“Awareness is rapidly changing, and I believe we are on the edge of a fundamental reshaping of finance. The evidence on climate risk is compelling investors to reassess core assumptions about modern finance.”Larry Fink, Blackrock CEO in New York Times
Climate change is an urgent global challenge and must be addressed with a variety of solutions and at many scales. One of those solutions put forth in 2016 is the United Nations’ Framework Convention on Climate Change (UNFCCC)’s Paris Agreement, a commitment signed by 195 nations to ensure that each country does its part to mitigate greenhouse gas emissions, adapt to the climate crisis with innovative solutions, and finance research and technologies to address the increasingly dire challenge. In 2017, Donald Trump announced that the United States would cease participation in the Paris Agreement, but many corporate leaders based in the United States pledged their continued commitment to the UNFCCC’s framework in lieu of federal support. Though governmental policies would expedite progress, corporations, such as Blackrock and a slew of others, have recognized their material impact and in recent years, they have stepped up to make a positive impact.
As Bill Gates mentions in his recent call to action, “Governments, inventors, and entrepreneurs around the world need to focus on making green technologies cheap enough that developing countries will not only want them, but be able to afford them… We need science and innovation to lead the way… We need new tools for fighting climate change.” In his recent blog post, Gates references his continued dedication to investing in clean energy technologies and building scalable impactful programs. As a leader in Corporate America and as one of the richest people in the world, Bill Gates’ commitment is a signifier that carbon emissions reduction is actually a strategic business investment. Put simply, many leaders are following Gates’ leadership and are recognizing investments in sustainable solutions as a method to future-proof business.
It’s worth noting that as few as five years ago, many corporate executives would not even mention the phrase ‘climate change,’ much less address explicit solutions towards minimizing its effects. Thanks to leaders like Microsoft, Blackrock, and Google, that is becoming increasingly rare. Google’s Sundar Pichai, CEO of Alphabet, recently published a blog post called, Our third decade of climate action: Realizing a carbon-free future, which discusses the company’s continued commitment towards a carbon-free future, including the switch to be powered by 100% renewable energy by 2030. In the piece, Pichai addresses Google’s ‘Carbon Legacy,’ which he defines as all operational emissions. This distinction is important because it recognizes that the purchase of clean energy is only the start in addressing the carbon challenge. The ‘Carbon Legacy’ includes Google’s lifetime carbon footprint and also addresses Google’s many partners and investments.
September’s Bloomberg Green Festival highlighted global voices and proprietary insight from leaders of the climate action movement from around the world, including business, finance, science, policy, arts, and more. The virtual summit was attended by over 5,000 global participants, including 60% from the C-Suite of their respective companies. These statistics show that climate action is not simply a grassroots movement, but is deeply rooted in all tiers of Corporate America. As 2020 continues to amplify the urgency to address the complicated challenges of climate change, companies at all scales are future-proofing their business by stepping up to the carbon challenge.
Microsoft, Google, Blackrock and Bloomberg are not the ‘typical’ corporation, but they are symbols for innovation, technological advancement, and massive wealth. Due to their global scope and worldwide impact, these corporations have the power to drive the industry forward and establish advancements that ease the feasibility for participation by smaller corporations. These leaders would be the first to admit that there is a lot more to be done, but their forward-thinking approach will help carry the United States’ progress towards the Paris Agreement commitment, even if the country is not explicitly involved.