If you’re a financial advisor and wondering whether you need to care about climate change, you just got your answer.
Anyone watching the news in January surely heard the sonic boom that is still resounding in the investment community following BlackRock CEO Larry Fink’s 2020 investor letter in which he called out climate change as a significant factor in evaluating a company’s financial outlook. Fink went as far as to say that “we are on the edge of a fundamental reshaping of finance” and effectively used his letter to warn the financial services industry that those who ignore the impact of climate change on the future of investing do so at their peril.
BlackRock wasn’t the only one making waves, as other companies like Microsoft and Starbucks also made major sustainability commitments in the beginning of the year. And who could forget the announcement last summer by the Business Roundtable of leading CEOs that corporations need to not just serve shareholders, but also broader stakeholders including their employees, customers, community and the environment. Climate change has mattered to many of us for a long time, and now it matters to mainstream finance, too.
It is clear financial advisors need to stay abreast of the changing landscape resulting from climate concerns relating to the companies they invest in and shifting client views and questions. So, here’s my quick take on what this means for financial advisors: