January 29, 2020 / by Terence Lyons / In Environment
Is the Finance Market the real leader of climate change?
Companies are moving away from traditional shareholder capitalism toward creating holistic stakeholder value while working to adjust internal metrics of success to help tackle global issues. One of the biggest ways we’re witnessing this adjustment is the changing face of the financial market, where massive investor funds like BlackRock are looking past usual business metrics and setting Environment, Social, and Governance (ESG) metrics as the lynchpin of their investment strategy.
The risk for businesses is huge. Simply put, poor ESG performance = no finance!
The recent World Economic Forum in Davos saw key alliances forming to discuss top companies’ role in the fight to tackle key global issues. The momentum of Davos is likely to remain as Sustainable Financing became a hot topic not just of discussion, but action - BlackRock’s CEO Larry Fink and the $41 trillion alliance Climate Action 100+ are pressuring companies to disclose their Environmental, Social and Corporate Governance (ESG) commitments by threatening to divert their funds towards more sustainable alternatives.
It’s all about value at stake. Consumer purchase preferences, share price, finance balance sheets, reputation, and the future of the planet.