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A Week in Impact: Alexa, solve the climate crisis

Does BlackRock's watershed CEO letter suggest the finance industry is finally taking climate risk seriously?

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🌍 Amazon founder Jeff Bezos unveiled the Bezos Earth Fund: a $10bn initiative funding “scientists, activists [and] NGOs” that address climate change.

✈️ Delta plans to become the first US carbon-neutral airline by 2030, committing $1bn over the next decade to mitigate all emissions from its global business.

📈 MSCI expects its sustainability indexes to attract more money than its market-value-weighted indexes, says Head of ESG Remy Briand.

🌱 Loss of nature will wipe £368bn a year off global economic growth by 2050—with the UK suffering the third-worst losses—according to a report from WWF.

🌐 A staggering 43% of Nordic institutional investors invest in SDG-aligned impact strategies and another 22% plan to do so, according to NN Investment Partners.

💵 479 new green bonds in 2019 and an explosion of ESG ETFs in 2020: the numbers suggest the green investing 'megatrend' is here to stay, reports CNBC.

👥 Insurer and pensions company Scottish Widows is creating a new ESG team, reflecting the “changing priorities of its clients.”

Alexa, solve the climate crisis

On Monday, Amazon chief executive and world’s wealthiest man Jeff Bezos joined the fight against climate change. In a pithy Instagram post-cum-press release, Bezos pledged to donate $10bn of his own money to “scientists, activists and NGOs—any effort that offers a real possibility to help preserve and protect the natural world.”

Like BP’s recent pledge to reach net-zero emissions by 2050, the Bezos Earth Fund has been met with a healthy dose of cynicism. The Guardian noted Bezos’s announcement came “barely a month after it was revealed Amazon threatened to fire employees who spoke out about the company’s role in the climate crisis.” “Why doesn’t Jeff Bezos pay more tax instead of launching a $10bn green fund?” asked Stefan Stern. Fixing climate change is all very well, but Bezos “should start with Amazon,” added Wired. And my favourite, courtesy of the Independent: “Jeff Bezos likes to start fires then cosplay as a firefighter.”

Questionable corporate practices aside, $10bn is a lot of money. Even when converted into pounds sterling (£7.7bn). Even when measured against Bezos’s net worth (a nicely symmetrical 7.7%). It could, by some estimates, almost double the amount spent on climate change by US philanthropists today. But what will he actually do with it?

The BBC, Bloomberg and the Guardian have collated suggestions, ranging from cleaner energy to forest protection to, most popularly, climate politics (read: anti-fossil-fuel-lobbying lobbying). With $10bn, just about anything seems possible. Which is sort of the problem.

The primary challenge has to do with “scale and imagination,” according to the Atlantic. There are only so many organisations working on climate change, and providing them x-times more money won’t necessarily yield an x-times greater output. Many helpful projects are probably too small. “Across the entire landscape, there are not enough people and projects that can take the kind of capital we need,” the Atlantic concludes. And that is, counterintuitively, the other problem: $10bn may simply be insufficient to tackle a problem as enormous as climate change.

The best outcome may just be that the Bezos Earth Fund kickstarts existing companies into action and gives rise to new companies and technologies (which, if nothing else, should be relatively unencumbered by the pressure to raise funds). As the FT points out, Bezos’s announcement highlights three things: American businesses are "waking up to climate change”; the “power of online crowd protest”; and, finally, the degree to which Silicon Valley and business titans are “putting their faith in science to solve the problem.”

Will tech innovation produce the silver bullet? The $10bn question is whether climate solutions can scale up quickly enough to put the new flood of capital to effective use.