Blog Post

Insight: Clearing Utah’s Air

By: Thomas Holst

Note: The opinions expressed are those of the author alone and do not reflect an institutional position of the Gardner Institute. We hope the opinions shared contribute to the marketplace of ideas and help people as they formulate their own INFORMED DECISIONS™.

The Kem C. Gardner Policy Institute this month delivered The Utah Roadmap to Legislative leadership. This study outlines policy options for reducing Utah’s air pollutant emissions and greenhouse gases. Since the study arrived after the 2020 Utah Legislature convened, the Utah Roadmap’s policy options may wait until the 2021 session for thorough discussion by legislators.

However, other options are available to people wishing to promote air quality issues immediately. Mutual funds for which environment, social, and governance (ESG) metrics factor into the investment process are becoming popular with investors. National and local business communities have embraced this shift in investor sentiment to become change agents on climate and air quality.

Nationally, BlackRock, the world’s largest asset manager with nearly $7 trillion in investments, recently announced plans to make investment decisions with environmental sustainability as a core goal. BlackRock intends to exit investments presenting a high sustainability-related risk, while encouraging all companies, not just energy firms, to be aware of their emissions footprint. BlackRock CEO Larry Fink stated, “Evidence on climate risk is compelling investors to reassess core assumptions about modern finance.”

Does BlackRock’s policy shift necessarily mean lower investment returns because their portfolio may be without energy stocks? Not necessarily. Over the last decade, companies in the broad S&P 500 index accrued 13% annual returns versus just 2% for the S&P 500 energy sector. One investment manager summarized the current ESG movement as follows: “You’re not allowed to whine about climate change if you own [companies that create] climate change. Move your money. That is your power.”

Locally, Utah business leaders address sustainability with diverse approaches. In 2017, business leaders signed a letter to the Governor encouraging “strong and ambitious proposals” to address air quality issues. Business leaders noted difficulties in attracting and retaining out-of-state employees to Utah because of poor air quality. In 2020, businesses from Silicon Slopes and Utah Valley are forming a Sustainable Business Coalition in preparation for the 5