By David Callaway, Callaway Climate Insights
The way to get rich in a gold rush is to sell shovels, they say. The same appears to be holding true for climate change investments. So far this year, it’s the natural resources plays, the lithium miners etc., that are performing best. The Callaway Climate Insights natural resources index touched a new high for the year of 133.83 on July 12. The 34% year-to-date gain for the index is nearly double the S&P 500’s 17.8% rise. Despite recent choppy trading, it is still outperforming broader measures of climate-related names. Winners include Piedmont Lithium (PLL), Livent (LTHM), and Lithium Americas Corp. (LAC).
All credit due to BlackRock (BLK) this week for more than doubling its support for shareholder climate and social proposals this proxy season. Now on to the next target.
The world’s largest asset manager, which stirred up boardrooms by rejecting CEO pay packages as well as more than five times more director candidates than it did last year, has created fear and loathing in corporate circles. Where the change now needs to focus is on BlackRock’s own backyard, the $2 trillion asset management business itself.
While BlackRock CEO Larry Fink has staked a claim to being an active climate finance campaigner, most of BlackRock’s assets under management are passive index funds, as are those of its largest competitors, State Street Global and Vanguard. Even if all three quadruple their environmental voting records (Vanguard and State Street haven’t reported yet this proxy season), without follow-up from the army of massive pension funds, endowments, and sovereign wealth funds, we are only talking about incremental gains at a time when radical change is needed.
Fink and BlackRock should use their influence to pressure fellow asset managers to make similar disclosures, especially those who have taken up the mantle of ESG and sustainable funds. Just as companies are being forced to explain themselves, large investors should have to justify their decisions to the industry and their clients.
Big institutional investors move in packs, like a herd of woolly mammoths, very slowly out there on the ice, advancing toward wherever they can feed on profit. It’s time someone, BlackRock or otherwise, prompts the stampede.
More insights below. . . .
ZEUS: UK’s unprecedented heat warning brings climate race to Old Blighty
. . . . London is nobody’s idea of a tropical paradise. But a blistering heat wave this week across Southern England led to an unprecedented health warning from the government, portending one of the next great climate transitions — the air conditioning of Old Blighty, writes David Callaway from New York. The threat of extreme heat now across Europe’s major cities, as well as in New York, where smog from the West Coast wildfires is smothering the sky, creates a new kind of climate victim. One that can afford to pay for change — the global capitals. . . .
Chariots of Fire: The Olympics confront a warming world
. . . . Forget the Covid games in Tokyo, Olympics 2020 are shaping up to be the hottest meeting ever of the world’s greatest athletes, writes Justin Sharon. Taking us through a history of climate-related disasters at recent Olympic games, and looking at how Tokyo is changing the strategy this time on many prime events, Sharon posits the question: Will we even have “summer” and “winter” games in coming years? Like in Tokyo this week, the games must go on. But try to enjoy them now. . . .
Thursday’s subscriber insights: Rechargeable concrete batteries?
. . . . Concrete, one of the most consumed and polluting products in the world (thanks to cement), could be getting a new image. Researchers are working to wire concrete into rechargeable batteries that would change the way buildings and pavements collect and store energy. Read more here. . . .
. . . . Strict planning and environmental controls are converging with objections from local residents in many areas to block renewable energy projects such as wind and solar farms. Eventually, the pendulum will swing to less intrusive technologies such as tidal power. These are the companies poised to profit from that shift. Read more here. . . .
. . . . EV battery production is dirty. Lithium mining is a mess. So net-zero pledges from manufacturers, increases in efficiency, and the aggressive reuse and recycling of batteries are essential to growth in the EV industry. Read more here. . . .
Editor’s picks: Flooding in China; plus fires in the west deliver smog to the East Coast
West Coast fires make for East Coast smog
Smoke and particulates from the massive wildfires in California, Washington and Oregon are drifting east and causing air quality alerts on the East Coast this week — some 2,500 miles away. Strong winds have pushed the smoke and ash across the country, leading to the hazy skies in New York City, New Jersey and Pennsylvania earlier this week. Air quality readings, which range from 0 to 50 (good to OK) and over 200 (causing serious health consequences for everyone), have topped 150 on Long Island this morning. Air quality was equally poor in the Carolinas today. The nation’s largest wildfire, Oregon’s Bootleg Fire, has grown to more than 600 square miles. Fires also are raging in California’s Sierra Nevada and in Washington state.
NorCal refineries must slash air pollution
San Francisco’s Bay Area Air Quality Management District has directed two of California’s largest oil refineries to cut fine particulate air pollution, which will require costly modifications at the plants. Chevron’s (CVX) Richmond refinery and PBF Energy’s (PBF) plant in Martinez will be required to install wet gas scrubbers within five years to reduce pollution created by their gasoline-making fluid catalytic cracking units. Reuters reports that the new requirement is expected to cut PBF and Chevron’s particulate matter emissions from its catalytic crackers by about 70%, the air quality district estimates.
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