Good questions, but a crucial point he leaves unaddressed is the question of ‘what will happen to the value of his firm’s enormous fossil fuels holdings when awareness of these risks reaches a tipping point, and the carbon-exposed economy is dramatically repriced to the downside? ’ A fiduciary striving to grow his clients’ buying power into the future should be asking that question.
“What will happen to the 30-year mortgage-a key building block of finance-if lenders can’t estimate the impact of climate risk over such a long timeline, and if there is no viable market for flood or fire insurance in impacted areas? What happens to inflation, and in turn interest rates, if the cost of food climbs from drought and flooding?” In the letter, Fink poses serious questions such as these:
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