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Mr. Franz-Josef Schafhausen, former Director General Climate Change, European and International Affairs, Federal German Ministry of the Environment, Nature Conservation, Building and Nuclear Safety

Three things Wall Street can do to show it’s serious about climate change, according to green investor

10th March 2020 by CMIA

Wall Street’s attitude toward climate change has seemed to shift in recent months, but it is far from showing it’s truly serious about sustainable investing, Hannon Armstrong CEO Jeffrey Eckel told CNBC’s Jim Cramer on Friday.

Eckel, whose firm focuses exclusively on investing in climate change solutions, said there are three things the Street can do to solidify its green credentials and usher in a “fundamental reshaping of finance.”

The first, Eckel said on “Mad Money,” is that Wall Street banks and asset managers have to ask, “Is this investment accelerating climate change or slowing it?”

The second is about transparency, Eckel said. He said firms need to disclose every one of their investments. “Not just the investment but the carbon impact,” he said.

Finally, he said every investment should be calculated using a metric called “CarbonCount,” a tool his company developed.

“If carbon counts and capital is scarce, we should be making the most impactful investments, and the way to do that is to measure our carbon count for every investment,” Eckel argued.

Hannon Armstrong makes investments that reduce carbon emissions or allow communities to be more resilient to climate change, Eckel said.

Eckel said he has been encouraged by some of Wall Street’s recent action on the climate crisis.

In January, BlackRock Chairman and CEO Larry Fink used his annual letter to call out the warnings of climate change.

Fink wrote that BlackRock, the world’s biggest money manager with almost $7 trillion in assets under management, will also put “sustainability at the center of our investment approach.”

Just days later, Microsoft said it intended to become carbon negative — meaning it will take from the atmosphere more of the planet-warming gas than it emits — by 2030.

The tech giant also said it would invest $1 billion to help accelerate the development of carbon removal technology.

And this week JPMorgan Chase announced it would facilitate $200 billion worth of environmental and economic development deals and pull back from advising and lending to the coal-mining industry.

Eckel said he appreciates Microsoft’s pledge, as well as the $10 billion commitment from Amazon founder and CEO Jeff Bezos. He also noted his firm has invested $2.5 billion over the last two years.

But given the scale of the threat posed by climate change, the investments remain “drops in the bucket for the amount of capital required,” Eckel said.

Shares of Hannon Armstrong closed Friday at $33.95. Following a tumultuous week for financial markets, the stock sits at 14.9% off its all-time high of $39.91.

That record high came just last week after the company reported better-than-expected revenues and per-share earnings.

Eckel pushed back on the notion that sustainable investing was not financially lucrative.

“Our investment thesis is based in statistics, physics and economics. You don’t have to believe in climate change to believe our investment thesis,” he said. “And it’s a great way to make money,” he added.

Source: http://bit.ly/TranspCarbon