For example, Nike has signed an Arctic Shipping Corporate Pledge to prohibit its products from shipping through the Arctic. With similar sentiments, retailers and shipping companies are making their own announcements. While the document states that affordable energy is critical for functioning economies and its citizens globally, the same expectations do not exist for Indigenous communities and others who live in the Arctic, climate change there brought about by CO2 emissions elsewhere supersedes their economic aspirations and realities. The strategy also discusses its enhanced due diligence process for Arctic projects, which they point out is so stringent that it essentially disqualifies capital investments for these ventures. After all, citizens need affordable energy to fuel their cars, heat their homes, run their businesses, and grow their economies. Yet, it acknowledges that oil and gas will be the main source of energy for decades to come and, “reliance on gas as a transition fuel is expected to increase.” Thus, in the short-term their investments will reflect that reality. Its strategy unveils its shift to increase investments in low carbon projects. It begins with the idea of the Arctic as the bellwether for global climate change, the canary in the coal mine, a vast sprawl of frozen tundra and melting icebergs laden with polar bears, and Indigenous peoples who need to be saved by the world outside.īarclay’s Climate and Energy Strategy was one of the first financial institutions to declare the Arctic as a place that needs preservation. Yet, what we are witnessing is that the North American Arctic has become the narrative of convenience for the global investment community. Thus, to lower the amount of CO2 in the air, the focus must be on emissions at their source, not where they end up. It is timely then to set the record straight once and for all about the myth of the Arctic snow globe – an Arctic that can be bottled up and placed on a shelf safeguarded from the rest of the world.Īs climate change science has made evident, CO2 emissions – wherever they originate – impact the entire globe and most drastically affect the Arctic (CO2 travels via the jet stream from wherever it began whether Los Angeles, Mexico City or Saudi Arabia). If it is safe to say that the moment of focusing on the “S” – or social – in “ESG” has arrived. His statements came even before the events in the US that turned the Black Lives Matter movement into a global effort, and propelled the social piece of ESG into the spotlight. In a June 2020 webinar, Jim Pass from Guggenheim Partners stated that ESG will not only remain, but we will also begin to see greater emphasis on the “S” in ESG as well. On the contrary, it was soon recognized that companies with strong ESG factors in their portfolios had lower declines in relative terms during the crisis. Less than two years following Fink’s letter, the COVID pandemic arrived and as economies fell like dominoes many believed that climate change would take a back seat and with that reporting on ESG. A driving sentiment behind many of the efforts has been the notion that if we can save the Arctic from development, we can save the Earth from climate change. At that time, the point of focus for global investors was on the “E” as they set out to demonstrate the many ways in which they are meeting their responsibility to combat climate and environmental changes. In response, annual reporting on Environmental, Social and Governance (ESG) soon became a standard in financial reporting. Seemingly a lifetime ago, BlackRock CEO, Larry Fink, published a letter addressed to the world’s global financial institutions about the need to find their moral purpose. It’s part of a growing chorus of financial institutions demonstrating their fiduciary responsibility to combat climate change.Īt first hand, the announcements look like testaments to global financial institutions finding their “moral purpose.” However, the unfortunate reality is that their Arctic pledges not only fail to contribute to lowering global CO2 emissions or stop the Arctic from melting, but many of those pledges have significant potential to cause damaging social impacts for those who live in the Arctic. Moral purpose or marketing? This summer, Deutsche Bank became the latest major bank to boycott Arctic resource investment.

Jim fink investing 2017