Society’s Bottom Line?

A buddy of mine drove up in his rusted out “new” pickup to have a socially distanced visit. It was great to catch up. When he was about to leave, he asked, “We won’t need this Green New Deal will we?”

I replied, “To be honest, I am afraid we will need a whole lot more than a Green New Deal if we want our kids to make it.”

He frowned and said, “but, I can’t afford a new electric vehicle.”

“Don’t worry”, said I, “We have 10 years to reduce emissions to half and 20 to go to zero. Fossil fuels will be around long enough so you can by a few more pickup trucks. And, if we are lucky enough to live that long, you may even find a “new” used electric or hydrogen vehicle.

The cost of transitioning to a clean society is on many people’s minds and we are susceptible to fearmongering.

On the other end of the economic ladder there is a dramatic awakening in progress. At the very pinnacles of world finance the institutions that lend money, invest money, and protect our businesses and homes know they must adapt to climate risks. The banks, investment firms, and insurance companies also know world governments must act to reverse climate disruption (mitigation) as adaption is only a short-term fix.

There is no more interesting time to be an observer of climate science and human nature than now. 2020 looks like the pivotal year for earth. America with its massive wealth and economy will, or will not, lead. Observing, researching, and trying to understand why our climate awareness has been so slow to develop has been excruciatingly frustrating. World awareness started with scientist pioneers. Then came a world-wide scientific effort to gather climate data. This hard-won knowledge lead to warnings from the science community beginning in 1965.

By 1992 massive propaganda funding by the fossil fuel companies undermined the work of our independent scientists. The oil companies’ scientists had been warning their CEOs about climate well before independent scientists had accumulated their damning evidence. Instead of pooling their information with independent scientists, the oil companies hid their data and hired professional liars. Honest science lost the initiative.

It has taken years of hard work to regain momentum.  Concerned citizens have mobilized. Business leaders like Elon Musk, Bill Gates, the Waltons, and Jeff Bezos have joined climate activists to move to action.  Recently children, world-wide, have abandoned their childhoods to fight for their future.

Yet, we have elected politicians either unschooled or devoid of moral courage to act. The plans to heal our life support system, earth, remain plans gathering dust. Survival, it seems, is not on their radar screens. Will this change?

The climate movement and our scientists wonder what it will take to move forward. The best science ever amassed in the history of mankind has failed. The best minds in business have been stymied. Our kid’s pleas for a future have been greeted with disdain. We need reinforcements. We need something BIG.

There is a saying in law enforcement, “If you want to solve the crime, follow the money.” Like the wise policeman, politically savvy people say, “If you want to get something done in Washington, bring a suitcase of cash.”

There is good news. The Big Dogs of finance are now on the field and in the game. The banks, investment firms, and insurance companies are flexing their financial might.  If behind their growls are teeth, we may have the ally we need just in the nick of time.

I have reported on this before. The World Bank, the International Energy Agency, the International Monetary Fund, PriceWaterhouseCoopers and a few others in the large financial canine club have been barking out climate warnings for years.  

The Davos World Economic Forum has been upfront. Their studies tell us the most likely and devastating risks to profit are extreme weather and a failure to adapt to and mitigate climate change.

Just days ago, new financial entities announced they are creating means to measure climate risks to the world economic system. They have hired professionals to build “stress tests” to evaluate the resilience of their institutions. In the study called, “World Bank Outlook 2050”, the central banks of 39 countries are uniting to change their banking focus to support countries by financing their long-term goals of decarbonization.

The Big Banks, Insurance Companies, and Investment Firms like Black Rock, J.P. Morgan, and reinsurance giant Swissre, are analyzing their vulnerabilities. They are redirecting their investment strategies to focus on sustainable industries. By identifying their biggest risks, they temporarily protect their institutions and their investors. Today, it is all about bringing home the bacon in a sustainable manner.  

 Recently, a very high-profile consortium of nonprofits, investment businesses, and influential individuals in the organization called CERES released a report called, “Addressing climate as a systemic risk: A call to action for U.S. financial regulators.” The report identifies climate risks and outlines a series of action steps for financial regulators in various US governmental financial institutions, like the Federal Reserve.

To sum up the various reports the warning goes like this:  It is clear something will have to change if humanity is going to economically survive.

On the other side of the coin, dire warnings are balanced out by statements that indicate our situation is not hopeless if we act. The recent statement by the CEO of Shell Oil is promising. He referred to the transition to clean energy as “…the greatest commercial opportunity---ever.” In the COVID economic downturn Shell has had to lay off employees. But, Shell Oil is financing and protecting its green energy divisions.

Can governments be swayed to common sense decision making? There can be no more vivid example than what recently transpired in Europe. The European economy, as well as the rest of the world, is staggering from the COVID pandemic. To counter the economic downturn and simultaneously meet sustainability targets, 25% of the massive European economic recovery package is earmarked for green projects.

Europe has the goal to be carbon net zero by 2050. Using the money needed to revive their economies and reach net zero emissions, while simultaneously reviving the economy with good jobs is as they say, a no-brainer. The pandemic has turned into an opportunity to kill two birds with one stone.

There is a need for speed. We cannot save our economic future if we do not act decisively now. Because, as I said to my friend, even with aggressive action we will not be fossil fuel free for twenty years.

Our kid’s future hinges on two unanswered questions. The first question is who will show up in DC with the biggest suitcase? Will it be the perennial deep pocketed fossil fuel companies?  Or will it be concerned citizens teamed with our financial institutions?

More importantly, who is going to show up at the voting booth? With the Big Dogs now in the fight do not assume our kid’s future will be won easily. This is going to be dog eat dog. Power is not relinquished without a struggle. Big Oil has been in the driver’s seat ever since World War II. Be prepared for fur to fly. The Big Dogs who manage our finances need us just as much as we need them.

The only day every citizen is on an equal footing is voting day. The rich man and the poor, the wise man and the ignorant, the big dog and the little pup are all equals on election day.

I have a bumper sticker that says, “Voting Matters”. I wish it said, “And, wise voting matters more. Get off your haunches and vote!” Do not let anyone in your pack sit home chewing on a bone. It’s that important.

Thank you note to my readers: Every so often a concerned citizen gives me a lead. This business column came, in part, from a lead directing me to Fortune Magazine’s business sustainability articles.