Op-ed views and opinions expressed are solely those of the author.
Perhaps nobody could be more pleased by the recent departure of financial institutions from the repugnant Net Zero Asset Managers Initiative (NZAMI) than the policymakers of developing nations. After all, it is the impoverished of their countries who are most vulnerable to the net zero cabal’s mission to divert financing from the fossil fuel projects so desperately needed in the Third World.
The United Nations-sponsored NZAMI was launched with the unrealistic goal of achieving net zero greenhouse gas emissions across portfolios by 2050. Under this framework, asset managers pledged to leverage their influence as major shareholders, directing capital flows away from industrial activity emitting carbon dioxide and other offending gases and pressuring corporate boards to adopt ESG (environmental, social, and governance) principles.
These efforts included voting proxies at shareholder meetings to align company strategies with absurd climate goals that would do nothing for the environment while forcing expensive energy technologies onto consumers.
The ESG and net zero movements threaten economic growth everywhere but are most damaging where access to reliable energy is lacking and already an impediment to reducing poverty. The EU’s Carbon Border Adjustment Mechanism (CBAM), for example, imposes tariffs on “carbon-intensive” imports, disrupting global trade and disproportionately affecting developing economies.
The World Bank estimates that 733 million people still are without electricity, primarily in Sub-Saharan Africa and South Asia. Net zero commitments by major financial institutions effectively restrict funding for fossil fuel projects in these regions, potentially depriving millions of energy needed for daily living and socioeconomic development.
A few months back, the Namibian energy minister echoed the perspective of fellow African energy bureaucrats as he slammed the Global North’s calls to abandon fossil fuels, arguing his country needs oil and natural gas to industrialize.
Anticipating a Trump administration withdrawal from the Paris Agreement, experts Vijaya Ramachandran and Ted Nordhaus assert that “there is no need for poor countries to wait” to do the same. “While Western donors fret over whether investing in roads is ‘green,’ China has been more than willing to help poor countries build urgently needed infrastructure – as have India, Brazil, Saudi Arabia, and Turkey. It is up to poor countries to seize the moment and return to their own priorities with investments in energy, agriculture, infrastructure, and jobs.”
Amid mounting skepticism about the feasibility of net zero targets, BlackRock, the world’s largest asset manager with an $11.5 trillion portfolio, recently announced its withdrawal from NZAMI.
BlackRock’s departure follows a wave of similar exits by major U.S. banks from the Net Zero Banking Alliance (NZBA). Over the past two months, JPMorgan Chase, Morgan Stanley, Citigroup and Bank of America have withdrawn from the alliance.
Members of the U.S. Congress have suggested that the net zero movement skated dangerously close to antitrust violations, as it orchestrated a coordinated corporate march toward questionable climate goals while everyday Americans bore the economic burden.
A federal judge in Texas has said American Airlines violated federal law by basing investment decisions for its employee retirement plan on ESG factors. To nobody’s surprise, Blackrock was the asset manager for the airline.
NZAMI’s approach of forcing systemic change through financial clout, it seems, placed asset managers like BlackRock in a precarious position.
In writing about the withdrawal from NZAMI, journalist Charles Gasperino says, “BlackRock money managers in the U.S. are no longer under pressure to use ESG screens in all investment decisions, instead doing it just for clients that ask for such methods. It has vastly scaled back supporting ESG-related proxy proposals or shareholder votes.”
Judiciary Committee Chairman Jim Jordan has called BlackRock’s departure “a huge win for freedom and American prosperity. All U.S. financial institutions should follow suit and abandon the climate cartel and woke ESG policies.”
The optimism of net zero critics notwithstanding, BlackRock continues to speak out both sides of its corporate mouth: Reuters reports that despite exiting NZAMI, BlackRock executives said the “departure doesn’t change the way we develop products and solutions for clients or how we manage their portfolios.”
In other words, the proof will be in the pudding as developers seek financing for power plants, pipelines and the like. Some expect net zero coercion to continue with a lower profile. We shall see.
In the meantime, we can hope for abandonment of the ill-informed, pseudoscientific environmental movement that demonizes a beneficial gas – carbon dioxide – to benefit the politically connected with “green” subsidies financed by the public.
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