Global warming, climate change, all these things are just a dream come true for politicians. I deal with evidence and not with frightening computer models because the seeker after truth does not put his faith in any consensus. The road to the truth is long and hard, but this is the road we must follow. People who describe the unprecedented comfort and ease of modern life as a climate disaster, in my opinion have no idea what a real problem is.
Some of Britain’s biggest banks are under fire for relying on a flawed net zero study that could have influenced which companies they lend to.
Lenders used research that exaggerated the impact of climate change
Some of Britain’s biggest banks are under fire for relying on a flawed net zero study that could have influenced which companies they lend to. The Telegraph has the story.
Lloyds, NatWest and HSBC are among the lenders to have used research that exaggerated the impact of climate change on businesses and the global economy.
The revelation comes after the Network for Greening the Financial System (NGFS), which publishes environmental guidance for banks, warned that some of its analysis was based on an inaccurate paper that was recently retracted.
Lloyds, NatWest and HSBC have all confirmed that they used the NGFS research, with some bankers accessing it to scrutinise the sectors most exposed to the net zero transition.
However, the Bank of England said last year that banks were increasingly using climate forecasts to determine which businesses they lend money to.
This was partially down to bosses seeking to align with net zero, the Bank added.
A research paper from the United Nations in 2020, drawn up in collaboration with Lloyds and 38 other banks, also said the impacts of climate change should be considered when lending to companies.
Following the controversy, Andrew Griffith, the shadow business secretary, said: “This just highlights the risk of banks straying from their core job of lending into green ‘wokery’ which they barely understand and rely too much on others.
“Whilst too many have been willing participants, we now need a bonfire of the various regulations on climate.”
Details of the flawed study, which originated from a paper by the Potsdam Institute for Climate Impact Research, came to light earlier this month.
The paper predicted that climate change would cost $38tn (£28tn) a year by 2049, while also warning that global economic output risked plunging by 62pc by 2100 if carbon emissions continued to rise unabated.
The NGFS first sounded the alarm over the research this summer, which it used to help produce estimates of the long-term economic risks of climate change.
The paper was then retracted this month, and the NGFS has said it will change the way it assesses the impacts of climate change by the end of next year.
Barclays has become the second UK bank to withdraw from a UN-backed net zero target-setting group, claiming that a wave of defections by international lenders meant it was no longer fit for purpose.
It marks a fresh blow for the Net-Zero Banking Alliance (NZBA), after HSBC left in early July. It came months after a wave of exits by US banks, which departed in the run-up to Donald Trump’s inauguration in January.
Lenders and other finance firms have come under fresh pressure over their green commitments as a result of Trump’s return to the White House, which caused a climate backlash as he pushed for higher production of oil and gas.
The UN environment programme’s finance initiative, which is led by banks, required members to ensure their lending, investment and capital markets activities would lead them to hitting net zero emissions targets by 2050 or earlier.
However, Barclays said it was no longer effective, given it no longer counted some of the world’s biggest lenders as members. The US lenders who cancelled their membership at the start of the year include JP Morgan, Citigroup, Bank of America, Morgan Stanley and Goldman Sachs.
Barclays said in a statement on Friday afternoon: “After consideration, we have decided to withdraw from the Net Zero Banking Alliance. With the departure of most of the global banks, the organisation no longer has the membership to support our transition.”
It’s actually much simpler than the Guardian suggests
At the outset, banks smelt the lure of bountiful subsidies for anything Net Zero related. One by one, they are now realising that they cannot make a profit out of the Net Zero scam without those subsidies, which could dry up any time, just as they are now in Trump’s US.
Wall Street’s largest asset managers, private equity firms and brokers have warned that a backlash against sustainable investing is now a material risk, in filings that show how acrimony over ESG principles has become a perceived threat to profits.
Environmental wokeness has become a liability for investors
The backlash against ESG has hit bonds, stocks, corporates
In a recent survey, half of large investors in North America now admit to worrying that ESG exposes them to legal risk. When companies want to create a Green-Woke project they issue ESG bonds to get loans to build it, but sometime between last year and this year those Bonds have halved. Suddenly companies are not dressing up in the Big Green cloak. That’s $6 billion in ESG investments that didn’t happen.
The change in direction has been driven by Florida and Texas and the 19 or more states that have joined them. Even though the $2b in funds Ron De Santis pulled from BlackRock et al last year was a drop in the ocean for a $10 trillion dollar fund, it was the tip of a spear at the heart of the beast. The financial houses and asset managers were using other people’s money to force through political changes those same people didn’t want to vote for. If the crowd followed De Santis the whole game was up.
De Santis has just tightened the screws further today:
The new legislation prohibits Florida municipalities from selling bonds tied to ESG projects, as well as imposing restrictions on seeking ESG ratings. In 2022, Florida issuers sold $13 billion of long-term bonds, making it the fourth-largest issuer in the US, behind California, New York and Texas.
The law also bars Florida’s public money from being deposited in financial institutions that are deemed to pursue “social, political, or ideological interests” in their investment decisions. Florida had almost $37 billion in state deposits…
It’s a phase change in the US with an exodus from ESG Bonds:
Companies sold about $6 billion of bonds last quarter to pay for projects that help the environment, achieve a social goal, or improve their governance, a type of debt known as ESG. That’s down more than 50% from the same time last year, according to data compiled by Bloomberg, which focused on companies outside the financial industry.
Many investors are reconsidering their approach to ESG. Almost half of North America’s biggest investors worry that the politics around ESG securities in the US exposes them to legal risks, according to a global survey of firms overseeing $27 trillion published last month.
Texas is boycotting funds that boycott fossil fuels:
Meanwhile in the US, Texas Comptroller of Public Accounts Glenn Hegar in August 2022 first listed 10 firms and more than 340 individual funds that “boycott energy companies,” a designation that compels state-run entities like pension managers to sell their holdings.
“This represents a material shift in the conversation around ESG,” Texas Comptroller Hegar said in an emailed statement. “The shine is wearing off as Americans discover that ESG investments are not only failing to deliver the financial returns that their proponents promised, but also simultaneously distorting the free market incentives that actually might move the needle on some of the policy objectives that ESG investments supposedly support.”
So now they scramble to look non-Woke
In March Texas added HSBC to the blacklist. HSBC protested saying that it doesn’t “consider itself to be boycotting the financing of energy companies,” but last year they sacked Stuart Kirk for saying that investors don’t have to worry about “climate risk” years from now. HSBC’s political agenda is obvious.
Instead of discussing how they might not know snow, now companies are talking about the risks of “anti-ESG” efforts.
Companies don’t want to talk about their environmental, social and governance goals anymore, experts in ESG and communications tell Axios.
State of play: Anti-ESG forces are in full swing this proxy season — the time of year when public companies host their annual meetings, and shareholders vote on a slate of investor proposals.
A dozen financial companies, including BlackRock, Blackstone and KKR, now list anti-ESG efforts as a risk in their annual reports, the Financial Times recently reported.
Investors have filed 68 anti-ESG proposals this year to date — compared to 45 in all of 2022, per data from the Sustainable Investments Institute, a nonprofit.
BlackRock CEO Larry Fink didn’t mention the term ESG anywhere in his most recent investor letter, a departure from those of the past several years, as Axios’ Andrew Freedman reported.
Patrick Temple-West and Brooke Masters, Financial Times
Wall Street’s largest asset managers, private equity firms and brokers have warned that a backlash against sustainable investing is now a material risk, in filings that show how acrimony over ESG principles has become a perceived threat to profits.
A dozen big US financial companies including BlackRock, Blackstone, KKR and T Rowe Price added language to annual reports filed in the past month cautioning that pressures such as “divergent views” or “competing demands” on environmental, social and governance (ESG) investing could hurt financial performance.
The collapse in bonds is not happening yet in Europe where ESG Bond sales are up this year. It’s very much starting and spreading from the US states. Share the stories, copy the mechanisms. Use the words “fiduciary duty”, “due diligence”, and if you are in the US “anti-trust”.
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