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14 Dec 2022 | OP ED Watch

Now it’s the world’s second-largest asset manager Vanguard bailing on Mark Carney’s GFANZ “Net Zero Asset Managers” initiative, out of an abundance of desire to “help provide the clarity our investors desire” about throwing their assets down the green rabbit hole. Or as Bloomberg put it with delicacy, “Vanguard indicated its decision rested in a desire to maintain the freedom not to restrict its investment options.” Turns out green schemes aren’t the money makers we were told, which is why it requires governments to rush in where business fears to tread. Canada’s Finance Minister and deputy Prime Minister Chrystia Freeland has obliged planning to spend $2 billion on the shares of a non-existent company that will attract private funds to green technology. What could possibly go wrong?

Since her government managed to hand out tens of billions of dollars in dubious COVID benefits it has no plan to recover and no embarrassment about, the sky is presumably the limit, or perhaps Neptune’s orbit. Thus Freeland told a skeptical Senate committee that “The green transition, we have to act quickly. It is urgent to carry out.” As in we can’t afford not to. Even though it seems to be one of those marvellous opportunities to lose on every sale, in large amounts, but recoup on volume or something: “The green transition will cost a good deal, really a lot, and we need money to fund it”. As Blocklock’s Reporter added acidly, “She did not elaborate.”

Allow us to remedy her failure. If this stuff really is an opportunity, private entrepreneurs should be piling in to cash in. Instead they’re running for the exits. Vanguard, typically, had been trying to have it both ways. Its online corporate bumf included, and still does include at time of writing:

“As an investment manager and the steward of our clients’ assets, Vanguard is duty bound to maximize total return for investors and to ensure portfolio companies are taking appropriate steps to mitigate material risks to those returns. Vanguard considers climate change—and the evolving global policy responses required to mitigate its impact—to be a material and fundamental risk to companies and to their shareholders’ long-term financial success. Accordingly, we have an important role to play in engaging and encouraging real progress by portfolio companies to mitigate the potential consequences of climate change. This is our fiduciary duty.”

And such good PR that they said it twice:

“Building a sustainable future/ We consider climate change to be a material risk to many companies and their shareholders’ long-term financial success. We are committed to minimizing the environmental impact of our operations.”

Uh hang on. Your operations not your investments? Does anyone think financial services are a major source of CO2? If so it simply underlines that no productive activity can be undertaken without reliable, affordable energy. So yeah, you can appease the activists with boilerplate like:

“Our approach to addressing climate change includes assessing how we operate as a company and an employer. With more than 18,000 mission-driven crew members working around the world, we are committed to reducing our global carbon footprint and managing climate-related risks to our operations.”

If however you’re asked to invest in politicians’ fantasies, you duck and cover. And these are fantasies.

Freeland’s huge investment in a non-existent company that would, one presumes, lure Vanguard back in and its $7 trillion or so in assets under management back in where angels fear to tread. It’s like something out of Extraordinary Popular Delusions and the Madness of Crowds. And we mean specifically the 1720 offer, during the frenzied South Sea Bubble, of shares in “a company for carrying out an undertaking of great advantage, but nobody to know what it is”. Which appears to be semi-apocryphal, we note sadly. And also to happening now for real, we note with alarm.

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