The Big Three asset managers - BlackRock, Vanguard and State Street - have vowed to tackle climate change and support sustainable finance. In a new @cityperc working paper, Joseph Baines and I take a closer look at their climate agenda bit.ly/3gskpeA [1/10]
We do this by examining the Big Three's relationships with the publicly-owned companies Carbon Majors - a small group of fossil fuels, cement and mining companies responsible for the bulk of industrial greenhouse gas emissions [2/10] theguardian.com/sustainable-bu…
Our research reveals the centrality of the Big Three in the Carbon Major ownership network. BlackRock and Vanguard are the most prominent owners of these companies, State Street is the fourth largest [3/10]
Crucially, we find that although the Big Three are a growing source of equity financing for the Carbon Majors, the Carbon Majors are a shrinking component of investment portfolios of the Big Three. This amplifies the Big Three's power (you need us, we don't need you) [4/10]
We then examine the proxy voting record of the Big Three at Carbon Major AGMs. We find that the Big Three tend to oppose environmental resolutions but overwhelmingly support management when it comes to dividend payments & stock buybacks, CEO pay, director elections [5/10]
A fine-gained analysis shows that the combined voting decisions of the Big Three are more likely to lead to the failure of environmental resolutions and that, whether they succeed or fail, these resolutions tend to be narrow in scope and piecemeal in nature [6/10]
Our most shocking findings have to do with the Big Three's ESG funds. Not only do the ESG funds invest in many of the same Carbon Majors as their non-ESG funds, they tend to vote the same way at Carbon Major AGMs [7/10]
So what are we to make of the Big Three's recent embrace of climate advocacy? The term "greenwashing" is too benign. Instead, we side Tariq Fancy, BlackRock's former sustainable investing head, who described it as a "deadly distraction" [8/10] cnbc.com/2021/08/24/bla…
At best, we argue that the climate advocacy of shareholders needs to be seen as a minor component of a wider state-led strategy to swiftly dismantle carbon-intensive energy systems and rapidly expand renewable energy infrastructures [9/10]
With the looming threat of climate breakdown we simply cannot afford any more distractions [10/10]
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In our latest for @RIPEJournal Joseph Baines and I examine some of the most important but under-researched corporations in the world today: the commodity trading firms. How do we make sense of these firms and their role in ecological devastation? [1/8] tandfonline.com/doi/full/10.10…
Some claim that financialization has encouraged a short-term outlook in the sector, with dire social and ecological consequences. But evidence for these claims is patchy, so part of our research involved mapping financialization metrics for the top commodity trading firms [2/8]
The evidence is mixed. For example, we find that commodity traders have become less financialized in the source of profits (financial income), but more financialized in the destination of profits (shareholder payouts) [3/8]
My latest @NPEjournal article with Joseph Baines has just been published. COVID has amplified longstanding concerns about rising corporate debt. But how do the debt burdens of large non-financial corporations compare to their smaller counterparts? [1/8] tandfonline.com/doi/full/10.10…
Our findings point to a 'great debt divergence' in the US in recent decades. Large corporations increased their leverage and decreased their debt servicing burdens. Even though smaller corporations de-leveraged, their debt servicing burdens increased [2/8]
Over roughly the same period, the profit margins of large corporations doubled while smaller corporations faced severe losses. In relative terms, our analysis indicates a rapid concentration of power in favour of large firms [3/8]