LONDON – Business chiefs on Wednesday insisted they are not waiting on bickering governments to fight climate change, after Wall Street titan BlackRock joined a campaign pressuring companies to do more in the buildup to a week of networking in Davos, Switzerland.
Prior to the new decade’s first conclave of global decision-makers, the World Economic Forum released a survey that it portrayed as a call to arms, after devastating wildfires in Australia and an inconclusive climate summit in Madrid.
The window to agree on decisive cuts to carbon emissions risks closing in the 2020s and if the world fails to act, “we will be faced with a situation where we are moving the deckchairs around on the Titanic,” WEF President Borge Brende told a news conference.
In recent years, climate change and its dismal consequences have emerged as dominant concerns shadowing the WEF’s A-list gathering of government and business leaders in the Swiss Alps, along with economic risks.
This time, the WEF’s “Global Risks Perception Survey” found the top five categories of concern for the next 10 years were all environmental — headlined by extreme weather events and failure of governments and businesses to forestall climate change.
For 2020 alone, economic confrontations and domestic political polarization were among the shorter-term drivers of anxiety among the more than 750 executives and industry experts surveyed.
The world’s most powerful climate denier, U.S. President Donald Trump, will attend Davos next week, after agreeing a deal to defuse a trade war he started with China.
Also returning to Davos will be 17-year-old Swedish eco-activist Greta Thunberg, who called in British newspaper The Guardian for an end to the “madness” of investing in fossil fuels.
BlackRock, the world’s biggest asset manager, with nearly $7 trillion invested, said Tuesday it was divesting holdings in companies that earn more than a quarter of their sales from production of electricity-generating coal.
In his annual letter to U.S. company leaders, BlackRock chief executive Larry Fink said markets had been slow to reflect the risk of climate change to business models.
“But awareness is rapidly changing, and I believe we are on the edge of a fundamental reshaping of finance,” wrote Fink, who will be among the VIPs in Davos.
John Drzik, chairman of the business consultancy Marsh and McLennan Insights, said as a result of another BlackRock announcement last week, money managers holding more than $40 trillion now back a corporate initiative called Climate Action 100+.
While stressing the need for a unified response by governments, the campaign says its member companies account for two-thirds of annual global industrial emissions.
“Others will now have to respond to what BlackRock did,” Drzik told AFP at the WEF report’s launch, adding, “$7 trillion alone is meaningful but I think the scale and visibility and reputation of BlackRock just adds to the money.”
German industrial group Siemens has bucked the corporate trend by pressing ahead with its involvement in a vast coal mine in Australia. And for Extinction Rebellion, BlackRock itself “remains waist-deep in fossil fuel investments.”
Still, the needle appears to be shifting in boardrooms as CEOs factor in the likely impact of climate change on their bottom lines and come under pressure from customers, investors and regulators.
“You don’t want to be stuck with technologies and industries that are obsolete. You want to find the winners of the new economy,” Peter Giger, chief risk officer at Zurich Insurance Group, said at the WEF event.
“That’s just good business practice if you run a sustainable business with a long-term perspective,” he said.
The WEF remains vulnerable to charges of double-standards given that many of the Davos elite use private planes to facilitate a week of deal-making and schmoozing.
The organization said it was offsetting the carbon belched by such flights, encouraging their pilots to use biofuels, and offering discounted train tickets for those heading to Switzerland.
“It is something we take really seriously. There’s nothing worse than an organization identifying a risk and failing to do anything about it,” WEF managing director Adrian Monck said.
Greenpeace climate finance campaigner Paul Morozzo commented: “The banks and financial institutions jetting into Davos next week have made trillions pumping money into climate-crashing fuels like oil, gas and coal.
“It’s time to stop funding the crisis and start backing the solutions. That means immediately ending support for fossil fuels we cannot afford to burn,” he said.