BlackRock is Smart to Prioritize the Climate – and Business Leaders Know It. So What Are They Waiting For?

BlackRock is Smart to Prioritize the Climate – and Business Leaders Know It. So What Are They Waiting For?

NEWSWEEK 1/17/20
By Michael Shank and US Congresswoman Yvette Clarke

We’re starting 2020 with some scary climate signals. We’ve finished another record-breaking year—but for the wrong reasons. 2019 locked in the highest global carbon emissions on record and was the second hottest year ever.

At these rates, the climate change–caused chaos in places like Australia—where wildfires have been taking the lives of millions of animals, displacing thousands of people, evacuating entire communities and destroying billions of dollars-worth of infrastructure—will become commonplace throughout our country, too. The extreme weather drumbeat is quickening. From New York to California, and places in between, we’re seeing the signs of the climate crisis becoming more frequent, more ferocious and more frightening.

Given these warning signs, any rational business-minded leader would act—and fast. Just this week, the world’s largest asset manager, BlackRock, announced that it is putting climate at the center of its investment strategy. Yet, shockingly, national governments—and especially the big emitters—are not acting close to quickly enough. Nowhere is this more apparent than in the United States, where federal action on the climate crisis has been worse than absent these past few years. Instead, the Trump administration has been intentionally and willfully exacerbating the problem for the sake of short-term gains in the fossil fuel industry.

Is the business community, beyond BlackRock, stepping into the void and doing everything it can to protect its assets from climate insecurity and climate risk? Well, the Environmental Defense Fund recently surveyed 600 U.S. senior business leaders at companies with $500 million or greater in revenue—from directors to chief executives—to answer this question as part of its Business and the Fourth Wave of Environmentalism report.

The short answer is no. Shockingly, one in three executives says his or her company lacks internal dialogue about environmental stewardship. Roughly half of the C-suite leaders and vice presidents surveyed also acknowledge that their business objectives and environmental objectives were at odds. That’s half of American big business admitting that their business model is ruinous for the planet. At least they’re acknowledging there’s a problem. That’s the first step.

What’s remarkable here is that they know that their bad-for-the-environment business model is also bad for business. A solid seven in 10 C-suite leaders and vice presidents feel pressure from investors and customers to make sustainability a strategic priority. Another eight in 10 feel pressure from regulators. And nine in 10 business leaders say consumers will likely hold them accountable for their environmental impact.

So what are they waiting for? The green economy in the U.S. is currently valued at $1.31 trillion, which is just 16.5 percent of the global green economy. American business should be seizing this opportunity, especially in the new tech space, in which our nation has historically been a world leader. As the Environmental Defense Fund’s report notes, the “$9.2 billion that investment firms committed to new technologies in 2018 was a 127% jump from 2017 and returns the category to highs it had not seen since the height of the cleantech bubble in 2010.”

This cleantech revolution should be sweeping the country. And in some parts of America it is. Take Brooklyn, New York, for example. Brooklyn businesses are leading the country in building out blockchain technology to support peer-to-peer trading of solar power. They’re taking this technology to other U.S. locations as well, launching a similar solar trading program in Vermont with Green Mountain Power, the state’s largest utility.

NYU’s Urban Future Lab is busy working with businesses to master energy storage solutions so that we can capture the excess energy produced by wind and solar installations during peak hours of operation. And the NYC Energy Efficiency Corporation is bringing large-scale battery storage to local low-income housing developments in Brooklyn, so that everyone can benefit from a cleaner energy future.

This is what America’s cleantech revolution could and should look like. Cleantech hubs—where partnerships and innovation abound, where money is made and where the public benefits—should be everywhere across this country. This is what the fourth wave of environmentalism should look like, with a massive uptick in efficient, resilient and clean technologies.

American business knows what to do next. An impressive 92 percent of business leaders in the Environmental Defense Fund’s survey agree that emerging technologies can simultaneously boost the return on investment and increase sustainability. That’s great news. The attitude is there, but the behavior has yet to catch up. It is time to start investing, America. The cleantech revolution is here for the taking.

U.S. Representative Yvette Clarke of New York is vice chair of the House Energy and Commerce Committee and a leader in the tech policy space as co-chair of the Smart Cities Caucus. Dr. Michael Shank is communications director for the Carbon Neutral Cities Alliance and adjunct faculty at NYU’s Center for Global Affairs.

The views expressed in this article are the writers’ own.