The leaders financing the planet’s future
BY JUSTIN WORLAND
UNDERSTANDING CLIMATE CHANGE REQUIRES wrapping your head around some crazy financial figures. To transition the global economy away from fossil fuels—according to the International Energy Agency—governments, financiers, and businesses must invest some $4 trillion into clean energy every year beginning in 2030. That sounds like a lot, but it’s dwarfed by the cost of doing nothing. Insurance giant Swiss Re warned last year that climate change could cut off nearly 15% of global economic output by 2050. In 2022, these numbers came to the fore as leaders grappled with the urgent need to find the green to go green.
Perhaps no single climate investment this year will go further than the $369 billion the U.S. is spending to catalyze renewables and cut emissions via the Inflation Reduction Act. After holding up the legislation for the first 18 months of Joe Biden’s presidency, West Virginia Democratic Senator Joe Manchin struck a deal in July to bring the law’s most significant provisions to life. Analysts say it will help dramatically cut U.S. emissions and incentivize trillions more in private investment.
Speaking of private investment, Yvon Chouinard, founder of retailer Patagonia, made waves in September when he announced he would donate the entire company—reportedly valued at around $3 billion—to save the planet. Future profits will be used to address climate change, not to benefit shareholders. Elsewhere, satisfying shareholders has proved a difficult needle to thread. Many investors are eager to see companies prioritize environmental, social, and governance (ESG) issues, but some politicians, including in Florida and Texas, are trying to block state funds from making ESG investments. Perhaps no one is under more pressure than BlackRock CEO Larry Fink, who has advocated for sustainable investment. He wrote in his annual letter in January that his approach represents the latest iteration of capitalism and is “not woke.”
IN THE PUBLIC SECTOR, too, leaders widely agreed this
