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US firms like BlackRock are dropping their climate obsession while Europe ramps theirs up

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Larry Fink on stage at the 2022 New York Times DealBook on November 30, 2022. in New York CityPhoto by Thos Robinson/Getty Images for The New York Times

From LifeSiteNews

By David James

As U.S. firms such as BlackRock and JPMorgan Chase continue to distance themselves from the ESG and ‘climate change’ agendas, Europe has been moving aggressively in the opposite direction, suggesting a rift is forming on the global economic landscape.

The climate change debate is usually thought to be focused on scientific analyses of the earth’s atmosphere. But that is only what is on the surface. It is also very much about money and politics and there has been a big shift that looks likely to threaten support for the net zero initiative. It may lead to a deep economic and political rift between the U.S. and Europe.

Estimates of the cost of decarbonizing the economy by 2050 have varied, but it is generally agreed that it is a financial bonanza. Goldman Sachs is at the low end with a modest $80 trillion while Bank of America estimates an extraordinary $275 trillion, about 10 times the current value of the U.S. stock market. 

The finance sector, dizzy with the prospect of a huge investment opportunity, imposed a metric on corporations called Environmental, Social and Governance (ESG), a mechanism for demanding that companies go down the net zero route – and also comply with diversity equity and inclusion (DEI) requirements, the “S” part of ESG. Corporations that did not cooperate were threatened with a loss of support in the market and lower relative share prices.  

That trend is starting to reverse. BlackRock, JPMorgan Chase, and State Street recently exited from Climate Action 100+, a coalition of the world’s largest institutional investors that pledges to “ensure the world’s largest corporate greenhouse gas emitters take necessary action on climate change.” The passive fund Vanguard, the world’s second largest, exited over a year ago. 

These four fund managers oversee assets of about $25 trillion, which is approximately a quarter of the entire funds under management in the world.

They are changing direction for two reasons. First, there was an implicit bargain with ESG, whereby compliant companies would not only get to save the environment but also get to see their share prices outperform non-compliant companies. It is not turning out that way. In fact, better returns have come from investing against ESG-compliant companies. 

More compellingly, 16 conservative state attorneys general in the U.S. have demanded answers from BlackRock’s directors regarding the Climate Action and ESG initiatives. Other fund managers and banks have also attracted unwanted scrutiny.

Nothing concentrates the mind of fund managers more than the prospect of clients withdrawing their funds – in this case state government pension money. Larry Fink, chief executive of BlackRock, is now saying he does not think it is helpful to use the term ESG, having been one of the most aggressive advocates. In his 2022 letter to CEOs he was issuing veiled threats to companies not complying with ESG. In 2024, he omitted the term entirely.

As one (anonymous) analyst writes:  “It is a very detailed control system for European companies where the European Commission can, in the future, dictate anything it wants – and punish for any violations any way it wants. Apart from the crazy regulatory load, this initiative can only be seen as a direct seizure of operational control of European companies, and thereby the European economy.”

So, while the U.S. looks to restore an unsteady version of capitalism, Europe is heading towards some kind of climate-driven socialism. 

The EU plan seems to be to eventually direct their banks’ lending, which would radically undermine the region’s free-market system and establish something more like communist-style centralized control. 

This does not mean U.S. governments and bureaucrats will stop pushing their climate agenda. A court case brought by the city of Honolulu, for example, is one of several attempts to bankrupt the American energy industry. But when the big institutional money changes direction then corporations and governments eventually follow. 

The situation is further complicated by the emergence of the expanded BRICS alliance, which will soon represent a bigger proportion of the world economy than the G7. Saudi Arabia, Iran, United Arab Emirates, Ethiopia and Egypt will be added to the original group of Brazil, Russia, India, China and South Africa. 

The BRICS nations will not allow the West’s climate change agenda to reshape their polities. Most of them are either sellers or heavy consumers of fossil fuels. Both India and China are increasing their use of coal, for instance, which makes Western attempts to reduce emissions largely pointless. 

The promise that hundreds of trillions of investment opportunities would come from converting to net zero was always just a financial projection, mere speculation. The scale of transiting to a decarbonized economy would be so enormous it would inevitably become a logistical nightmare, if not an impossibility. 

Energy expenditure represents about an eighth of the world’s GDP. Oil, natural gas and coal still provide 84 percent of the world’s energy, down just two per cent from 20 years ago. Production of renewable energy has increased but so has overall consumption. Oil powers 97 percent of all transportation.  

Relying solely on renewable energy was never realistic and now that the financial dynamic is changing the prospects of achieving net zero have become even more remote. As the finance website ZeroHedge opines: “Both the DEI and ESG gravy trains on Wall Street are finally coming to an unceremonious end.” Financial markets continually get seduced by fads; the ESG agenda is starting to look like yet another example.

Business

Taxpayers criticize Trudeau and Ford for Honda deal

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From the Canadian Taxpayers Federation

Author: Jay Goldberg

The Canadian Taxpayers Federation is criticizing the Trudeau and Ford governments to for giving $5 billion to the Honda Motor Company.

“The Trudeau and Ford governments are giving billions to yet another multinational corporation and leaving middle-class Canadians to pay for it,” said Jay Goldberg, CTF Ontario Director. “Prime Minister Justin Trudeau is sending small businesses bigger a bill with his capital gains tax hike and now he’s handing out billions more in corporate welfare to a huge multinational.

“This announcement is fundamentally unfair to taxpayers.”

The Trudeau government is giving Honda $2.5 billion. The Ford government announced an additional $2.5 billion  subsidies for Honda.

The federal and provincial governments claim this new deal will create 1,000 new jobs, according to media reports. Even if that’s true, the handout will cost taxpayers $5 million per job. And according to Globe and Mail investigation, the government doesn’t even have a proper process in place to track whether promised jobs are actually created.

The Parliamentary Budget Officer has also called into question the government’s claims when it made similar multi-billion-dollar handouts to other multinational corporations.

“The break-even timeline for the $28.2 billion in production subsidies announced for Stellantis-LGES and Volkswagen is estimated to be 20 years, significantly longer than the government’s estimate of a payback within five years for Volkswagen,” wrote the Parliamentary Budget Officer said.

“If politicians want to grow the economy, they should cut taxes and red tape and cancel the corporate welfare,” said Franco Terrazzano, CTF Federal Director. “Just days ago, Trudeau said he wants the rich to pay more, so he should make rich multinational corporations pay for their own factories.”

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UN plastics plans are unscientific and unrealistic

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News release from the Coalition of Concerned Manufacturers and Businesses of Canada

“We must focus on practical solutions and upgrading our recycling infrastructure, not ridiculous restrictions that will harm our health care system, sanitary food supply, increase costs and endanger Canadians’ safety, among other downsides.”

This week Ottawa welcomes 4,000 delegates from the United Nations to discuss how they will oversee a reduction and even possible elimination of plastics from our lives. The key problem is no one has ever figured out how they will replace this essential component of our modern economy and society. The Coalition of Concerned Manufacturers and Businesses of Canada (CCMBC) has launched an information campaign to discuss the realities of plastic, how it contributes massively to our society and the foolishness of those who think plastics can be eliminated or greatly reduced without creating serious problems for key industries such as health care, sanitary food provision, many essential consumer products and safety/protective equipment, among others. CCMBC President Catherine Swift said “The key goal should be to keep plastics in the economy and out of the environment, not eliminate many valuable and irreplaceable plastic items. The plastics and petrochemical industries represent about 300,000 jobs and tens of billions contribution to GDP in Canada, and are on a growth trend.”

The UN campaign to ban plastics to date has been thwarted by reality and facts. UN efforts to eliminate plastics began in 2017, motivated by such terrible images as rivers with massive amounts of floating plastic and animals suffering from negative effects of plastic materials. Although these images were dramatic and disturbing, they do not represent the big picture of what is really happening and do not take into account the many ways plastics are hugely positive elements of modern society. Swift added “Furthermore, Canada is not one of the problem countries with respect to plastics waste. Developing countries are the main culprits and any solution must involve helping the leading plastics polluters find workable solutions and better recycling technology and practices.”

The main goal of plastic is to preserve and protect. Can you imagine health care without sanitary, flexible, irreplaceable and recyclable plastic products? How would we keep our food fresh, clean and healthy without plastic wraps and packaging? Plastic replaces many heavier and less durable materials in so many consumer products too numerous to count. Plastics help the environment by reducing food waste, replacing heavier materials in automobiles and other products that make them more energy-efficient. Many plastics are infinitely recyclable and innovations are taking place to improve them constantly. What is also less known is that most of the replacements for plastics are more expensive and actually worse for the environment.

Swift stated “Environment Minister Steven Guilbeault has been convinced by the superficial arguments that plastics are always bad despite the facts. He has pursued a campaign against all plastics as a result, without factoring in the reality of the immense value of plastic products and that nothing can replace their many attributes. Fortunately, the Canadian Federal court overturned his absurd ban on a number of plastic products on the basis that it was unscientific, impractical and impinged upon provincial jurisdiction.” Sadly, Guilbeault and his Liberal cohorts plan to appeal this legal decision despite its common-sense conclusions. Opinion polls of Canadians show that a strong majority would prefer this government abandon its plastics crusade at this point, but history shows these Liberals prefer pursuing their unrealistic and costly ideologies instead of policies that Canadians support.

The bottom line is that plastics are an essential part of our modern society and opposition has been based on erroneous premises and ill-informed environmentalist claims. Swift concluded “Canada’s record on plastics is one of the best in the world. This doesn’t mean the status quo is sufficient, but we must focus on practical solutions and upgrading our recycling infrastructure, not ridiculous restrictions that will harm our health care system, sanitary food supply, increase costs and endanger Canadians’ safety, among other downsides.” The current Liberal government approach is one that has no basis in fact or science and emphasizes virtue-signaling over tangible and measurable results.  Swift noted “The UN’s original founding purpose after World War II was to prevent another world war. Given our fractious international climate, they should stick to their original goal instead of promoting social justice warrior causes that are unhelpful and expensive.”

The CCMBC was formed in 2016 with a mandate to advocate for proactive and innovative policies that are conducive to manufacturing and business retention and safeguarding job growth in Canada.

SOURCE Coalition of Concerned Manufacturers and Businesses of Canada

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