Dear John,
I’d like you stop what you’re doing for a moment and imagine a scenario.
Imagine you are an investor, and a business comes to you with an opportunity. A beverage company, perhaps, whose facilities are running out of water. A clothing company whose cotton is all dying. A ski resort that is seeing less snow each year. A logistics company that is struggling with melting runways and buckled infrastructure, snarling already-strained supply chains across the economy. And imagine these companies aren’t doing anything to address these issues.
You would probably want to put your money somewhere else, right? Maybe into the competing companies that you know are taking action to prevent these kinds of problems. Or maybe, since there is such a clear business need, you would invest in those working on building the technology to solve them.
Now let’s say the government has decided that you shouldn’t make those smarter investments—or even that you couldn’t.
This sounds like a nightmare but it’s the current reality in many U.S. states. Texas, West Virginia, Idaho, Oklahoma, among others, have either implemented or are considering policies to punish investors, banks and pension funds that are backing the companies acting on climate change.
It all amounts to a bitter backlash against the growing level of investment in addressing the climate crisis.
At the heart of this attack lies a blatant fiction: that climate-smart business practices are somehow a secondary, ideologically driven sideshow to the real financial concerns facing investors and companies. These state officials would have you believe that drought, crop failure, weakened infrastructure and worsening public health don’t stand as serious financial threats to business interests and our economy at large.
But there are an increasing number of companies who do see the danger in failing to act on climate risk. And for them, it’s about business, not politics.
Read more about why environment, social and governance (ESG) issues ARE real financial risks to investors and companies and society at-large, in my recent Reuters column. |
