Daniela Gabor on the Critical Case Against Private Sector ESG

always wind about PR people. But half of my inboxes cryptocurrencies experts who want to tell me about cryptocurrencies, and the other is people who want to tell me about some sort of thing with sustainable investing a k A E s G. Yeah. I kind of love how it's two extremes of the Barbell right. It's cryptocurrencies taking up a bunch of electricity and then at the other end,

sustainable finance. But I wouldn't necessarily blame the PR people because there is this huge industry that has cropped up and grown around e s G. For those that don't know, it stands for Environmental, Social and Corporate governance. And I think we've had something like five hundred billion dollars worth of money raised by companies and governments for e s

G projects. We've had more than eight hundred billion flowing into e s G funds, and as our inboxes can attest to, we've had, you know, hundreds of new e s G funds launched recently. There is certainly a lot of money in it. And you're right, we can't blame the pr people. It's not their fault that there's just so much money marketing funds. They're just going where, you know, doing what the clients say is really not the people's fault.

There's a big there is a very big push behind all things e s G, both of the private side companies wanting to make themselves eligible for E s G investing, green bonds, et cetera. Just a huge part of this

sort of a finance conversation right now. Yeah, but I'm kind of glad you brought up the cryptocurrency parallel, because, just like the crypto market, e s G is relatively new and it's sort of finding its footing, and there's been quite a lot of talk about how to align incentives, how to get definitions right, what exactly is a green investment, and in many ways there's a lot of disagreement, and it's still kind of like the wild West totally, and

you know, there's still like there's a lot of ambiguity. It seems like, I mean, part of it is like, well, how much you want to invest with your values? How much is it that using certain E s G screens you can actually do better? Because in theory, the company operating with more sustainable practices could or should some according to some practitioners, actually deliver better returns. What are the trade offs? But I don't think like any of these

answers are like settled science by any stripe. No. But today, in order to offset all the press releases that are floating out there, we are going to be focusing on I don't want to say the downsides of e s G, but maybe areas of potential improvement. Um, that's probably a good way of putting it. And we are going to be speaking to Danielle good Boor. She's a professor of economics and macro finance at UE Bristol and also a

very vocal critic of E s G on Twitter. Daniella, thanks so much for coming on, Thank you for inviting me. So I guess my first question is what's the purpose of E s G Because it sounds kind of obvious like we're going to pour a bunch of money into good or green projects that are going to change the world. But is it that you're supposed to be investing in good companies or is it that you're investing in companies and then trying to engage with them to change their behavior.

So I would say that my interest in E s G comes from observing the broader political context in which E s G investment as a reason in which this wall of the s G funds. To just describe a sort of come about. To describe the political context, I would like to start with a quote from a private equity lobbyist that was discussing the Biden infrastructure plan, and he said something along the lines of this is a very traditional government in spending on infrastructure plan. It's like

an old funded through the government approach. And what we were expecting was Biden to put private finance in the in the driving seat, to partner with private finance through public private partnerships, and to tap into the huge pools of capital, particularly s G capital, standing by and looking

for sort of sustainable investments and sustainable projects. And the way in which this complaint was framed that Biden shows old style government investment instead of a partnership with private finance signals to me the importance of thinking about the rise of E S G and what is the purpose how should we think about its limitations through the lengths of what I call macro finance regimes, that is, the configuration of policies and institutions used by governments, central banks

and private finance to design the low carbon transition, that is, a transition towards a low carbon economy. And I would guess since two thousand and fifteen, the year of the Paris Agreement, and also the year of the Addis Ababa Financing for Development Conference, we have seen what I would describe as two broadly distinctive macro financial regimes that promise to generate investments in the order of about USD five to seven trillion annually that are necessary for the low

carbon future. And there is a big finance regime team and a big green state regime that we often discussed

as a green New Deal kind of arrangement. So when private equity companies and asset managers were complaining that Biden had abandoned about the Biden Plan, they were complaining to me that they had abandoned this big finance regime that was dominant until then in global policy forums like the G twenty, the United Nations, in multilateral development banks, the Conference on Climate Change, the Global Investor for Sustainable Development Alliance,

which was a consensus that private finance needs to needs to be in the driving seat for us to achieve the SDG and the organization commitments by by twenty thirty. So this is I want to stop at this point because I just want to really make sure we stress it.

And this is super interesting. And so what you're describing is that for years there's been this consensus among leaders that when they set out, say like climate goals or other environmental goals, that there's a big role for the finance industry for private money to be employed directed in such a way that it goes towards investments in all these areas, whether it's in technology or something like that.

And perhaps some of the anxiety now as we think about when I guess you could say maybe green New Deal thinking, although there is no green New deal, but green New Deal thinking is much more about let's just have the public fisk, let's just have public spending invest in this. And it's sort of like I guess you could say it sort of cuts out the opportunities in

some ways for private financial profit exactly. I mean, it doesn't necessarily cut them out, because you could say, well, you know, private finance was still by the government, the bonds issued by governments to finance the green carbon transition. It definitely sort of sort of goes against this idea that private finance needs to be in the driving seat, an idea that that comes with the E s G push over the last five to seven years. So what's

the implication of that. Are you suggesting that as more of these projects are undertaken by governments, does that mean that the E s G pool is going to start shrinking or there's going to be fewer opportunities or is it still just going to keep growing as we described in the intro. That's that's a very interesting question in the sense that it very much depends which avenue governments will decide to take, whether they go for big, big

public investment, which I I somehow doubt. I think the by the Infrastructure plan is is somehow an oddity in sort of uh in high income countries, I would guess, especially after the COVID nineteen crisis there is because we still rely very much on this powerful macro fiction of the last fourth years that governments have limited fiscal space and that it should not rely on independence cent central

banks to maintain borrowing costs. Law. Then the idea, the question comes, if governments cannot produce the trillions in green investment, these have to come from somewhere else, and that will be private finance. And that's where you get the sort of back of the envelope calculations that you were described earlier, and they run something like this. You have thirty three and eighty trillions U S dollars in financial assets worldwide.

Around the hundred trillion belong to institutional investors and asset managers, and probably thirty trillion more or less have already a sustainability level label attached to them. So five to seven trillions annually. It's not at large, but what it requires, and I think this is very important to bear in mind. What it requires is for private private public finance to crowding private finance. In other words, for the state to

help private finance invest in infrastructure projects. And this is I think an important political project that goes hand in hand with the rise of V s G S because it says that when the state has to de risk investments, particularly infrastructure investments for private finance, and that goes into steps one is to allow private finance to identify sustainable asset classes via E s G metrics and then to de risk private flows into the E s G sort

of sustainable assets. Right, and to give you the example of the G twenty infrastructure as an asset class, which the Biden administration is already supporting through its International Climate Finance Plan, the idea and the G twent infrastructure as an asset class is that the private sector does not build ports or high speed trains, or renewable energy plans or hospitals because there are very important risks to projects

cash flows. There might be sufficient demand, there might be currency depreciation, climate risks, fossil fuere subsidies for the poor. To what the state needs to do is to step in and to de risk the public private partnerships or

these partnerships between the state and private finance. By assuming risk the demand falls or the few your governments might increase policies like minimal minimum wages or new climate regulations such as an increase in carbon price, and I think this to me, this turn towards the state as an instrument of the risking for private finance explains to a significant extent that dramatic growth that we have seen in

sustainable finance products in the last years. It's a it's a global political appetite for a market driven approach to development and to climate. This is this is super fascinating already. I mean, I'm thinking, you know, like one of the themes that we talked about on this podcast a lot is like, are we sort of like entering a I

guess post neoliberal period and thinking about the economy. And we've talked about it a lot with monetary and fiscal policy and this idea of handing off control of the economy from the technocrats at the central banks to the politicians, uh and the government, but we haven't really explored it from like the climate angle. But it really is the

same conversation. It really dovetails with this very nicely, this idea that yes, there were these climate priorities that many governments and large companies had set out, but it was very much done within this framework of yes, but it's we're gonna it's we're gonna turn it into a market opportunity.

And so this choice, as you as you put it, this choice to de risk the projects of sustainable finance for the private sector is what is this sort of like seed or the kernel for what is this omnipresent boom in I guess s G investment vehicles? Yes, I would very much agree in the sense that I think if you, if you trace the importance of h G in general is that it is a private taxonomy for identifying green or sustainable assets and in a sense distinguishing

them from from dirty assets. Right. There are a couple of issues to consider there. I think one is that, although we tend to applaud in some ways, the fact that technocratic central banks or at least working closer with governments in order to design, say the green transition or to to respond to the COVID nitey in pandemic. To me, the question is when government technocrats to sort of take over.

Do they take over to design public investment in green infrastructure and green industries, or do they take over to design and to negotiate the risking in public private partnership contracts. And there are very different physical implications for both, and In this one of the papers that I've written on what I call this Worlds three consensus, I look at the hidden physical costs of the riskings and they can

be quite significant. We have examples in the European Union, we have examples in because trees in the Global South, like like Nigeria Orghana, where we can see that it doesn't sort of relying on the private sector to drive the sustainable agenda doesn't mean that the state is not putting fiscal resources on the line. It is in a sense and the risk to me there is that it's sort of privatizes profits and its socializes laws. Daniel, can

you explain that a little bit more? How does the government de risking the space actually results in fiscal expenditure. So let me give you, for example, the example of ghanas some COFA offshore gas project where the state signed a public private partnership contract with a couple of French companies. And in that in PPP contract there is a very clear specification of who assumes what risks and the state assumes.

For example, in this contract Demander skin that says that it car is a level of cash flows for the private investor Stern for the private operator in the case of this Ghanian project, because the state agreed to do risk and demand or in other words, to provide a guarantee, then according to the i m F, it now pays about five hundred million annually for power power generation capacity that it cannot use because the infrastructure the greed is

not performed enough to sort of absorb this. And there are many other examples in PPP contracts everywhere, because the logic is, if you want to direct or to escort private finance into sustainable assets, you need to change the risk reworld profile right to align it better with their

preferred the risk reward profile. Then the state says, okay, I will guarantee a certain level of demand I will pay, or if a future government decides to, for example, increased minimum wages, or if it decides to put a carbon price, the state absorb some of the risks of the private investment in order to guarantee a constant stream of cash flow. Well, why is this not just a problem of making these guarantees better, demanding more demanding, you know, setting the standards

for what the projects need to accomplish. I mean, it seems like it's it's easy to imagine bad projects where the state comes in and create some buffer de risks for the private sector, and then the private sector doesn't deliver. Why not just get better at making sure the private sector delivers better if it's going to be eligible for

these sort of guarantee the backstops of the state. I think that's a that's a very legitimate question, and historically the critic towards these the risking PPPs has come from from the empirical reality in the European Union and in countries around the world that have been used p pps

for infrastructure investorment. Remind us what p P stand for, a public private partnership, right, it is the kind of it is the kind of arrangement that black Rock, for example, uh called for the Biden administration to use in order

to involve the private sector in infrastructure investment. And the experience with p pps in Europe and elsewhere is in general an experience of a lot of very high costs for the state that would have in other words, that it would have been cheap or if the state did it by basically spending directly, as the Biden administration plans

to do with its infrastructure plan. So that's one issue us it has been very costly for for the public purse, and I guess the second issue is, as you describe it, Joe, well, maybe we can find a better way of governing these projects to make sure that the distributions of risk works better, and the World Bank has done a lot of sort of efforts into that direction, but to my mind, we haven't had yet a successful or many successful examples where,

particularly in the Global South, but also in Europe where these distribution of risks work works better for the public person. That's one thing. And the second one, which for the europe euro European audience perhaps it resonates better, is that once you organize public services through p pps, then basically you're saying that the users have to pay a fee

in order to access them. And that is the case for highways, that is the case for trains where it's but it's also the case for health services, for education, for nature as an asset class. The idea is to

use these PPPs everywhere. So in a sense there is also a question of the public good here, whether the government governments around the world are not equipped to provide or to meet at a social contract with its citizens by providing good quality public services through public investment as opposed to imposing user fees and UH and the risking typically investments there the more important sort of the bigger issue and brings ads back to the way the topic of the S G S. I think there is also

a question of systemic greenwashing that that the rises with this kind of the risking parodigm. I wanted to I wanted to pick up on exactly this point because you mentioned this idea of the technocrats stepping in and de risking E. S G. And Joe described how one of our big themes for the year is this idea of a bigger role for the government um in terms of

fiscal stimulus and everything else. But another theme, or a sub theme of that, I should say, is that the devil is in the details, right, And even if you agree that the government should actually do more designing, that policy can be fraught with loads of disagreements, and it can be very difficult and maybe even not as efficient or productive as it should have been. So how is

that playing out in the E S G space? So I would say, in the space it plays out, and I think that they in the technocratic detail is very important. It's it's crucial is who decides or according to what rules or taxonomy is we call them taxonomy is in this space, according to what taxonomy is do we decide whether investments and products or green or or dirty. And there is a broad agreement in regulatory circles that industry led s G approaches open the door too systemic green waship.

That is, in a sense, maybe if I give you the example of Total, the French oil and gas company, because I think it's a powerful example. If you take sustain Analytics, which is one of the s G which is one provider of e s G ratings, Analytics rates Total as having e s G risks at a medium level. It rates Exton high and Chevron as having severe e s G risks. And if you look at Total, well you'd say it has a nature based solution unit that promises to invest in natural carbon scenes in order to

sequesters or two from its operations. Right. However, if one looks closer at what Hotel has been doing over the last few years, then this rate ranking of medium e s G risks looks to me a lot like green washing. For example, in Congo, Total wants to exploit oil there, and it says well, in order to compensate, we will

create a natural carbon sing of forty thousand hectors. But this involves first destroying a local natural savanna ecosystem and replacing it with what non native trees I think acacia trees that can be commercially exploited. So if you're an institutional investor, right then you hold Total shares or bonds, you can say, well, this is a company that is carefully planning its transitional to fossil fuels because of stain analytics,

s G ratings tells me so. But what I see is that Total probably use is it's green finance ratings in order to as a cover to burn more fossil viewers while destroying local forests for commercial exploitation. And I think that brings me to the idea of this double materiality that we that not we, but regulators discuss when

they talk about taxonomys of green and dirty finance. And the idea of double materiality is that the climate crisis poses risks for institutional investors, right and in this case, Total looks looks looks less risky for the institutional investor because of its sustain analytics s G rating. But when that investor decides to include totally its portfolio, what it does, in fact is it lends to a fossil fuel company that is worsen in the climate crisis. So totals actions

in Congo are making the climate crisis words. And that is the the idea of double materiality that has been at the core of regulatory debates. And I think I don't think it can be solved by relying on private metrics like s G. It needs a ablic that son on me. It needs the technocrats to say this is

green or this is sustainable, and this is not. I just want to very briefly, this is so weird because I have like this very brief story, which is like I studied abroad in a spring of two thousand in Geneva, and that was like the peak of like neoliberal optimism in the world is all gonna be great and and

geos and stuff. And I actually, uh did a like little paper for like my semester on tensions that were emerged would emerge between at the time the Kyoto Protocol about climate change and the Convention on Biological Diversity and exactly what you described, and I never thought I would think about that, like little like paper that I wrote at the end of my semester of my sophomore year

in college about that. But I'm glad to see that actually twenty one yeah, twenty one years later, that that is actually relevant and I kind of understand that tension between decarbonization and damaging sort of natural ecosystems. I guess that's just a comment, but I'm not thank you for bringing that up. I never thought I would think about that. Again, Thank you, Joe. Yes, I guess regulatives think think about this another sort of more sustained basis, but maybe you

should send them your age. I'm going to come in with a question now, which is which? Actually I'm just going to repeat my first question because I think this gets to the point Danielle is making about, you know, the need for someone to decide what actually is green and what isn't. I think it comes down to confusion over exactly what E s G is supposed to be.

So getting back to that first question, is it supposed to be that you're investing in good companies or projects or is it supposed to be that you're engaging with, you know, maybe polluting companies in the hopes that they change their behavior. I don't think we've figured out out yet.

I think it depends who you ask, right, I think for for the governments and regulators in general, the idea is, and you can think about the European Union Sustainable Finance Initiative and the taxonomy that comes with it, the idea is that they would like investors to think about the ways in which they're lending to companies may have an environmental impact, or may have or or may reproduce or accommodate corporate practices in uh sort of social and governance

areas that are not aligned with the public standards. So so, to my mind, for regulators, it is important to accelerate the shift in financial flows away from carbon activities towards green activities. Now, what does that mean in practice? And that goes to your second question is should we rely on on these investors to sort of try to this

link corporations. I think that's a more difficult question to answer, because it is true that we have seen experiences every here and there, and there is a lot of public pressure from civil society organizations to make sure that for example, black Rock flex is its muscle in order to make sure that the companies where it's a shareholder or where it holds shares on behalf of its investors improve their practices.

But to me, the question that raises then is if investors have to assess the E s G behavior on the basis of private ratings, is it possible to have arbitrage in the sense of you can go and choose a highest rating from whichever provider gives it to you, and there are some perverse incentives in there, and then you don't have to do very much right And and that somebody who believes that the climate crisis is very real, I am concerned about the idea that we we have

to rely on private financial institutions in order to drive our climate agenda and to ensure the corporations go towards low carbonativities. Awareness of climate change, discussion of climate change these days is at extraordinary levels, has talked about all the time, literally every day, pretty much. How much of that has been driven by the fact that profit motivated companies have had an incentive to put this out in

the public consciousness. I mean, you mentioned black Rock. You know there's numerous companies that see big dollars in this had it not been for the huge profit motive, could it be possible in your view that in the year we wouldn't be talking about climate as much. I think we have to recognize that the private financial institutions have taken on the sustainability agenda in in a sort of comprehensive way, and and it to to some of the

it has been surprising. But I would I guess sort of the big public pressure comes from, you know, young citizens everywhere in the world mobilizing in the Fridays for future and governments responding to this public pressure to act on climate. So I wouldn't say that it is the private financial sector that sees profit making opportunities that has been driving it, but there certainly are responding to what they see as a future where the state might possibly

become much stronger in flexing its green regulatory muscle. And and here where the question of green washing becomes even more important, because I can see that in the near future governments will will go away from or will move beyond what we have now as the status quo, which is in the Central Banks Task Force for Financial Disclosure, for example, the status quo is we have to ask

for disclosure of climate risks and for disclosure of exposures. Okay, but I guess a year from now, our two years from now, if you look, for example, of the European Central Bank, who is undertaking a review you of its monetary policy operations, you could see a state that says, I'm going to increase capital requirements on dirty assets you're holding, or I'm going to subsidize green assets by reducing capital requirements or reducing haircuts on the collateral that banks are

using in order to borrow from central banks. So in a sense that the rise of edg its is not simply about profits, but it's also about a strategic positioning to respond to what I think is very possible a future where central banks in particular and regulators are taking the question of green washing more significantly and the question of green carbon bias in their own own operations more seriously.

Because that's a future where if you are not able to provide some sort of green label for the assets that you're holding, it might be much more expensive to hold them, or you might end up with a lot

of strended assets. So how do you actually build a consensus around green labels and the actual definition, because it does feel like we are in this weird moment where a lot of governments have recognized that climate change is a concern and clearly something needs to be done about it, but there does seem to be very very little official consensus around what exactly those policies should be and what

a green investment should actually look like. Yes, that is a trillion dollar question in some ways because it points to the political difficulties in agreeing on say a global level. But even if you look at the European Union and the European Union level, the European Union for a while sort of itself as a leader in the green finance agenda, particularly because the Trump administration wasn't interested in participating, right, So they said, okay, we'll come up with a public taxonomy,

the sustainable finance taxonomy. This will identify activities that are sustainable, and then we will use will take this at a global level and create some form of coordination that says this is a public standard of green, and it's it's not supposed to be a public standard of brown. Because the European Commission has parked the question or sorry, what is what are the activities it sort of doesn't deal with it for for now, but at least it says

this set of activities are green. But if you look at the political debate and negotiations around the European taxonomy over the last couple of years, your question Tracy becomes very relevant because what we have seen is conflict between member states of what kind of activities should receive the label green and and most recently a civil society organizations that were involved walked out because the European Mission, at the pressure of several several members states, said that he

was contemplating including natural gas, which is a fossil fuel, as a sustainable activity, and that is sort of stretching it by miles in terms of credibility of a public taxonomy, and that is an strategic opening, I guess for for private E s G ratings, because you know, at least private finance can produce some some ratings and some risks. And yeah, if you have in house E s G desks, and most large institutional investors would have them, you can

do a lot of due diligence. So in I'm not very optimistic that there will be a sort of public,

global public standard. This is super interesting to me. I mean, I keep seeing in this conversation parallels between thinking about sustainability and climate and the environment with the discussion of say like inflation and labor and the handoff from central banks to governments, because you know, I'm thinking about like in the one of the critics of sort of like post Kanzian economics, and people will say, well, you know, like maybe are maybe the traditional models for forecasting inflation

are really terrible, but at least we have models. At least we have models, and uh, you know, that's sort of the critic. At least we have something that on paper looks very elegant about some trade off between employment

and inflation. And it kind of feels like there's like something similar going on with thinking about a sustainability where you can say, okay, well, the private sectors matrices for thinking about what's sustainable they don't really work, they're not very good, but at least they exist and at least

there's something on paper that everyone can look at. Whereas when we try to like get to something that's like seemingly more democratic, we know that the existing models don't exist, but sort of governments have a harder time even putting something on paper even if what the private sector makes

doesn't work. Does that make sense that that parallel, I mean it does to me in the sense that this is in the in the case that you described around inflation, we are seeing sort of old orthodox is dying so kind of slow for our taste, whereas in in the

sustainable finance space there is a new orthodox emerging. But the political momentum, or the ability of elected politicians to provide public solutions is not has not sort of materialized yet, so to me in a sense the question of will we have a lot of a lot more E s G over the next years, Yes, definitely a lot more there will be, I guess better, at least for the

European Union. The European Union now has a directive for disclosure, where if you want to sell the financial products as environmental or social, you need to provide a narrative of

what they call principal adverse impacts or pies. I think it's quite funny that that they are described like that, But what they say is, well, you need to convince us that your E s G products or true truly s G. So there is more scope for sort of monitoring closely the extent of greenwashing, so you don't buy s gds that have Chevron or or to telling them.

But whether that is ambitious enough for the scale of the low cartment transition, I am a bit skeptical, right, Well, Danielle, it's sort of been a disheartening subject to talk with you about, but I suppose it is an important topic. And this idea that even though we agree something needs to be done on climate change, we haven't actually agreed on the individual policies is very very critical to actually doing something about it and getting it right. So thank

you so much for coming on. Thank you. It was a pleasure to bring not so good news, but there is always optics some reality and that was great. That was the best, most interesting conversation I've had about E. S. G Ever and I in all seriousness, and it's actually really helping me like think about this, and I really do think the sort of like parallels and the expectations of this sort of last several decades and how that's informed are thinking on financing climate initiative. It's just like

a very useful framing. So that was great, great, Thank you, so Joe. I think the fact that we managed to have an interesting conversation about E s G is sort of an accomplishment in its own right because a lot of these sorry, a lot of these takes are really repetitive though, and sort of make the same point over and over and over and are very press release ee. But you're absolutely right, there are tons of overlaps between what's happening in E s G right now and that

big theme of you know, the handover to government's overall. Yeah, you're just thinking about like this expectation that's existed for so long that like markets must play a role, that like sure, governments can have initiatives and goals and endeavors and all that stuff, but that you know, ultimately markets must be our vehicle to get there, and how embedded

that is. And then when you like sort of like okay, we're gonna address climate change, we're going to have this backstop then for market investors, and then we're gonna have this versioning moment, it really makes sense why ultimately that led to our clug inboxes basically, Yeah, And in the meantime, it does really feel like we are sort of in this awkward phase where we have a patchwork of regulations

which leads to a bunch of different incentives. And I have to say one of my favorite examples of that um I think it was from City Group back in ten maybe, but they were looking at funding costs for European energy companies and they found that they were on average more expensive than US energy companies because European investors cared more about E s G. And we're punishing the

European energy companies. So that's like a skewed outcome, right, The US energy companies who are doing less for clean energy get rewarded, while the European companies who are actually trying to do something end up getting punished because Europe and the US are sort of on different speeds or different levels when it comes to E s G. You know, one of the things when we talked to Stephanie Kelton about m M T and the one of the points she made, which I think is very powerful, is not

that like it changes the politics per se, because different

political factions have different priorities. But we can have a more honest debate if we sort of recognize that the constraints on government spending aren't what we were told, and so you can sort of like tell this story and Danielle have basically said it where if everyone believes that, okay, there is this sort of like strong limit to what governments can spend, then you basically have to create a big role for private capital in financing UH sustainability initiatives

and private markets. But if you if you remove that expectation and you sort of say, you know what, the government actually has a lot more fiscal flexibility than we thought, you can start to conceive of investments into sustainability, into climate that are totally public focused, where there's not as much fear of like, oh where is the money going

to come from? And I do think you see this shift then, which you know, you get from like this sort of like the E s G Thinking to the Green New Deal thinking, which is very much about just put it on the government's balance sheet. And you can see then why private actors would be very anxious about it. You know, there's black Rock on one hand and then there's Greta the teenager talking about climate on another hand.

But you could kind of make the argument that it isn't this sort of like continuous thing, it's actually like a very like big break. It's sort of like rethinking it and this sort of like the Greta vision is much more threatening to all the money in the space the teenager talking about climate that's how you describe. Yeah, yeah, well, I mean like it does feel like it's a break right,

Like it's like a different thing. I totally agree. And the interesting thing now is going to be to watch, um, what actually happens to the E S G industry in private finance that has cropped up. So you know, do they partner with governments um in the way that Danielle was describing, or do they start shrinking and these hundreds and hundreds of new funds find themselves squeezed out by public investment or does some fun just pay Greta a bunch of money and we get a Greta. It's yeah, Uh,

that would actually work, wouldn't it. You could even have Greta as the ticker. Okay, Well, on that note, uh, should we leave it there? Let's leave it there. This has been another episode of the All Thoughts podcast. I'm Tracy Alloway. You can follow me on Twitter at Tracy Alloway and I'm Joe Wisn't though. You can follow me on Twitter at the Stalwart and you should Follow our guest on Twitter, Daniello Gabor She's at Daniello Gabor, and

follow our producer Laura Carlson. She's at Laura M. Carlson. Follow the Bloomberg head of podcast, Francesca Levi at Francesca Today, and check out all of our podcasts under the handle at podcasts. Thanks for listening, a