President Joe Biden kicked off a virtual climate summit on Thursday with a pledge to slash US greenhouse gas emissions by up to 52% below 2005 levels by the end of the decade.
Angel Gurría, the head of the OECD, told CNN Business that the summit, which continues on Friday, is a huge step in fighting the climate crisis.
“It’s completely turning the expectations around, and now with the United States leading the charge rather than holding everything back, this is the big game changer,” he told Julia Chatterley on her show “First Move.”
But will the United States stay committed to the goal, especially after four years of climate denial from the previous occupant of the White House?
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According to John Kerry, the US Special Presidential Envoy for Climate, you don’t have to take the administration’s word for it. Instead, look at the actions of companies and investors.
“There’s a company called Tesla, which is the highest-valued automobile company in the world. Why? All it makes is one product: electric vehicles. That is what is happening. That’s a signal. That’s the market saying, ‘Here we are. This is going to happen,’ ” Kerry told reporters on Thursday.
He’s not wrong. Wall Street and Corporate America are waking up to the climate crisis, and many companies are putting money to work to address the crisis. But there are still huge challenges, and more investment needed.
A record $501 billion was pumped into the energy transition in 2020, according to BloombergNEF. The WilderHill New Energy Global Innovation Index, which tracks shares in 125 global companies that aim to address climate change, hit an all-time high earlier this year.
The flood of money comes as clients push fund managers to create portfolios built around sustainable businesses. Assets in sustainable funds hit a record high of $1.65 trillion at the end of last year, up 29% from the previous quarter, according to Morningstar.
The magnitude of money now looking for a home is also feeding concerns that some will inevitably flow to unworthy companies, reports Julia Horowitz, your usual Before the Bell correspondent.
The last clean energy boom turned to bust. Will this time be any different?
And memories of a previous boom-bust cycle in green investing linger. But can climate progress be reversed? Kerry doesn’t think so.
“These companies have made this critical, long-term, strategic marketing judgment — and that is the way the market is moving — no politician, no matter how demagogic or how potent and capable they are, is going to be able to change what that market is doing, because it will have moved. It’ll have four years of entrenchment. And those jobs will be there,” he said.
