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Writer's pictureNate Baim, MBA, CFP®

Is Climate Risk a Financial Risk?


Enjoy this week's edition of the Planner's Beta


Beta (n) - climber's jargon that designates information about a climb This digest's purpose is to share observations, ideas, and treasures found this week which you may also find insightful. Sharing does not mean it's an endorsement. I am endorsing the pursuit of knowledge and exploration.


Becky, my wife, and I made it out to the Mt. Hood National Forest this weekend for some cross country skiing. It is great winter is finally here for some winter activities!

Something Other Than Finance

Alone and on Foot in Antarctica (The New Yorker Radio Hour) - Winter is finally here in Oregon. Becky and I went cross country skiing near Mt. Hood this past weekend, and we are planning on an overnight camping trip in the snow soon. Although our short trips are nothing as epic as an Antarctic ski trip, our excursion did remind me of Henry Worsley. This podcast is one of my favorites from 2018. It chronicles Worsley's, an ex-British SAS officer, solo attempt to ski to the South Pole and across the Antarctic continent. 


Something About Financial Planning

Student Debt Is Over $1.6 Trillion, and Hardly Anyone Is Paying Down Their Loans (CNBC) - I have seen it before. Millennials have goals to buy a home, start a family, and save for their future. However, they are tied down by student debt. More times than not, they feel a bit overwhelmed and struggling to find a clear focus on how to navigate their feelings and finances. Data shows that only 51% of borrowers with student debt from 2010-2012 made any progress on paying down their balances. Failure to improve student debt balances may result in delays in pursuing other goals. Paying down debt is tough. Be sure to evaluate all your options before taking action. Strategies may include looking for a better paying job or refinancing your loans. Most of all, find an accountability partner and work with someone you trust to help get you on track.


Something About Investing / Economics

BlackRock CEO. Larry Fink: Climate Crisis Will Reshape Finance (New York Times) - Whatever your politics may be, it is a fact the world of finance is shifting its perspective on climate change. A core tenant of investing is pricing the unknown. Investors expect risk in any investment opportunity, and they are continually evaluating whether they are being compensated appropriately for the risks they take. In other words, investors expect compensation for making riskier investments. Large insurance companies are already increasing flood and fire insurance premiums for insuring higher climate risk properties. And last week, the CEO of Blackrock, announced in his annual letter to business leaders, that finance is "on the edge of a fundamental reshaping. " He went on to say Blackrock does not plan to completely divest from companies that are not making sustainability a core factor in evaluating business opportunities. However, Blackrock does plan to begin using sustainability measurements to assess the risk and appropriateness of investments moving forward. Blackrock is the world's largest asset manager. And because of its size, this change in investment policy may influence the cost of capital for "dirty" ventures.

 

Have something on your mind? Feel free to schedule a free call with Nate.

 

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