or something with a more formal treatment of the numbers. But without those I don’t think your view should be taken as conclusive.
- SpicyLemonZest 5y ago
  It looks to be a bunch of ordinary fund managers. Note that this isn't really a "maximizing returns" thing; the managers believe that increasing amounts of climate action will be required over the next couple of decades, so they want to check whether their companies can accommodate that while staying successful.
- buryat 5y ago
  the full statement and the list of signers is here https://www.iigcc.org/download/investor-position-statement-vote-on-transition-planning/?wpdmdl=4798&refresh=6103b7c61998f1627633606 https://www.iigcc.org/download/investor-position-statement-v...
  - buryat 5y ago
    blackrock manages about $7T assets, and there’re reports that investors and banks with more than $120T assets are looking to move into ESG assets https://finance.yahoo.com/news/blackrock-leading-120-trillion-investment-200000508.html https://finance.yahoo.com/news/blackrock-leading-120-trillio...
teslabox 5y ago
I think volcanic winters deserve more preparation than the possibility that the climate scientists are right. If the climate scientists are right, it'll be a slow moving disaster, and we'll have to gradually abandon all the buildings next to the ocean that will have to be abandoned anyways (e.g. Surfside Condos in Miami Florida collapsed because the life of reinforced concrete isn't much more than 100 years). 1816 was The Year Without A Summer. At the time people in Europe didn't know why it didn't heat up that summer, but it was a catastrophe for humans who lived in the northern hemisphere, in every sense of the word. Catastrophe: an event causing great and often sudden damage or suffering; a disaster. "a national economic catastrophe" > The year 1816 is known as the Year Without a Summer because of severe climate abnormalities that caused average global temperatures to decrease by 0.4–0.7 °C (0.7–1 °F).[1] Summer temperatures in Europe were the coldest on record between the years of 1766–2000.[2] This resulted in major food shortages across the Northern Hemisphere.[3] > > Evidence suggests that the anomaly was predominantly a volcanic winter event caused by the massive 1815 eruption of Mount Tambora in April in the Dutch East Indies (known today as Indonesia). This eruption was the largest in at least 1,300 years (after the hypothesized eruption causing the extreme weather events of 535–536), and perhaps exacerbated by the 1814 eruption of Mayon in the Philippines. - https://en.wikipedia.org/wiki/Year_Without_a_Summer https://en.wikipedia.org/wiki/Year_Without_a_Summer 1816 Summer in France was 3 degrees celcius cooler than average: https://en.wikipedia.org/wiki/Year_Without_a_Summer#/media/File:1816_summer.png https://en.wikipedia.org/wiki/Year_Without_a_Summer#/media/F... How do you prepare for both a certain "volcanic winter"-type events (losing growing seasons in the northern latitudes) and the possibility of anthropogenic climate change? How many people would die if we had two volcanoes go off, in 2022 and 2023, like what happened in 1814 and 1815? Volcanic Winter: https://en.wikipedia.org/wiki/Volcanic_winter https://en.wikipedia.org/wiki/Volcanic_winter My understanding is the 1814 and 1815 volcanic eruptions reduced the amount of heat absorbed by the oceans [0]. By 1816 the oceans were super-chilly, and didn't have enough heat to give off for Europe to have a normal summer. https://news.ycombinator.com/item?id=20013166 https://news.ycombinator.com/item?id=20013166 Climate is variable. Deal with it. Volcanoes are much more of a threat to humans than slow moving disasters.
- ClumsyPilot 5y ago
  "How do you prepare for both a certain "volcanic winter"-type events" Like we did for the past few hundred years - fill up a grain elevator. You store 2 years worth of grain, you get through any such event. https://en.wikipedia.org/wiki/Grain_elevator https://en.wikipedia.org/wiki/Grain_elevator Also we have greenhouses.
deleted 5y ago
[deleted]
seriousquestion 5y ago
What are these investors invested in, exactly? So we know what we should invest in, because they will no doubt push it in a direction that's self interested.
- neom 5y ago
  List of investors at the bottom of the letter[1] from there you should be able to pin down their majority of investments, but from a cursory glance it looks like: Basically everything. [1] https://www.iigcc.org/download/investor-position-statement-vote-on-transition-planning/?wpdmdl=4798&refresh=6103b7c61998f1627633606 https://www.iigcc.org/download/investor-position-statement-v...
thinkcontext 5y ago
The biggest thing these investors should push for is the companies to stop supporting politicians stopping climate progress and industry organizations that do most of the lobbying.
- md2k7 5y ago
  Xii
ErikVandeWater 5y ago
"We want to virtue signal about addressing climate change and since we own equity in your company we want you to cash in on this marketing opportunity as well. Don't worry. There aren't any consequences if you don't follow through."
- relax88 5y ago
  Pretty much. The whole idea that people will divest from profitable industries is foolish. Some will virtue signal and cash in, some will divest, and where there is money to be made, others will profit. The demand for oil will be satisfied regardless. The real solution is to capture the externalized costs properly with a global carbon tax enforced via trade agreements and let the market sort it out.
  - hogFeast 5y ago
    They will divest. This depends on the PR situation where the company is. But if I was sitting on the board of an energy producer that was under real pressure (an example of this is Shell), my thought would be: right, am I going to have sell up in five years? If so, I am going to deal now because I can probably get a better price today, and I can realise pretty full value either returning all the capital or investing in clean energy. As you say though, the problem with this logic is that divesting does not change the demand for oil. By definition, anyone who divests cares about the issue. Which begs the question: if these companies are divesting then who are they selling to? Unfortunately, there is not a lot of careful thought going on here. Fund managers have been invaded, somehow, by people who believe that corporations are responsible for polluting...and if we somehow just punish/shame them enough, then pollution will stop (and I would say this is driven almost entirely by the psychology of individual managers and how they want other people to perceive them). This is not the case. And there is a real risk of things going very, very wrong. Btw, I don't think the question of virtue signalling is very relevant either. Societies operate through shame. Whether that is shaming someone for being a homosexual or shaming them for polluting. It is effective, and it is a huge incentive (bigger than profit). But the point is not to get confused between the joy that humans get from shaming others/elevating themselves, and actual progress. Climate change is the issue, demand for oil is the cause.
4e530344963049 5y ago
https://trimread.org/articles/32 https://trimread.org/articles/32
Proven 5y ago
Like I commented before, this is final stage of crony climatism: crony capitalists figured out they can skip the whole illusion of separation between them and useful idiots, and recruit the fools to work for them. Climatists' role is to pressure governments to spend more on dealing with climate "crisis", and make sure those businesses who cooperate get lucky in terms of handouts, incentives and programs. Crony capitalists' role is to milk enough money from the Fed and incidentally invest in the stock and bonds - just like the Pelosis.
akomtu 5y ago
I'll start taking these climate protagonists seriously when they make coca-cola stop using plastic bottles.
- kmlx 5y ago
  aren't those recyclable?
  - deleted 5y ago
    [deleted]
  - akomtu 5y ago
    The ocean is filled with these bottles and microplastics. People who bother to put bottles in a recycle bin are pretty well off and don't drink coca-cola, and those who drink it throw these bottles anywhere they feel like.
    - deleted 5y ago
      [deleted]
    - AngryData 5y ago
      Not in places with bottle deposits. You can get over 95% return rates with it.
- renewiltord 5y ago
  In order to tackle the problem of climate change, I'm afraid we're going to have to just leave behind all those in the long tail who are single-issue on one individual aspect of the environment. So yes, you won't take them seriously, and they'll just not care. There's a sort of symmetry, with the exception that they're doing the other thing to some effect and you are not.
- cranekam 5y ago
  I don’t understand how people are conflating recycling and climate change. I have seen more and more of this recently. Of course, virgin plastics mean consuming more fossil fuels but beyond that the two are largely separate in my mind. Recycling everything is unlikely to do much to avert climate change, and could even make it worse if recycling is more energy intensive, but almost every day I see a discussion on climate and many “well, I recycle what I can” comments. Is there a common perception that recycling is a solution to the climate crisis or is it just that people feel it’s the only loosely-related option they have? I’m not saying recycling isn’t important — it is — but it’s much less important than our rapidly collapsing climate.
john579 5y ago
We passed the climate change tipping point years ago. These investors are attempting to profit by selling a false hope. Since nothing can be done, stop whining.
taxyz23 5y ago
I'm confused as to how these so called investors have any right to make policy? These are managers of other people's money. This is not their own money. They have never asked for a vote by their investors as to whether they should become active in social policies. They could just as well be arguing for more use of fossil fuels. The opinion of money managers should have no place in shaping policy.

80 points by hassanahmad 5y ago

This seems wonderful—I’m a little confused on who these investors are though? Is this some sort of climate fund, or a bunch of ordinary fund managers who are deciding that climate is the best way to maximize returns for their investors (e.g., by making sure the companies they invest in stay ahead of regulation)? Also, I’d be really interested in how the investors are going to evaluate these corporations—it seems like there is a lot of potential for “climate virtue signaling” or other similarly low-impact-but-headline-grabbing solutions?

relax88 5y ago
Divesting from profitable companies is against the most important incentive of all (profit/money/value). The real solution is to implement carbon taxation globally via trade blocs/agreements and then suddenly the incentives are structured in a way that might actually accomplish something. No amount of divesting is going to accomplish anything. It just makes profitable oil companies a more attractive buy. Which then begs the question… why is this news? Large funds selling unprofitable companies isn’t usually newsworthy outside of finance papers. The fact that we’re reading about it at all almost implies it’s nothing but virtue signalling.
- klyrs 5y ago
  > Divesting from profitable companies is against the most important incentive of all (profit/money/value). I dunno, some might consider long term survival of the species more important.
  - relax88 5y ago
    What does money represent but the value that humans ascribe to things? We aren’t all willing to pay the same price for certain things, but we all know that we can get more of what we value by getting more money. Fighting against this is like trying to swim up a waterfall. This is why carbon taxation or cap and trade style policy is the the only scalable non-technical solution.
    - munk-a 5y ago
      I think your first line is pretty provably false - "Money can't buy you love" exists as a saying for a reason, some goods and services aren't translatable into monetary values so while money represents the value that humans ascribe to a lot of things it isn't all encompassing. And if you don't like the "soft" counter argument above then externalized costs also nibble away at an understanding that money represents the value we ascribe to costs. I do think that carbon taxation is probably the best resolution to pursue - bringing all those long ignored factors into the actual costs of goods forces the market to respond them - however other approaches to speed this process along (and bridge areas of the world where taxation is politically difficult) seems wise as well.
      - relax88 5y ago
        It’s definitely not false. The entire purpose of money to exchange human ascribed value across space and time. People try to buy love all the time, and if they could purchase the real thing they would likely pay a lot for it. Just because something isn’t for sale doesn’t mean it’s value can’t be compared relative to other things. How much would you personally be willing to pay to limit the warming of the Earth to 1.5C?
        klyrs 5y ago
        > How much would you personally be willing to pay to limit the warming of the Earth to 1.5C? Nearly all of my money, if I thought it would actually work, but that's not even half a million canadian. If Jeff Bezos felt the same as me, he could effect significantly more change than I could. Money doesn't represent what "people" value, it represents what the very richest people value.
- wallacoloo 5y ago
  > No amount of divesting is going to accomplish anything. It just makes profitable oil companies a more attractive buy. Are you certain? In a world of high P/E ratios across the board, profitability is achieved more via appreciation than via dividends. People (e.g. myself) shy away from investing in falling assets, even if their dividend yields are 1% higher than that of the stable or rising asset. Maybe those looking at a 15 year time horizon will see the value and buy despite this, but many people today see it as foolish to try to predict — and therefore invest solely for — 15 years into the future. It’s one of the reasons you don’t see as much short selling as would be maximally profitable in bubbles, for example (eating a couple years of loss and hanging on until the windfall is tough — not just psychologically, but also to your investors who expect consistent returns). I’ve seen arguments both ways though. Perhaps what’s needed at this point is a study, or something with a more formal treatment of the numbers. But without those I don’t think your view should be taken as conclusive.
SpicyLemonZest 5y ago
It looks to be a bunch of ordinary fund managers. Note that this isn't really a "maximizing returns" thing; the managers believe that increasing amounts of climate action will be required over the next couple of decades, so they want to check whether their companies can accommodate that while staying successful.
buryat 5y ago
the full statement and the list of signers is here https://www.iigcc.org/download/investor-position-statement-vote-on-transition-planning/?wpdmdl=4798&refresh=6103b7c61998f1627633606 https://www.iigcc.org/download/investor-position-statement-v...
- buryat 5y ago
  blackrock manages about $7T assets, and there’re reports that investors and banks with more than $120T assets are looking to move into ESG assets https://finance.yahoo.com/news/blackrock-leading-120-trillion-investment-200000508.html https://finance.yahoo.com/news/blackrock-leading-120-trillio...

teslabox 5y ago

I think volcanic winters deserve more preparation than the possibility that the climate scientists are right. If the climate scientists are right, it'll be a slow moving disaster, and we'll have to gradually abandon all the buildings next to the ocean that will have to be abandoned anyways (e.g. Surfside Condos in Miami Florida collapsed because the life of reinforced concrete isn't much more than 100 years). 1816 was The Year Without A Summer. At the time people in Europe didn't know why it didn't heat up that summer, but it was a catastrophe for humans who lived in the northern hemisphere, in every sense of the word. Catastrophe: an event causing great and often sudden damage or suffering; a disaster. "a national economic catastrophe" > The year 1816 is known as the Year Without a Summer because of severe climate abnormalities that caused average global temperatures to decrease by 0.4–0.7 °C (0.7–1 °F).[1] Summer temperatures in Europe were the coldest on record between the years of 1766–2000.[2] This resulted in major food shortages across the Northern Hemisphere.[3] > > Evidence suggests that the anomaly was predominantly a volcanic winter event caused by the massive 1815 eruption of Mount Tambora in April in the Dutch East Indies (known today as Indonesia). This eruption was the largest in at least 1,300 years (after the hypothesized eruption causing the extreme weather events of 535–536), and perhaps exacerbated by the 1814 eruption of Mayon in the Philippines. - https://en.wikipedia.org/wiki/Year_Without_a_Summer https://en.wikipedia.org/wiki/Year_Without_a_Summer 1816 Summer in France was 3 degrees celcius cooler than average: https://en.wikipedia.org/wiki/Year_Without_a_Summer#/media/File:1816_summer.png https://en.wikipedia.org/wiki/Year_Without_a_Summer#/media/F... How do you prepare for both a certain "volcanic winter"-type events (losing growing seasons in the northern latitudes) and the possibility of anthropogenic climate change? How many people would die if we had two volcanoes go off, in 2022 and 2023, like what happened in 1814 and 1815? Volcanic Winter: https://en.wikipedia.org/wiki/Volcanic_winter https://en.wikipedia.org/wiki/Volcanic_winter My understanding is the 1814 and 1815 volcanic eruptions reduced the amount of heat absorbed by the oceans [0]. By 1816 the oceans were super-chilly, and didn't have enough heat to give off for Europe to have a normal summer. https://news.ycombinator.com/item?id=20013166 https://news.ycombinator.com/item?id=20013166 Climate is variable. Deal with it. Volcanoes are much more of a threat to humans than slow moving disasters.

ClumsyPilot 5y ago
"How do you prepare for both a certain "volcanic winter"-type events" Like we did for the past few hundred years - fill up a grain elevator. You store 2 years worth of grain, you get through any such event. https://en.wikipedia.org/wiki/Grain_elevator https://en.wikipedia.org/wiki/Grain_elevator Also we have greenhouses.

deleted 5y ago

[deleted]

seriousquestion 5y ago

What are these investors invested in, exactly? So we know what we should invest in, because they will no doubt push it in a direction that's self interested.

neom 5y ago
List of investors at the bottom of the letter[1] from there you should be able to pin down their majority of investments, but from a cursory glance it looks like: Basically everything. [1] https://www.iigcc.org/download/investor-position-statement-vote-on-transition-planning/?wpdmdl=4798&refresh=6103b7c61998f1627633606 https://www.iigcc.org/download/investor-position-statement-v...

thinkcontext 5y ago

The biggest thing these investors should push for is the companies to stop supporting politicians stopping climate progress and industry organizations that do most of the lobbying.

md2k7 5y ago
Xii

ErikVandeWater 5y ago

"We want to virtue signal about addressing climate change and since we own equity in your company we want you to cash in on this marketing opportunity as well. Don't worry. There aren't any consequences if you don't follow through."

relax88 5y ago
Pretty much. The whole idea that people will divest from profitable industries is foolish. Some will virtue signal and cash in, some will divest, and where there is money to be made, others will profit. The demand for oil will be satisfied regardless. The real solution is to capture the externalized costs properly with a global carbon tax enforced via trade agreements and let the market sort it out.
- hogFeast 5y ago
  They will divest. This depends on the PR situation where the company is. But if I was sitting on the board of an energy producer that was under real pressure (an example of this is Shell), my thought would be: right, am I going to have sell up in five years? If so, I am going to deal now because I can probably get a better price today, and I can realise pretty full value either returning all the capital or investing in clean energy. As you say though, the problem with this logic is that divesting does not change the demand for oil. By definition, anyone who divests cares about the issue. Which begs the question: if these companies are divesting then who are they selling to? Unfortunately, there is not a lot of careful thought going on here. Fund managers have been invaded, somehow, by people who believe that corporations are responsible for polluting...and if we somehow just punish/shame them enough, then pollution will stop (and I would say this is driven almost entirely by the psychology of individual managers and how they want other people to perceive them). This is not the case. And there is a real risk of things going very, very wrong. Btw, I don't think the question of virtue signalling is very relevant either. Societies operate through shame. Whether that is shaming someone for being a homosexual or shaming them for polluting. It is effective, and it is a huge incentive (bigger than profit). But the point is not to get confused between the joy that humans get from shaming others/elevating themselves, and actual progress. Climate change is the issue, demand for oil is the cause.

4e530344963049 5y ago

https://trimread.org/articles/32 https://trimread.org/articles/32

Proven 5y ago

Like I commented before, this is final stage of crony climatism: crony capitalists figured out they can skip the whole illusion of separation between them and useful idiots, and recruit the fools to work for them. Climatists' role is to pressure governments to spend more on dealing with climate "crisis", and make sure those businesses who cooperate get lucky in terms of handouts, incentives and programs. Crony capitalists' role is to milk enough money from the Fed and incidentally invest in the stock and bonds - just like the Pelosis.

akomtu 5y ago

I'll start taking these climate protagonists seriously when they make coca-cola stop using plastic bottles.

kmlx 5y ago
aren't those recyclable?
- deleted 5y ago
  [deleted]
- akomtu 5y ago
  The ocean is filled with these bottles and microplastics. People who bother to put bottles in a recycle bin are pretty well off and don't drink coca-cola, and those who drink it throw these bottles anywhere they feel like.
  - deleted 5y ago
    [deleted]
  - AngryData 5y ago
    Not in places with bottle deposits. You can get over 95% return rates with it.
renewiltord 5y ago
In order to tackle the problem of climate change, I'm afraid we're going to have to just leave behind all those in the long tail who are single-issue on one individual aspect of the environment. So yes, you won't take them seriously, and they'll just not care. There's a sort of symmetry, with the exception that they're doing the other thing to some effect and you are not.
cranekam 5y ago
I don’t understand how people are conflating recycling and climate change. I have seen more and more of this recently. Of course, virgin plastics mean consuming more fossil fuels but beyond that the two are largely separate in my mind. Recycling everything is unlikely to do much to avert climate change, and could even make it worse if recycling is more energy intensive, but almost every day I see a discussion on climate and many “well, I recycle what I can” comments. Is there a common perception that recycling is a solution to the climate crisis or is it just that people feel it’s the only loosely-related option they have? I’m not saying recycling isn’t important — it is — but it’s much less important than our rapidly collapsing climate.

john579 5y ago

We passed the climate change tipping point years ago. These investors are attempting to profit by selling a false hope. Since nothing can be done, stop whining.

taxyz23 5y ago

I'm confused as to how these so called investors have any right to make policy? These are managers of other people's money. This is not their own money. They have never asked for a vote by their investors as to whether they should become active in social policies. They could just as well be arguing for more use of fossil fuels. The opinion of money managers should have no place in shaping policy.