estate industry in New York City.” You’re a
landlord who misses your target? The fines
run up to $268 a ton of carbon, which could
mean a million dollars for some big property
owners. But, on the other hand, think of
the money to be made from those repairs: a
whole new workforce trained in insulation or
overhauling HVAC. It’s all technically achiev-
able. As Vivian Loftness, a Carnegie Mellon
professor, explained to reporters, “We’ve got
[older] mechanical systems that are running
at 50% efficiency, where there’s things on the
market that will run at 95% efficiency. We’ve
got a lot of room for upgrades for boilers and
chillers, air- handling units, control systems—
there’s so much room in just the hardware of
buildings.”
Imagine the money to be made from
financing that kind of overhaul. And then
think of the money to be saved once you have
completed the upgrades: If you’re using 40%
less energy, year after year, you have suddenly
found a remarkable boost to your P&L. En-
ergy efficiency is one of those revolutions that
can pay for itself.
But none of it is really worth doing unless it
can be done fast. That’s the rub with climate
change: Our period of leverage to affect the
outcome seems to stretch only a few years
into the future. The scientists of the Intergov-
ernmental Panel on Climate Change issued
their most recent update in October of 2018,
cautioning that unless fundamental transfor-
mation of our energy system took place in the
decade of the 2020s—and they defined that
transformation as cutting carbon emissions
in half—we could kiss goodbye any hope of
meeting the necessary climate targets.
And that would be, in the long run, rather
expensive. In the same month as that IPCC
report, British economists attempted to
calculate the damage that would come from
global warming that reached about 3.7 de-
grees Celsius by century’s end, which is in
line with our current trajectory. Their figure?
$551 trillion. Which is significantly more
money than currently exists on planet Earth.
Our options are clear: Invest now with the
opportunity to earn a nice return (and save
humanity in the bargain), or take unfathom-
able losses down the line. The correct choice
should be obvious to any smart financier.to be a little wary of their customers: There are a lot of
Chase credit cards in the hands of people who have come
to care about global warming.
In fact, the speed with which these institutions have
begun to bend is instructive. Early on in this new Stop the
Money Pipeline campaign—which includes big NGOs like
the Sierra Club and Greenpeace—protesters gathered out-
side Liberty Mutual’s Boston headquarters, pointing out
that the insurance giant was continuing to invest heavily in
fossil fuel projects, even as it was cutting off policyholders
in California because climate-fueled wildfires were mak-
ing their homes too risky to underwrite. And it was only
a matter of weeks before Liberty Mutual began to buckle,
announcing a policy in December that would restrict its
investment in coal and in Canada’s dirty tar sands oil
complex. Others like the Hartford soon followed, and
that same month even Goldman Sachs proclaimed that it
would restrict financing for fossil fuel projects in the Arctic.
A significant breakthrough came in January, when Wall
Street behemoth BlackRock—the biggest financial player
of all, with $7.4 trillion in assets under management and a
key target of the emerging campaign—announced that it
was going to put sustainability at the center of its invest-
ment strategy. In a letter to investors, CEO Larry Fink
said, “The evidence on climate risk is compelling investors
to reassess core assumptions about modern finance.” Fink
said that BlackRock would vote against management
teams that weren’t working toward sustainability goals,
and his firm would press companies to disclose plans “for
operating under a scenario where the Paris Agreement’s
goal of limiting global warming to less than two degrees is
fully realized.” And since BlackRock is the biggest single
stockholder for many public companies, the threat comes
with real weight.OF COURSE, this is only half the equation
for businesses thinking about the climate
crisis. The other half is all upside: Some-
one is going to have to build—and finance—
the most massive industrial transition in
human history. “Achieving net zero emissions will require
a whole-economy transition,” Carney said in his valedic-
tory speech to the City of London in late February. “Every
company, every bank, every insurer, and investor will have
to adjust its business model. This could turn an existential
risk into the greatest commercial opportunity of our time.”
Consider just one small example: Late last year, New
York City decreed that all big buildings in the five boroughs
needed to cut their carbon emissions 40% by 2030. That’s
necessary because the 2% of buildings over 25,000 square
feet contribute about half the city’s emissions. Meeting
the target clearly won’t be easy. As the CEO of the Urban
Green Council, John Mandyck, said, “This law could pos-
sibly be the largest disruption in our lifetime for the realA PLANET IN CRISIS : COMMENTARYESS.W.04.20.XMIT.indd 57 FINAL 3/10/2020 5:16:11 PM