Lying To Our Faces: The Prevalence of Greenwashing in Finance

The Ethical Dilemma of Investing

Everything is an ethical dilemma these days. At least for me.

I wanted to continue along with the discussion series that began with Shopping By The Masses, For The Individual, and then continued on to The Intersection of Ethics and Consumption: A Manifesto, which was published earlier this week. Long titles FTW.

It’s important to note that without the help of my “editor”, Sam, I would be pretty lost and honestly pretty wrong in all this. He is the real MVP and it’s exciting to learn about these processes with him.

As a refresher, in the aforementioned blog, I primarily focused on Costco and some of the more problematic aspects of that company. And keep in mind, this isn’t from the average consumer’s mind. Not to be, “I’m not like the other consumers,” or anything but, I’m not like the other consumers. This is all stemming from someone’s perspective that may or may not be entirely clouded by environmental conservation concerns.

Unfortunately, at this point I can’t even see the forest for the trees, I’m only ever consciously aware of the systemic problems that have arrived as a result of overproduction and overconsumption, and late-stage-capitalism.

Some of the biggest points I spoke about before are:

• We live in a throwaway society, where nearly everything is disposable and that’s just the way things are. Don’t question it
• Individual consumers are powerless to change American industries and their constant wasteful productions without the help of a governing body and as a result:
• It’s become necessary that the government regulates the output of items and packaging made up of plastics and other non-sustainable products in the market.

But in contrast to the idea of packaging, let’s talk about investing, and effectively, putting our money where our mouths are.

What is Black Rock?

Black Rock is an international investment management corporation.

ELI10: They take your money and give it to companies so that those companies can make money.

ELI5: They’re a bank. Not for individuals like you and me, but for larger corporations.

I’m explaining this because I expect my readers might be some level of uninformed (just like me), and not really understand this financial mumbo jumbo.

Now knowing this small foundational information, if you’re investing your money in a company like Black Rock, the point of the matter is:

Who are they giving your money to?

You have to be very deliberate when putting your money into one of these investment banks in order to ensure it doesn’t go towards non-environmentally conscious firms and companies. Why is that?

Setting an example: Black Rock Style

Because of the massive gravity this company holds in the financial world, they have the ability to not only set trends, but end them as well. Black Rock made a public statement in 2019 where they declared they will no longer be investing in companies who do not represent sustainably sound values.

At first I thought that this statement was really interesting, really inspiring actually. This feels like a win, right? However, despite their public announcement, if you take a look further you’ll see they’re massively invested in some of the largest fossil fuels companies. Uh oh.

Are they bullshitting and/or is this a media scam that’s meant to push a positive message, albeit hypocritically?

This, my friends, is an excellent example of greenwashing. Basically, suggesting the company and/or their products are more environmentally-conscious than they really are.

There are two different ways to look at this situation.

1. Black Rock is intentionally misleading the public.
2. Black Rock is going out of their way to push other companies towards a “more sustainable” future.

So the best I can do to summarize is just to declare this as a “gray transition period”. Or would it be better to be labeled as a “green transition period”?

I believe they’ve competently devised a way to set a new standard across the board, which encourages other companies to take steps in the right direction towards renewables (for example). While companies bandwagoning into more environmentally-conscious territory is a good thing, is it okay that they’re still invested in less than savory companies from the past? Is it okay that they’re trying to be better?

Have I seen greenwashing anywhere?

We saw a lot of greenwashing right after Biden was elected.

Remember the Keystone Pipeline sh*tshow? The companies that were frothing at the mouth to lay claim to the pipeline’s spoils, only to back off as soon as Biden took office? What a f*cking pathetic act of obedience and desperate dash to become the “Teacher’s Pet”. woof.

Energy companies like Shell, Exxon, and Chevron had already anticipated Biden coming down on them for their haphazard and/or intentional polluting habits and illicit labour practices, so they started their process of investing in companies with more sustainable alternatives.

I don’t want to sh*t talk too much, because honestly, it makes sense. And at the end of the day, they’re moving in the right direction.

These corporations would rather be seen as “team players”, and moreover, intentionally and enthusiastically choosing to be part of the change (even if it’s just a show of greenwashing) instead of getting reprimanded by the government.

I spoke about this in a previous blog generalizing sustainability methods, too, about how no matter what marketing efforts a company may put into the illusion of “going green”, it means nothing if they install recycling bins within their facilities and call it a day.

In the long run, it means nothing if they don’t listen to feedback to fit the consumer’s needs. It means nothing if they don’t put their money where their mouth is.

So are Black Rock’s practices good or bad?

This issue lies in the eyes of the beholder. However, a previously stated link would suggest no.

Is greenwashing that simple of a process? How long will the duration of the “gray transitional period” last?

Do you consider environmentally-unethical investments in the past something that should be forgotten if a company is now making efforts to invest in a “greener” future?

Nevertheless, it’s more important than literally ever to invest in “green” or environmentally-focused stewardship companies within the stock market. It’s one thing to support the companies occasionally by shopping at Whole Foods and buying items without plastic, but entirely another to be financially invested in them.

At the end of the day, it’s not Black Rock’s “job” to save the world — broadly speaking — by way of promoting more sustainability-oriented companies, they’re here to make money and make the rich richer.

Despite that, now that they are publicly being monitored to live up to the standard that they have instated; they absolutely cannot get caught investing in coal plants, oil, or any of the other worst-of-the-worst companies.

Just to put things in perspective, fossil fuel companies are effectively making changes:

“Just enough to not piss off any hippies, but enough to still make money.”

- Sam (my editor and econ consultant)

If we think about this from a fiduciary angle, I think we already know they are going to continue investing in what’s most profitable, potentially intending to bend the rules in the future as to what constitutes as “sustainably sound values”.

With new rules attached to the process of investing, however, yes we will see a change (although potentially/probably at a snail’s pace). And that’s the hardest part of this whole f*cked up process: waiting on the results we needed yesterday, when we’re already running short on time.

Hang on tight for just a little longer everyone!