Michael Bloomberg is gaining a high public profile. His self-funded campaign to win the Democratic Party nomination for President of the United States is bringing him to the attention of many people on both sides of the border.
The public may have some familiarity with Mr. Bloomberg. He was Mayor of New York City. Many like me, get our business and markets news from Bloomberg News services.
What people may not know, is the impact Michael Bloomberg is having on energy markets.
In 2017, Bloomberg co-chaired the Task Force on Climate Related Financial Disclosures (TCFD). The other Chair of the Task Force was Mark Carney. Mark Carney was at one time the head of the Bank of Canada and more recently, Governor of the Bank of England. The two men set up the Task Force because they believe climate change presents financial risks to the world economy. They believe those risks need to be disclosed to investors and markets.
You may wonder what this Task Force has to do with energy.
In the past month, Larry Fink, the CEO of BlackRock investments, revealed that his firm is fully behind the Task Force recommendations. With $7.4 Trillion in assets under management, Fink stunned the business community with his announcement that BlackRock will use a climate lens to determine in which companies they will invest. “Climate risk is investment risk”, Fink said. In essence, he has turned BlackRock into one of the world’s largest, if not the largest, sustainability funds.
According to the TCFD website, investors with over $100 Trillion in assets agree with the direction Bloomberg and Carney have lain out. BlackRock is only the latest investment company to make their support public.
What does this development mean for CEOs? It means that companies will be increasingly pressured to disclose their exposure to climate related risks. The goal of transitioning to a low carbon economy is to reduce the greenhouse gas emissions associated with economic activity. These risks can vary, depending on the economic sector. The intensity of emissions from the burning of fossil fuels can expose a company to this risk for example, if their customers in a supply chain demand products with lower associated emissions.
At 360 Energy, we prefer to see the other side of risk as opportunity. Sustainable energy management reduces our customers’ exposure to climate risks. It also provides them opportunities to wow their customers, reassure their investors and impress their stakeholders. Reducing exposure to volatile energy costs and reducing energy waste are always good things to do. We are now explicitly focusing our company’s efforts to help our clients measure and report these positive outcomes from a climate and carbon emissions standpoint.
Michael Bloomberg has been a highly successful business leader and entrepreneur. He has certainly had success mobilizing the financial and investment community in his campaign to disclose climate related risks. Whether he can bring the same success to his Presidential bid, remains to be seen.