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Bloomberg Intelligence with Alex Steele and Paul Sweeney on Bloomberg Radio.
On Today's Bloomberg Intelligence Show, we dig inside the big business stories impacting Wall Street and the global markets.
Each and every week we provide in depth research and data on some of the two thousand companies and one hundred and thirty industries our analysts cover worldwide.
Today, we'll look at how drug makers are being impacted by policy in Washington, DC.
Plus, we'll discuss how one bank is abandoning its net zero financed emission goals.
At first, we begin with the airlines industry. This week, Delta Airlines withdrew its full year financial guidance due to uncertainty surrounding global trade, and this comes despite the airline reporting better than expected first quarter profit.
For more on this and the state of the airline industry, we were drawn by George ferguson Bloomberg Intelligence in your Aerospace, Defense and Airlines analyst.
We first asked George to break down what happened during Delta's first quarter earnings call.
The call wasn't as bad I think as a lot feared. You know, A lot of what we heard was the premium markets are still good. Europe is still good, but they're watching it very closely. Asia Pacific was a good market as well. Non premium back of the airplane travel in the domestic market is poor. And because of all that, you know, they're gonna cap You're gonna flatline capacity, no growth for the second half of the year. So it
sounded like things are okay. Maybe they're okay, but we're watching things very close.
But I remember that Delta and the other US carriers probably several weeks ago cut their guidance. This was before I think an investor conference, so they've already cut guidance once. Here agree, So where are we there? I mean, do you feel like street estimates need to come down.
Here, agreed. Well, so when I looked at the preliminary guidance for two Q, it did seem like street estimates for two Q had to come down, right because Delta gave some pretty broad ranges. But it looks like capacity is going to rise five percent when I look at schedules for them in the second quarter, and they said revenue could be up to to down two and if I did my math right, that means that I think
either way fares are softening again. It's we're definitely working off lower expectations after they cut earnings expectations after the JP Morgan conference. But so Caesar Trappie here, Georgia.
I know every year you take a boondoggle over to Europe, either to London or Parish for these air shows, and this is where these big airlines make place big orders with the airplane suppliers bowing and airbus principally. Are we going to get to a period, George where if they even allow you to go to Paris of the French late let you in, will European carriers buy Boeing planes and vice versa. Will European carriers by or you know, Airbus.
I think they will. I think they will because the queues for airplanes are so long you're not going to get out of the queue you're in and go to someone else's queue and wait longer. You'd have to wait seven eight years for an A three twenty out of Airbus. I think, as near as we could tell from the backlog their show. But what I will tell you about discussions with Ed Bastion about taking Airbus airplanes and who
pays a tariff? And he said he's not going to pay a tariff, and he's not going to take any deliveries or sorry, very few deliveries this year. So it does sound like Delta has a tariff problem and isn't ready to take new airplanes. Now I know, you know their flatlining capacity for the back half of the year, so maybe they don't need them. But if the market was growing significantly right now, I think he'd have a problem.
So you mentioned kind of the weakness Delta was calling out in the back of the plane, maybe some of the more economy prices and seats. So does that mean the discount airlines they're really going to face some trouble.
Yeah.
I mean the funny thing is again when sort of Delta, United and American Ad justin earnings a month ago. The low cost carriers did a little bit, but the moves weren't as great, and the low cost carriers had already been cutting capacity, right if you think about it. Spirit Airlines went bankrupt. They cut forty percent out of their schedule, or something like thirty percent of their schedule. Southwest significantly
slowed growth, they went close to zero. Jet Blue has been cutting and now Delta came in today and said, look, we're going to cut the back half of the year to flat. So I feel like the full service have to make up ground here because they had been growing a little bit too fast. We had seen that at the beginning of the year, we're going to see an earning season. Whether or not maybe low cost got ahead
of the curve here. I still can't believe that Delta can deliver a seat as cheap as a low cost carrier. So I personally think the low cost carriers still have a valid business here and they'll fill airplanes and do okay. But when you get into times of trouble in this industry, Trouble is big in this industry. Right, there's a lot of operating leverage and so we're going to see, right, we're.
Gonna jetfield prices are coming down. I mean they are, That's the thing. Thirty seconds top airline and to manage all of this right now, what do you think.
I'd go with? Balance sheets?
Right?
And that's going to be companies like Southwest and Delta that have strong balance sheets and weather storms.
Our Thanks to George Ferguson, Bloomberg Intelligence Senior Aerospace, Defense and Airlines Analyst.
We move next to the consumer goods industry. This week, Constellation Brands issued downbeat guidance for the year as new US tariffs im muted demand. Way on the beer, wine, and spirits maker.
For more, We were joined by Ken Sha, Bloomberg Intelligence Senior Consumer Products Analyst.
We first asked Ken for his take on Constellation's most recent guidance.
There's so many moving parts to the Constellation storyline here. It's really a challenge of analysts to put it all together. But you touch on the right points, and that is the near term challenge is facing a Constellation and other brewers for that matter, is weak demand. A lot of it is economic. Constellation would also point to their key demographic is the Hispanic demographic, and they're having a little tougher time with the employment situation and slow down, but
they have some longer term threats also. I mean, you have more substitute products. You have legal cannabis. You have the hemp based CBD THHC products that are now down main street. You don't have to go to a dispensary to buy THC anymore, you just go to the local liquor store. You have the GLP one drugs where people are Our studies show that are consuming less alcohol because they're on those drugs. All those things are weighing on the near term and perhaps longer term sales growth potential
for beer. And that's what the anamals are trying to wrap our heads around right now.
What is the price elasticity on alcohol? Can these companies pass along price increases?
Well, it depends on the product pole. The good news among that other otherwise onerous outlook is that Constellation's Corona and Medello brands lead the market in terms of growth. Those products continue to command reamium prices. They're growing faster than the market, so they're they're generating best in class operating margins on those products, but you know, they're not immune to the slowdown, and clearly they lowered their guidance. Well the fourth their fiscal fourth quarter came in a
little better than expected. Some of the concerns out there is they lowered their longer term sales growth projections. Used to be, you know, a high single digit kind of sales growing segment for many years. They came out and said, you know, over the next few years, you're going to see yeah, we're like low single digit. And the analysts
were a little taken aback by that. And to Alex's question before, how much is that near term you know, cyclical economic issues and how much is longer term demographic things weighing on this category? So no one really knows. So we'll find out.
Nobody knows, right, So then what does Constellation do about that? Like, do they go build a beer plant in the US, Do they look for some M and A, do they pair back?
Like?
What do they do?
Well?
They're innovating. I would argue that Constellation is one of the more innovative beer companies. So they're taking that that base of a real good brand family of Corona and Medelo, and they have Pacific go but they also are extending into chiladas, which are very flavorful malt based products. They're getting into the malt based seltzer markets a little bit. They used to do it, but I'm going to come back with a better product. Now they have a no
alcohol version Corona, So it's innovation. I think that they believe can continue to drive sales growth. But there's no silver bullet. I mean, there's no big acquisition out there. I don't believe that they're going to make to enhance their growth. I think they have a good brand and a good asset to grow. But again, you're not going to escape the long term headwinds facing alcoholic products, alcoholic beverage products in general as a matter of fact.
So can you follow the beverages, the tobacco and the cannabis companies? Is there a place to hide in your sector here in a world where where you're going to see potentially slower growth from some of these trade policies.
Well, of the ones you mentioned, Paul, I mean the tobacco, particularly cigarette company lit cigarettes are some ninety percent of that business. Still they are pretty much immune to the tariff situation. It's pretty much a domestic business. Yes, there's some tobacco leaf imports that come in and so on, but by and large that's a domestic business. So if if you're worried about tariffs, perhaps that's a place where can can go in terms of, you know, beyond tariff threats.
Really the soft drink side of beverages is a good place to be. I would argue that even the you know, tried and true carbonated beverage sodas, you know, the diet sodas, are still performing pretty well. They're innovating well. Cure Doctor Pepper continues to come out with new innovation that's moving that category. They're kind of leading that category's growth right now, but they're doing a pretty good job doing it. So that's a good place to go in terms of the
universe that I cover. Cannabis is tough. Cannabis. You know, the regulation on cannabis is not easing. The Trump administration is not being kind to the acadamist industry, and we're not expecting much on the way of legalization liberalization near term, with the exception of some states. Some states will probably continue to legalize, but from a federal point of view, I would wait for the next Administration.
Our thanks to Ken Shay, Bloomberg Intelligence senior consumer products analysts.
Coming up a conversation with Workday's chief technology officer on artificial intelligence.
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We look at research from Bloomberg n EF previously known as New Energy Finance. They're the team at Bloomberg that tracks and analyzes the energy transition from commodities to power, transport, industries, buildings, and the agricultural sectors.
We recently looked at the effect of President Donald Trump's policies on clean energy markets. This week, President Trump announced he's raising tariffs on Chinese goods.
Many critical minerals and energy products come from China and are subject to these tariffs, and that could have a big impact on clean energy moving forward.
Separately, a Trump administration executive order said it's exempting forty seven coal fired power plants from stringent air pollution mandates and the goal is to revitalize the coal industry.
For more on all of this, we are joined by Derek flackl b any F, lead US policy analysts.
We first asked Derek what he makes of the executive order on coal.
Well, the executive order is interesting because this is sort of a replay of what Trump tried to do in his first term.
Right.
He had previously talked about increasing payments to or using emergency powers for preserving existing coal plants, maybe bringing old ones back online, and as we can see from the power generation data, that didn't really work out. Coal is now fifteen percent of generation in the US per year, down from considerably higher levels before. So there's a lot
of different moving parts to this. You might see more say coal exports, more long term gathering of coal leases, which have been sort of moving back and forth from Obama to Trump one, to Biden and now to Trump two. But in general it's hard to say that this will be a huge boon to coal build out or restoration, especially when you have tariffs weighing on any kind of big capital project.
All right, so talk about, you know, the energy ecosystem. Where do we get stuff for the energy ecosystem, whether it's fossil fuels, clean energy, where do we get the equipment and is that something that's going to be impacted by these tariffs?
Oh, very heavily.
Even for fossil fuels, which are often a very domestically extracted resource, there's reliance on steel, luminum, specialized equipment that's imported, which is why you saw the Dallas Fed register such negative opinions about the tariffs coming in generally, more broadly in terms of say solar equipment that mostly comes from Southeast Asia, because we've had batteries, we've had tariffs in China for a long time. Batteries themselves tend to come
from China. Electric vehicles are imported from a variety of places, but especially you know, it's very domestic, with the fair amount of Canada and Mexico in there. And lastly, if you're thinking about say offshore wind, that's pretty dependent on Europe. The only thing that's really effectively on shore and minimally dependent on trade is onshore wind in the US.
What is the future of offshore wind in the US? I mean, if we're talking about ramping up coal and sort of there's zero love from the administration on offshore wind. Have we seen sort of I don't know, leases or any contracts be broken or do you feel like companies that are still are still committed to the longer term world of offshore wind.
Well, I mean what the offshore win companies will tell you. This is a multi year, long term process of building that's beyond any one administration. We have seen one lease be canceled by the federal government for an ongoing project, but generally speaking, we haven't seen a lot more movement for things that have already been permitted and leased. Now that's important because the federal government has a lot of leverage over that process. We're not seeing a lot more
being added to the pipeline. But the real issue is going to come in the form of costs, inflation, and also potentially interest rates. We saw a major slowan an offshore win under Biden, which is a very supportive administration, simply because the cost of inputs went up and as inflation went up. The FED height rates and wind is a very large capital intensive project category and especially sensitive
to those kinds of things. So if the terrorists lead to those broader impacts, we might see some fairly negative results for even the offshore win projects that are already allowed to go forward.
Derek, I think even folks that are you know that question the value of the economic value of tariff in general, they kind of recognize that some of this strategically important stuff maybe that we ourn was strategically important from the pandemic when they trade the cycles were all disrupted, the trade routes were disrupted. That makes some sense. Is a clean energy did they have a focus on bringing this stuff on shore as much as possible.
There's been a lot of discussion of that across multiple administrations. The Bide administration was in favor of that. The Trump administration is in favor of on shory manufacturing generally and of energy security independence, even dominance, as they like to say generally, but that's a hard thing to achieve with
tariffs alone. Ultimately, a lot of the solar factories, battery factories, ev factories that are coming up in the US are dependent on imports, whether those are imports of upstream components or of the manufacturing equipment needed to make the final products solar panels and batteries themselves. And right now we're seeing costs go up on those across the board. Unless you have more reliable revenue streams like tax credits, for example, it's kind of hard to imagine new decisions to build
that stuff out. Even things that are already being built are facing uncertainty not only from the Trump tariffs, from other investigations into tariffs being run at the Department of Commerce and US Trade Representative, but also on the fate of those tax credits, which is going to help guarantee their revenues in the long term.
Yeah, there's a great point which leads us to the IRA, the Inflation Reduction Act, which I mean, clearly President Trump hates that thing, but there are is a lot of value in it through the tax credits and subsidies for companies that supposedly he is a fan of, like the oil industry for example. When do you think we're going to know the fate of the IRA and those tax credits.
That's a great question, and I've been wondering at myself. Obviously, we're seeing a lot of wrangling between the House and Senate about the top lights on their big budget bill they're going to try and pass by the end of the year. Obviously, the end of the year is when individual tax rates go up, and so that's one of
the big forcing functions. You also are seeing the x state the debt ceiling occurring somewhere between July and maybe September, and that's going to be a point where there's going to be a lot of pressure to pass a big budget package, raise the debt ceiling, and probably also get
some of this tax material done. But we've seen a lot of debt lines blown already for when we were allegedly going to get top line packages, which are a preconditioned to figure out what's going to happen what tax credit and we don't even know that yet at this point. We don't even know if they're going to use this particular budget commit called current Policy, which would really reduce
the pressures to cut more. And as they're trying to use that, we're seeing a lot of blowback from physical conservatives in both the Senate but especially in the House, and so we'll see.
Thank you so much to Derek flackl bn EF lead US policy analyst. BLOOMERIG Intelligence recently hosted its fourth Generative Artificial Intelligence conference and there were some great lineups in terms of how you apply and make AI for more.
Alex and I were joined by Jim Stratton Workday, chief technology officer the AI platform. Workday trades under the NASDAK ticker wday.
We first asked Jim where workday sits in the AI space.
Workday builds and deploys and serves enterprise finance and HR for major corporations, for state higher ed for large institutions, and AI really is built directly into the products that we build. So if you think about the different types of workflows around running a business, around running a major business, all of that is right to be infused with AI for automation, for ease of use, and that's really what we're building into.
Pointing now, so to what extent, I guess a lot of US lay people we're trying to get a sense of this is just the next step in the evolution of tech or is AI elite a step function? How do you think about the technology of AI, the compute that it and the applications coming from that.
It is the next step really the next evolution and technology. But I think the leverage that we can get out of AI, it really is a leap in terms of it's in exponential growth, in terms of productivity, in terms of enhancing humans and the capabilities of what we have in the workplace. It really is an exponential leap for us in the technology space.
So give me a use case. So some of your client like GE or Visa, right, I come to you and say, hey, Jim, what are you going to do for me? And how does it help me and make me more productive or something along those lines. What does that use case look like?
So if you think about across I'll give you a couple examples across HR and finance. So think about the recruiting space a talent acquisition. You have in many cases thousands of jobs, hundreds of thousands of jobs that are open across even just the US. Here within a particular company you may be sourcing for you know, ten fifty one hundred jobs or literally thousands of jobs across a large enterprise, and you're getting in some cases hundreds of thousands,
millions of resumes into those jobs. Literally that many resumes, it's really hard to go through and source that. AI is a terrific space, and actually we have a recruiting agent out in the market now that helps significantly with that sourcing problem in terms of weeding through who are the best candidates, what are the best skills, depths of skills,
even some of those skills are hidden. AI is actually really good at map that into a job requisition and saying, you know what, these are probably your top ten candidates, and then handing that off to a recruiter to then go do the human engagement interacting with those candidates and finding the best, the best one, the best fit that's already out in the market. And we're seeing incredible improvements in terms of talent acquisition efficiency, what the recruiters are
able to source, how quickly they can fill roles. On the on the finance side, I'll give you a quick example there as well. Our finance teams and every finance team at every every major company out there spend tons of time pouring over contracts to understand the details in those contracts and how that maps directly into their into
their books, into their financials. AI is fantastic at not only extracting information off of contracts, but summarizing that and actually directly mapping that back into the gl of a company that's also out in the market for us UH and and we're seeing great gains in that in terms of efficiency of what the legal and finance teams can do.
So with what love of confidence can you say that all this money that's being spent on AI is generating a positive return or will generate a positive return in a reasonable time.
Actually, it's a great question. There's a huge amount of money that's being spent just on the pure advancement of frontier models of really research AI, and we are seeing incredible gains in terms of those moving to what we call reasoning models, so the ability to actually think through a problem in multiple steps and then actually go action against that. I think that's going to have really broad application across lots of things, not just enterprise software, but
just how we interact with everything in the world. But directly within the enterprise world. We're now very much focused and I spent a lot of my time talking with CIOs out in the community, and they're thinking about this exactly the same way. It is, how do we we've already spent a bunch of money trying to trying things out, playing around. Now we need to show direct ROI back in those investments. And that's the part where we are
now is the products that are being built. The problems that people like Workday, Companies like work Day are focused on solving are direct ROI. How do we get efficiency back into the business. How do we reduce risk in the business. Those are the primary areas where we're going now.
Thanks to Jim Stratton, Workday's chief technology officer.
Coming up on the program, We're going to break down how drug makers are being impacted by policy in Washington, DC.
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We move next to the drug and pharmaceutical space.
The Trump administration recently rejected a plan to pay for OBCD drugs for Medicare.
Patients may now need to rely on Congress to expand OBC drug coverage, with a potential scale down expansion possibly emerging in a future Republican bill.
For more on this and the latest news in the obesity drug space, we were joined by Sam Fazzelli, Bloomberg Intelligence, Director of Research for Global Industries and senior pharmaceuticals analysts.
We first asked Sam how President Trump projecting obesity coverage impacts that market.
Of course, what happened is that this has been something that was put together in the Biden era in terms of trying to get Medicare coverage for these obesity drugs. Remember, medicare are folks that are over sixty five years old and more likely to be overweight.
Not necessarily right.
But more likely to be overweight and more likely to have issues to do with overweight.
So it's a.
Very important group of individuals to have this products available for. But I think there is a general sense and I think we had expected this, So this is not an unexpected outcome that the Secretary of the HHS Human Health Services in the US is not necessarily a fan of obesity drugs. However, there's a little aspect here that's important. These drugs are also covered by Medicare for those who suffer from sleep apnea and cardiovascular morbidities, those indications, and
that usage has not been withdrawn. It's just the use for obesity that's been withdrawn or at least is not being proposed anymore.
So what I mean, can that be real? That doesn't make any sense to me, And like, the whole point of these drugs is to help obesity. How are they going to keep that distinction?
Yeah, but Alex, not that I'd like to necessarily agree with the kind of decisions that are being made or disagree with them. If you think about it, if everybody who has a comorbidity, for example, cardiovascular disease, kidney disease, sleep apnea, and the only people who are not going to be able to get it other people who just overweight nothing else, that's a little bit easier to swallow than if they were they said, Okay, we're just going
to ban it. Because those elements of protecting patients that is important for health. Now, if these other obius people ended up the ones who are now not being included, just obs and no comobidities having one of these issues, they would be included.
So I think the.
Issue here is some folks believe that all of these things should be solved by eating better. Of course, we all want to do that and not eating too.
Much, et cetera, et cetera.
However, society shows us that that's clearly not possible for a lot of people, and they end up in a situation where they gain weight and they put in more energy and then they spend That's where the problems arise. But so I don't think it's really as bad as it sounds when you first look at it.
Novo Nordisk is down. Is that just the obesity play unwinding for this name.
Well, you would think to yourself, but why would it for this name and not for Eeli living right. We've always believed that Lily obviously has a lot more going on, but we all know that Lily is particularly driven with the obesity aspect.
We also know that the obesity.
Drug from Lily, zip Bound, has outperformed NOVAL noticsts Bigov. We also know that Novo Nordics is based in Denmark, and there's this fight going on between or at least a heated conversations going on between the US administration and the and the Denmark Danish authorities. So I think you can pilo these things up on top of each other and worry about NOVO more than you would about.
All right, fair enough, what about the rest of the sector.
What are what are some.
Themes that are on your mind?
Yeah, so vaccines continue to be a theme on our mind, which, of course there there's there's always words that get that are spoken or statements that are written that seem to suggest.
That vaccines are a good thing.
MMR is a good way of stopping measles, But they don't say you got to go out there.
And get it. That's what's missing.
On the other hand, we also have an issue with regards to what I feel like is a I don't want to call it an attack, but an undermining of research in areas which are infectious diseases, which I just do not understand why a tuber closest expert would lose their funding. These are not diseases that no virus has been annihilated. Maybe smallpox, but I think if you think about it, measles, we didn't have any debts.
We have them now.
As soon as you let your guard down a little bit, it all explodes. So that is I am worried about that because I love the United States, I love coming there, and that is something that clearly is a worrisome aspect for me.
Is it shared to any extent in Europe?
Sam Oh?
I mean, of course vaccine hesitancy isn't a specific US issue. The thing is that what you don't want is that hesitancy to be fed from top healthcare efficients.
Over Here we have that hesitancy.
Don't forget the person who put together the MMR study for and the discredited MMR study and Autism Link is a UK individual but that's been discredited. But the UK government and health services have continued to push that this is the best way to get folks protected.
So it's not. Hesitancy is not just a US issue, it's everywhere. What you need is health officials to be pushing.
It our Thanks to Sam Fazelli, Bloomberg Intelligence, Director of Research for Global Industries and senior pharmaceuticals analyst.
We move next to the banking sector.
Wells Fargo recently became the first bank to abandon its climate goals as political sentiment in Washington, DC shifts.
The firm's abandonment of net zero finance and mission goals puts around five times of one percent of its market value held by ESG and climate funds at risk should investors choose to divest.
And for more, we were joined by Shaheen Contract of Bloomberg Intelligence. Senior ESG strategist refers to ask Shaheen for more context on what Wells Fargo did.
So, wes Fargo abandoned its climate financing goal in particular, So that's the emissions from its loan book. Typically it's a much bigger emissions chunk than it's sort of operations. So just to give you a sense of scale, it's about let'ld say ninety five percent of its total emissions. So that's what well Fago did. Other banks like HSBC have delayed their operational emissions. Again that's about five percent, So that's a much smaller piece.
So how do we distinguish between, you know, headlines where it's like forgetting climate goals and just sort of changing climate goals for some of these things.
Well, you have to dig in. I think it's the difference is again that operation versus financed. It's not as how do I say this as binary? Binary as like diversity where they can dilute the language a little bit. Carbon goales are either there or not there.
It is actually binary.
Are they walking away? Are they saying, we're not going to restrict our lending to companies that have to fossil fuel companies. We're not going to do that anyway.
Correct, So that's in a way what they're saying, because what a finance goal would mean is we're going to reduce the emissions small loone book from X to Z, and that would probably come with reducing to these sectors.
Okay, now, what's JP Morgan, whatis City? What's Bank of America?
Said?
Nothing yet so far, so they have exited the nets zero Alliance. That being said, they've still been on track with their goals. They've still reduced to missions that is in line with their targets. What's also interesting is West Fago has also done that, but it's still abandoned its goals. So what's to come We'll see.
What's interesting talking about abandoning goals like Airbus was just saying that they still want to get to that net zero by twenty fifty, but they're constrained by like infrastructure and technology, et cetera. How much of that is wrapped into the conversation, how much of that is aploaded not them?
So west Fago and his statement actually said that they attribute this to changing custom behavior, to politics, to a number of things. However, given that they're quite on track to achieving this goal, which is also an analysis we've done, we've attributed it to politics.
So the politics in the US are different from the politics obviously in Europe for example. So are we seeing any of the big European companies or sectors of companies walk back some of the ESG goals so in a.
Much smaller way, yes, So again HSBC and UBS have delayed their operational missions goal. Again, that's I would call that almost insignificant for a bank. So they have the bigger pieces of financed mission goals, which we'll see.
So if I'm a shareholder, if I'm an ESG fund and I own Wells fargar, do I just sell my position here?
So it could be at risk. Yes, I mean climate is quite high up in ESG funds agenda, and we've done the analysis. So for Wells Fargo, about zero point five percent of its market value is held in these ESG and climate funds. Honestly quite small, right, So the risk lies in other more expost peers.
So just give me a sense once again. I know we've gone over this number million times how much money is in ESG funds roughly.
So if we look at ETFs, which is the analysis I've done, it's about I would say, close to six hundred billion.
Ok.
Now, let me go back. So I did this analysis two years back. At that point, all ESG label funds was about two point three trillion. So that's to give you a sense of scale.
Now that's really fine in funds funds flowing out of ESG.
No, sorry, So I go back to the two point three trillion number, which is all ESG funds. The atfs are much smaller share, So I would say that we've not done that analysis more recently, but it is two point three trillion is quite large substantial share.
Yep.
When you talk about the amount of assets that are in broader funds, not just ETFs, which is broader funds.
What the numbers that we're talking about here, So that.
Will be the two point three trillion that I mentioned. So this is all funds with words, yes, she climate, et cetera.
Yeah.
I would say a lot of those funds are changing names, so.
Okay, so we don't know if they're going to be labeled that later on down the road.
Okay, okay, what's your biggest call for this industry for this year?
Like, what do you think the biggest change is going to be?
I think, given the recent headlines, I think a lot of it is divestment tists, which I don't think people realize. I don't think people realize ESG investor base that is in a company. So if a company is like State Street, for example.
They've.
Acts the diversity policyes the example, and three percent, well up to three percent of their investor base is actually in ESG funds. So I would say that's quite an exposure.
Our Thanks to Shieting contractor, Bloomberg Intelligence senior ESG strategist.
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