Investing

Amazon's bid to save the world looks a better bet than Wall Street -- for now

By David Callaway, Callaway Climate Insights

LATEST NEWS AND INSIGHTS

  • Amazon’s $2 billion climate tech fund steals a step on Wall Street
  • BlackRock shows the money with six new climate ETFs
  • Two-thirds of Americans believe government should do more on climate
  • The bill for the U.S. shale boom is about to come due — for taxpayers

SAN FRANCISCO (Callaway Climate Insights) — A big impetus for companies to become more climate friendly in coming years will come from their boardrooms, where the more climate-focused directors are involved the better. Activists are already pushing for such change, and in particular pushing for more women on boards to help them find new direction.

Against this backdrop, one of my old companies, BoardEx, a leading relationship mapping and intelligence service based in London, is out with its annual Global Gender Diversity Report.

It’s a fascinating breakdown of boardroom progress, albeit more at the speed of a moving glacier than a melting one so far. The U.S. has six companies in the top 25, including ViacomCBS (VIACA), Omnicom (OMC) and General Motors (GM). But it is still ranked 18th, based on the volume of companies with poor board diversity. I’m linking to it here for any investors or directors who want a free download. 

But I call your attention to the section on sectoral analysis, which shows that the media and retail sectors are the most successful in diversifying their boards whereas industrials and real estate are the least prone. BoardEx doesn’t take a stab at explaining why, though it suggests there might be reasons outside the data. Indeed.

Climate change, as you see from the satellite image above of the Saharan dust cloud bearing down on Florida this week, is a moving target. The battle to address it at the boardroom level is getting outpaced.

. . . . Check please. The shale boom in the U.S., now past its peak and fading fast with oil at $40 a barrel, is about to ignite a new controversy. A report out from Carbon Tracker this week raises the possibility that taxpayers might have to foot the bill for plugging the more than one million shale digs the oil and gas industry have ripped up in the past 14 years since shale drilling (fracking) became popular.

The biggest shale basins, in places like Texas and Louisiana, Pennsylvania and North Dakota, have always been controversial. Activists accused them of everything from polluting local water to causing minor earthquakes. But at their height 10 years ago, shale oil helped make the U.S. energy independent of the Middle East for the first time, and made several companies and individuals rich beyond measure.

Now we’re seeing the other side of the peak. A recent study by Deloitte LLP, reported by Bloomberg News, estimates that a third of the industry is technically insolvent, after burning through $342 billion in cash in the past decade. With money running out, taxpayers might be the only choice. A microcosm of our climate problems if there ever was one. . . .

. . . . Battle of the Titans: The race to fund climate solutions is beginning to look a lot like the age-old battle between Silicon Valley and Wall Street. Amazon (AMZN) announced a $2 billion climate tech fund this morning to invest in climate entrepreneurs and startups, stealing a march on BlackRock, which announced six new ETFs Monday to invest in environmental, social and governance (ESG).

Hard not to bet on Amazon in this case, in terms of speed to market. The Climate Pledge Fund will allow Amazon to cherry-pick startups and ideas that can directly contribute to its business, among other things. And the company, which already has a $100 million climate fund, said as part of its annual sustainability report that it is now on track to run its global operations on 100% renewable energy by 2025 — five years ahead of schedule.

BlackRock’s new products underscore leader Larry Fink’s pledge back in January to expand the company’s offerings of ESG investments and to rid its active balance sheet of fossil fuel investments. In putting the company’s money where Fink’s mouth is, the company is also climbing on board a surge in ESG investing in the first half of this year that has seen about $13 billion come into the sector, according to Bloomberg. The funds will come with BlackRock’s popular iShares tags. . . .

. . . . Meanwhile, in Washington: More than two-thirds of Americans think the government is not doing enough to invest in solutions to climate change, according to a Pew Research Center survey released this morning. Among the ideas supported strongly by both sides of the political aisle are tax credits for carbon capture and storage projects. As I’ve said before, you can’t tax your way to a greener world. But you can certainly avoid taxes along the way. . . .

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