Smart money tackles climate
The inevitable is now official: the past decade was the hottest in recorded history according to data released this week by the world’s three main climate monitoring agencies. Last year our oceans heated up to record levels.
The world is more than 1°C hotter than average, driving ever-more intense climate disasters around the world.
Last year humanity released more carbon into the atmosphere than in any other year in our history. The world is on track for about 3.5°C of heating.
The disconnect in these last two facts is a pretty clear illustration of how little real attention has been given to the climate crisis.
Climate has always been a story about money, tied into how the markets work and how we consume.
The way we’ve built the world means corporations don’t price in pollution — such as the toxic air from factories and the carbon emissions from cars and power plants — which is driving global heating. Thanks to advertising and money funnelled into politics, they have ensured that we did little about carbon emissions.
This is why decades of climate activism only slightly shifted the dial. It’s why Eskom was given the financing when it asked the World Bank for money to build the third biggest dry-cooled, coal-fired power plant in the world.
But things are rapidly changing.
Until maybe just two years ago, this disconnect between the unfolding disaster and capitalism was astounding. But, now, Eskom cannot get money for fossil fuels. Big mining companies are selling off their coal mines. The money has woken up.
In a letter this week, the head of the world’s biggest investment firm — Blackrock — warned: “The evidence on climate risk is compelling investors to reassess core assumptions about modern finance.”
The company has R100-trillion in investments. It decides winners and losers and warns: “In the near future — and sooner than most anticipate — there will be a significant reallocation of capital.”
Those that don’t take note will lose out: “Over time, companies and countries that do not respond to stakeholders and address sustainability risks will encounter growing scepticism from the markets, and in turn, a higher cost of capital,” said Blackrock’s chief executive Larry Fink.
As we report this week, the ANC’S leadership is fighting over who gets control over the levers of patronage. Politicians aren’t thinking long term.
This will cost all of us as the country gets hit by droughts, wildfires and floods. And as the markets move to face the climate crisis, South Africa will be left behind. —Sipho Kings