Wall Street's climbdown on ESG pays dividends
CORRECTION: BlackRock removed from Texas blacklist
Editor’s note: An earlier version of today’s email post incorrectly identified the company removed from a Texas boycott list. The correct company is BlackRock.
They saw it coming: This map from Copernicus EU shows the path of destruction created by the collapse of the Birch glacier onto the Swiss town of Blatten. Climate disaster plans were ready and lives were saved. Read more in our news briefs below.
The messy climbdown on ESG policies by financial giants on Wall Street in the face of red-hot political pressure from states such as Florida and Texas has finally begun to pay dividends in the form of billions in renewed business.
The removal of BlackRock BLK 0.00%↑ from Texas’ blacklist of Wall Street firms accused of boycotting the fossil fuel industry, which withheld investment from some $300 billion in pension and state funds for the past three years, underscored the strategic necessity for the fund managers of raising the white flag in the face of financial pressure.
While not a good look from the environmental advocate and diversity perspective, the loss of all that business proved impossible to resist, even as former President Joe Biden’s climate initiatives pumped billions of green energy investments into the economy.
BlackRock was the last in a long line of fund managers and investment banks to fold. Like others it has adopted a strategy of continuing sustainable initiatives, just not talking about them much in the new political climate. Other than in the new code words of energy security.
For the red states, the victory has been a lesson in the value of financial muscle when dealing with Wall Street. Especially in Texas where there are so many energy projects, including solar and wind.
Many of us scoffed at the idea of withholding funds from sophisticated Wall Street strategies, arguing that in the long run it would hurt pension fund clients depending on the highest possible returns. While that might still be true, it now seems like the long run was shorter than expected.
Zeus: The growing threat behind those coal plant extensions
. . . . While Trump administration officials tromp through Alaska this week touting a decades-long fossil fuel project to send gas to Asia, and ravaging the environment in the meantime, a real energy crisis may be developing on the East Coast, writes David Callaway. Three times in the past two weeks, the Department of Energy has intervened in energy markets to bolster fossil fuel sources; twice by keeping coal plants in Michigan and Pennsylvania from closing. Whether this is just a cynical political maneuver as the government looks to cut green energy projects or a sign of an impending summer energy shortage as global warming bites and grids strain from new demands on them for power for AI is the question. But keeping harmful fossil fuel plants open instead of working to bring new green energy online is a recipe for future disaster.
Thursday’s subscriber insights
Nuclear stocks extend summer rally as Meta deal ignites investors
. . . . Even as other renewable energy companies watch in panic as Congress prepares the “big, beautiful” tax bill, nuclear energy companies and ETFs are having a moment this summer as long-term deals with big tech companies continue.
A deal this week from Meta Platforms META 0.00%↑ to buy nuclear energy from Constellation Energy CEG 0.00%↑ is the latest to jolt the reawakened nuclear market, following similar deals this spring with companies such as Microsoft MSFT 0.00%↑ and Amazon AMZN 0.00%↑.
Stocks such as CEG, Vistra Corp. VST 0.00%↑ , NuScale Power SMR 0.00%↑ all are extending month-long gains this week. ETF such as VanEck Uranium and Nuclear NLR 0.00%↑, Global X Uranium, and Range Nuclear Renaissance NUKZ 0.00%↑ are also on the rise.
All of these are long-term deals, but an executive order from the White House last week has boosted interest in the stocks as more and more tech giants look to secure future energy sources for their AI ambitions.
It’s a welcome rally for the nuclear sector but only has as much, ahem, shelf-life as the next big tech deal.
Editor’s picks: Laugh, don’t cry; plus, Swiss village prepared for disaster
Watch the video: Climate Science Translated is a British video campaign to help people understand and connect with the dense terminology of climate change. CBS Mornings reports on how David Cross and climate expert Michael Oppenheimer break down complex science with humor as the campaign launches in the U.S. These comedians pull no punches and they use highly unscientific and non-technical language throughout.
Town buried in glacier collapse but residents were ready
Last week, the Birch Glacier collapsed into the Lotschental Valley, destroying the Swiss alpine village of Blatten. Three million cubic meters of rock were deposited on the glacier in a rockfall, report Phys.org and AFP. The glacier gave way and Blatten, which had been there for more than 800 years, was gone. Almost all 300 residents were evacuated a week earlier as authorities have been monitoring the stability of the mountain. One man, 64, is missing and believed to have stayed behind. It’s not yet clear the extent to which climate change played a role in the glacier collapse; permafrost is declining throughout the alps, but not all parts of the alps are at risk of collapse. However, scientists say, the collapse is a lesson in climate disaster management. Regional and national authorities have been monitoring the Birch Glacier and other parts of mountains. That preparedness enabled them to help the residents of Blatten and save lives.
Latest findings: New research, studies and projects
Steeling for change
Meeting climate targets will lead to major steel production technology shifts and preserve jobs, write the authors of a new research by the same name. Global steel production must reach net-zero CO₂ emissions to maintain under +2°C climate targets, they say. From the abstract: “While investments in green technologies are rising, steel sector decarbonization pathways and their employment impacts are understudied. We fill this gap by first creating a facility level global steel model including capacity utilization and trade in iron and steel to estimate policy driven decarbonization pathways.” Their findings include: Coal-based BF-BOF production will decline sharply and be replaced by mixes of recycled electric arc steel and domestic and imported primary iron from direct reduction technologies, with large regional variation. While global jobs fall from 4.70 to 2.62 million by 2050 due to business-as-usual labor productivity improvements and a large increase in lower job intensity recycled steel use (from 25% to 58% of global production by 2050), net-zero policy preserves 597,000 jobs. Authors: Christopher Bataille, Columbia University - Center on Global Energy Policy (CGEP); Sandeep Pai, Swaniti Initiative; Seton Stiebert, Malay Mishra, Gangadhar Patil, and Li Francis (affiliations not provided to SSRN).
More of the latest research:
Words to live by . . . .
“The planet itself will endure; it’s human systems — agriculture, infrastructure, economies — and vulnerable species that face the most immediate risks.” — Answer to the question, “Is climate change an urgent threat to the planet?,” provided by Grok, the AI chatbot program developed by Elon Musk’s xAI. Read more about the Grok chatbot’s varying answers and its climate denial talking points in Scientific American.