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On why it’s time to stop with the tea cups and pinkies

Abstract apocalyptic background - burning and exploding planet . This image elements furnished by NASA

News from the front desk, Issue No 420: It usually takes a few weeks into the new year to adjust the focus and see how things are shaping up. This year was no exception. Until Wednesday. It was then that our hits suddenly spiked strongly, and jumped to among the highest three visitation numbers over the past 12 months.  (Our latest The Green List newsletter that we sent earlier today is also doing really well, so thanks!)

To be truthful, in our opinion all this activity is a bit premature. A full four week break would be far more civilised and good for sustainability. On so many fronts. Lying on the beach doesn’t consume much in resources and quiet think time is far more productive for long term solutions than fast paced responses under pressure.

But so be it.

Romilly Madew set the scene by announcing she was leaving the Green Building Council and stepping into the top job at Infrastructure Australia. A great move for someone from this industry and who has done so much over such a long time to push the green agenda up the ranks of industry and government. More on that legacy soon.

Meanwhile, we’re wishing luck to the agency that’s tasked with finding her replacement. Melissa Macpherson of People for Purpose was confident though. She told us that while Madew’s were big shoes to fill there was a great pool of talent in Australia to choose from.  

“We’re looking for the right blend of commerciality and membership organisation skills,” she told us.

Someone who can be cutting edge and can scoop up the huge demands of both industry and government and “drive better outcomes”. 

But Macpherson won’t have to go overseas to find someone. “Australia is leading the way,” she said. 

“It’s a national search; I feel the person is definitely on our shores.” 

Big waves are also expected from the NABERS camp with its announcement that its new strategy would aim its tool to many more types of property. Great to see.

On the investment front Macquarie Group is also creating some (cautious) optimism now it’s under the rule of its intriguing new boss Shemara Wikramanayake who stepped up as chief executive at the end of last year after many years with the bank.

The big bank formerly known as the Millionaire’s factory, and now searching for a new and more inclusive moniker we suspect, has teamed up with Michael Bloomberg on the United Nations Climate Finance Leadership Initiative he established to tackle climate change. MacBank/Group will be joining fellow team members Goldman Sachs, AXA, HSBC and Japan’s Government Pension Investment. And given it now owns the UK’s Green Bank, we’re expecting a lot from you Shermara.

Bad news on the investment front and highly disappointing was that BlackRock declined to mention climate change at all in its boss Larry Fink’s annual letter to investors in mid January, choosing instead to focus on the far softer and politically more palatable issues of equity and purpose and so on, with some notion of social equity thrown in for good measure. (And so he should; the poor lowly paid folk in New York and elsewhere have been striking – shock, horror, but yes their actions look a lot like unionism – to see if they can encourage their bosses to pay a measly $15 an hour as a minimum wage.)

In general the focus on corporate governance and purpose as something that might drive profit (ahead of naked greed) is fine and noble of course, of course. And Fink points to a Deloitte survey that shows that 63 per cent of millennials think “improving society” should be the primary objective of business.

But if he’s really caring about equity he should also note recent polling that showed a whopping 74 per cent of Americans now care about climate change. Because, as Fink should note, that the biggest threat to equity and justice is when the poor are the first to die from thirst, heat stress and famine. 

Interesting to see what extreme government, combined with extreme weather, can do to the mindset of the masses.

This is no time to dance around the niceties of polite society, sipping tea with a pinky tilted just so, which essentially is what Fink is doing.

Last year he stunned the world when he said pretty much that if you are not working on climate change and clean energy then don’t bother asking his company for money.

The big problem as noted by a new group called, funnily enough, BlackRock’s Big Problem, is that Fink’s crowd manages a shed load of coal investments. 

When Robert Harley interviewed the company for us to find out why and what made it tick, we heard that its role is to manage funds for others, not choose their destination.

In many of its funds, particularly the ETFs, BlackRock’s role is that of a fiduciary. If the stocks are in the index, they have to be in the fund. BlackRock has no option to sell, no matter how repugnant the individual stock might be environmentally.

Secondly, even when BlackRock cannot sell out, it does not remain a passive manager. It takes very seriously its engagement with the company, including the voting of the shares it controls. Fink calls it “stewardship.” One of the five stewardship priorities for 2018 is climate change disclosure.

“If engagement is to be meaningful and productive – if we collectively are going to focus on benefitting shareholders instead of wasting time and money in proxy fights – then engagement needs to be a year-round conversation about improving long-term value,” he wrote in one of his famous letters to CEOs.

And thirdly, BlackRock is building its own sustainability offerings, and its ability to assess them.

The absence of the words climate change in this year’s letter is a big disappointment from a company that’s so powerful and influential and clearly understands what’s at stake.

Time to stop dancing around with tea cups Larry and say you won’t manage money that’s dirty (or criminal or exploitative…) You have the clout to change the world.

Don’t worry about that man in the White House.

As they say, “he’s a joke unto himself and a burden onto others”.

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