just compete those hopefully have the future but the $500000000.00 that black rock is collecting for climate funds won't go far in solving the world's climate woes. and let's go straight to davos where my colleagues another milan is standing by as an environmental and social sustainability as key ingredients of market economies how the high priests of capitalism gathered in davos this. well they must have known that was coming after all the entire event is called stakeholders for a cohesive and sustainable world so the clue is in the name so all the very welcome efforts but are they the right kinds of effort to make to that end i am joined by professor kenneth rogoff is a professor at harvard university the former chief of the international monetary fund and a former chess grandmaster i hope i haven't missed anything but mr let's jump right in let's start to with this saw with this announcement by black rock and their $500000000.00 equity fund is that a lot of money it doesn't sound like a lot of money for the things they're trying to achieve. was it actually 500000000000 not 1000000

. >> black rocks larry fink warns he may change his investing habits to suit his beliefs about climatee, what impact will this have on his visitors? we'll discuss this coming next. at fisher investments, we do things differently and other money managers don't understand why. because our way works great for us! but not for your clients. that's why we're a fiduciary, obligated to put clients first. so, what do you provide? cookie cutter portfolios? nope. we tailor portfolios to our client's needs. but you do sell investments that earn you high commissions, right? we don't have those. so, what's in it for you? our fees are structured so we do better when our clients do better. at fisher investments we're clearly different. sini wasn't sure...clot was another around the corner? or could things go a different way? i wanted to help protect myself. my doctor recommended eliquis. eliquis is proven to treat and help prevent another dvt or pe blood clot. almost 98 percent of patients on eliquis didn't experience another, and eliquis has significantly less major bleeding than the standard treatme

saying that the likes of credit suisse just funding way too much as far as fossil fuels go the black rockis still waist deep in fossil fuels and that siemens is really not helping the planet all in supporting a stray the biggest coal mine to date one of the biggest in the world a project that will see huge amounts of c o 2 polluting the planet. or i've been physical in davos will come back to him in just a moment. now corruption is a daily part of life in many countries around the world but doesn't have to be that's according to transparency international which has released its new annual corruption perceptions index reports it hopes that by doing so it can draw more attention to the issue. people around the world are showing their rage at corrupt officials and political systems they're protesting on the streets in haiti in lebanon in israel and romania corruption is a problem worldwide say experts no nation is completely free of it the berlin based ngo transparency international ranks countries in its corruption perceptions index on a scale of 0 to 100. the less corrupt a country is seen

now ahead of davos american money management for black rock has grabbed a great deal of the attention of the finance world its c.e.o. larry fisk announcing that the company would quote exit investments presenting a high sustainability related risk in quote for a start to festing hundreds of millions of dollars from coaling to businesses and that could be a big deal black rock is the world's largest fund manager it holds close to 7 trillion dollars in assets to put that in perspective germany's entire g.d.p. for $2800.00 was closer to 4 trillion dollars now managing that amount of money means a correspondingly high level of influence in the corporate world in germany germany alone black rock counts as the biggest single shareholder in the following dax companies siemens buyer among them the question now what could its decision mean for the broader world of finance and for more on this i'm joined by sasha stephan of the frankfurt's group school of finance and management sush it's good to have you with us this would seem like quite a momentous decision from blackrock can you shed some pe

bigger than most european economies if you look over in europe there is a lot of controversy about black rock having so much of a dominant position in places like ireland spain france i think france just they had some protesters stormed the offices of black rock only in the past week or 2 so this is the reality of the amount of power they're getting as this article here and that in bloomberg points out and then finally in terms of this reflexivity of course it's warren buffett value investor who came up with that that number of 100 percent as soon as stock market equals 100 percent of g.d.p. that's perhaps bubble territory that's why he has $120000000000.00 in cash just sitting there well we've never had it so good global equities now worth $88.00 trillion dollars the highest value in history and it equals 100 percent of world g.d.p. so again the reflexive. the prices we're going to start you're going to see i don't know how fast it's going to go but you're going to see more and more people chasing this price higher because they the observer and the observed right and a lot of people do cash

let's kick it off with black rock. we kissed on it in the last segment.have you learned from earnings? >> with assets rising to that much of a record, the big question moving forward is what happens when the markets get choppier? last year we had a good run in s&p and a lot of the black rock assets are equity products and they saw pretty great flow this is quarter into both fixed income and equity products. a question i think people will look forward to is how are they doing in some of their other initiatives like private markets. that is something that's an opportunity for black rock but not a proven bet yet. alix: it dovetails to yesterday in the annual letter of sustainability and black rock at the end of the day can't be superactive and make a ton of changes but if you're an investorened call up and say we have these funds and won't mention straight up the s&p index fund but with asset management can make a difference. >> the eyes are on larry fink because when you're managing that many in assets and control that much of a market, remember the former

where 3 index fund companies control corporate america the largest asset manager in the world black rock with ice shares has 7 trillion dollars under management then guard has $5.00 trillion and state street with s p d r manages 2.9 trillion these companies hold 80 percent of all indexed funds as we cover just recently more more of our of the markets are just passive investors so back in 1907 before the crash you had the emergence of what's called portfolio insurance yes now when i was a stockbroker at the time so i know this quite well so the amount of this portfolio insurance product was sold in many multiples of what was actually supposed to be insured the underlying stocks and when that became clear you had the crash of $87.00 now it currently with these passive investor funds and also e.t.f. exchange traded funds if you have an exchange traded fund that supposed to cover the mining sector and in exchange traded fund the supposed to cover let's say north american stocks they would would both own the the same stock but they don't actually own the shares of the same stock they just own

gary: black rock café, they're falling behind on the payments. lemonis: the people next door?h is that? gary: around $15 grand. lemonis: boy, that's a lot of money. gary: yeah. lemonis: where's all the paperwork? gary: i have it. lemonis: and who's joseph? gary: he's the money guy. he told me they're not making it. lemonis: they're not gonna make it? gary: no. it doesn't look good. he has the money. i think he's made a decision to not put anything more into the place. lemonis: and so he's personally guaranteed this? gary: yeah. lemonis: the owner of black rock café has a $75,000 personal guarantee on this equipment and the lease. what that means is that we can go collect on his personal assets. i don't want to do that. what i actually want to do is come up with a solution that works for black rock and works for swanson's. why don't we maybe see if we can get together with them, okay? gary: okay. lemonis: where is sue, by the way? larissa: she's on her way. gary: yeah, she's always late. lemonis: i'm annoyed that sue's late. she's not committed to the business. she's committed

environmental funds $500000000.00 for sustainable investments and the trillions of dollars that black rock managers will be invested in clean projects. we're going to turn down any companies that don't take long term environmental and climate risks into consideration in their corporate management we take coal mining for example we will withdraw from companies that continue to rely on coal will refuse to take part in those projects 14 blackrock is still one of the biggest investors and coal projects such a huge company changing its policies can have a tangible effect but is this just green washing or a serious commitment it's not something that superficial it's not something that they're doing to greenwash it's something that fundamentally change is their economics and the way they do business if we. actually think about companies that are performing well financially they're also usually the ones that are doing better on environmental metrics and social metrics and governance metrics what would a new sustainable capitalism look like there are plenty of initiatives around the world to help c

of money means a correspondingly high level of influence in the corporate world in germany alone black rock counts as the biggest single shareholder in the following tax companies you have the mole now earlier we talked to sasha stephan off the frankfurt school of finance and management and i asked him how big a decision this is i think it's a big deal that. joins also about companies banks insurance companies and trying to take specific actions were question is on the one hand how they can do words and the other actually going to follow up on that they could as i said divest investments but the amount of. out of the 7b2b actually actively managed rather can actually do that the rest is so-called passive investors and and this is very difficult to divest so another important potentially important activity would be to vote even with these passive stake and say i support these climates nutro a climate from the actions which they actually have opposed during the last couple of years. thanks it's going to finance and management thank you. to munich now where europe's digital independence this o

head of the french branch of the american management company black rock. well critics accused of trying to cash in on the controversial pension changes that are currently being pushed through by the french government. directly benefit from the pension reform. the jets to honor the lead of blackrock france is nothing but an anecdote blackrock is simply the dark side of the pension reform john transource you believe president of blackrock france is promoted to officer of the legion of warner on january the 1st as a reward for pillaging of our pay as you go passions the presentation of the legion of honor it is on france was to release a provocation it reveals the close ties that exist between the graun and the world of finance he's selling the retirement system to american pension funds it's a big deal strikes against pension reform and now into this week it's the longest running strike in half a century across problems people have taken to the streets to let the government know that plans to merge 42 different pension plans into one with you the system at t

in hi influential yearly letter to companies, black rock c.e.o.cynic said climate risk is invtmt risk and every government company and shareholder must confro imate change. he went on to say that the climate crisis will likely force "a fundamental reshaping of finance." the firm indicated it will begin to move money away from havily polluting industries like coal and into others with a greater focus on sustainability. ryan deese ishe global head of sustainable investing for blacki rock and j me now. thank you for doith. because of the enormous ssze of your firm, you have been under a lot of pe to push companies to take a more active stance on climate change, and i know that there's a lot of environmentalists that have celebrated your recent move. help us understand why, now, why did you guys decide to do this? >> well, what we communicated this weekris reallyiven by our increasing conviction around the investment risk that climate change is posing, and, you know, a lot of the way that, traditionally, people have approached investing has assum that

. >> the investment firm black rock manages $7 trillion.kes it the lgest asset manager in the world. now,he firm has announced that environmental sustainability in this influential yearly letter to company, black rock c.e.o. wrote climate risk is investment risk and tha every government, company and shareholder must confront climate change. she went on to say that the climate crisis will "force and . nance." aping of it will begin moving money away from coal and into others with a greater focus on sustainbility. brian dieses the head of sustainability investing for r blackk. and he joins me now. thank you very much for doing this because of the enormous size of your firm. you've been under a lot of pressure to push companies to take a more active stance on climate change. and i know that there's a lot of environmentalists that have celebrated your recentove. help us understan whyow? why did you guys decide to do this? >> wl, wha we communicated this week is really driven by our increasingonction around the investment risk that climate chang

. >>> still ahead, black rock's larry fink says climate change is about to trigger a fundamental reshaping"osg enclin be" meback after this. ♪ ♪ >>> welcome back here's a look at the closing bell big board the main indices on the top, s&p and nasdaq below the flat line a volatile intra day session but we had record all-time closing highs. the dow eeked out a slight gain. the top performers on the second line, pfizer, jpmorgan chase and the bottom performers underneath apple slipping having had a great run, down 1.4% today. >> it is time for a cnbc update with sue herera. >>> a developing story at this hour 17 children and 6 adults are now being treated for minor injuries in los angeles after a delta airlines flight dumped fuel while flying over that school's playground the faa saying that delta airlines flight 89 on route from lax to shanghai declared an emergency shortly after departing l.a.x. as a mentioned it is a developing story we'll give you more headlines when we have them available to us. >>> in washington senate majority leader mitch mcconnell saying the senate's trial of preside

because black rock cares and they got $7 trillion under management i joke about how the issues can'tnto what you're willing to pay for a stock. for decade i quite candidly cavalierly said things like well what does that have to do with the price earnings ratio of bristol-myers? i was con temperature shus of anything that didn't relate to the earninged. for good reason. they didn't care about the stuff. so why should i? but after today, the big money managers do care and that changes the equation, people boards will now ask ceos what they're doing to help save the planet powerful investors like fink will insist on knowing what company's plans are to address climate change they will sell stocks for business that's ignore the issues this is based on steps they have taken to reduce the company's carbon footprint i need to see more companies doing this i got to tell you, fink's actions remind me of those that punished businesses with south africa in the days of apartheid. manufacture us protested against university that's kept endowment money in companies that profited from the apartheid

just compete those hopefully have the future but the $500000000.00 that black rock is collecting for climate funds won't go far in solving the world's climate woes. and some of the other global business stories making headlines truck drivers trying to enter key french ports are finding their way is blocked as part of the country's biggest labor protest and decades the trade union is carrying out a new operation to block 7 large ports until friday as part of the country wide protest against a single french pension system new car sales in the e.u. . forecast to fall by 2 percent in 2020 the 1st drop in 7 years european carmaker 1st trade association says carmakers fully back the green deal to make the economy carbon neutral the auto firms want the e.u. to introduce incentives for low carbon the us. and staying on all 4 tires general motors has unveiled the driverless car that will power its planned autonomous ride sharing services it's been developed alongside honda in an effort to catch up with rivals who are already far ahead. this is the origin story of g m's self driving ride shari

players are really not just compete those hopefully have the future but the $500000000.00 that black rock is collecting for climate funds won't go far in solving the world's climate woes. and general motors has unveiled the driverless car that will power its planned autonomy ride sharing services that's been developed and cooperation with japanese rival honda in an effort to catch up with rivals who are already far ahead. this is the origin story of g.m.'s self driving ride sharing aspirations the rather boxy looking symmetrically designed cruise is supposed to be the future of inexpensive day to day travel safer and better cheaper than whatever entering the room. but cruise has got off to a slower start than collaborators g.m. and honda would have liked regulators a yet to get on board with the $19000000000.00 project cruises still awaiting the permit it needs to do driverless test rights on california's roads however c.e.o. dan ammon is already planning the next steps i am your therapist. thank you very much to speak to me. he says cruz is well on the way to production but hasn't said w

divesting hundreds of millions of dollars from coal lng to businesses and that could be a big deal black rock is the world's largest fund to manage it holds close to 7 trillion dollars in assets and to put that in perspective germany is anti economic output for 2018 was closer to 4 trillion dollars managing that amount of money means a correspondingly high level of influence in the corporate wealth in germany alone blackrock counts as the biggest single shareholder in the following tax companies you have the mole now earlier we talked to sasha stephan of the frankfurt school of finance and management and i asked him how big a decision this is i think it's a big deal here that all joined also about companies banks insurance companies and trying to take specific actions were question is on the one hand how they can do words and the other actually going to follow up on that they could as i said divest investments but the amount of. out of the 7b2b actually actively manage rather can actually do the rest as so-called passive investors and and this is very difficult to divest so another important

environmental funds $500000000.00 for sustainable investment and the trillions of dollars that black rock managers will be invested in clean projects. we're going to turn down any companies that don't take long term environmental and climate risks into consider.

a climate of urgency and that we have to rethink our economic model germany and france joining black rocks. very strange and. exciting move and shift to put the planet and sustainability at the heart of its strategy pledging that it will speed up the funding of projects in developing countries for renewable energies and the like we're also seeing a move by artificial intelligence to save our planet for example a technology being used to track down poachers when it comes to saving the rhinos so watch out poachers many people do feel ai it's something also to marvel. but to talk more about that ok 1st bought a field is here the world economic forum's head of artificial intelligence and machine learning is it something we should fear i mean i just got back from shenzhen in china and was followed around the city by cameras i know my daughter is part of the system now it's unsettling to be followed around by a camera. is it something we should feel it's not something that we should fear but we should be careful about the way we deploy it and say there are a number of things that currently wrong

bank of america goldman sachs, black rock all three under pressure bank of america and black rock bothy. united health down by .5%. right now as we head to a break, a reminder for you you can always watch us live on the go on the cnbc app stay tuned we'll be right back. at synchrony, we're changing what's possible every single day. and if you run a business, that means a lot. we create financing options for your customers. to help them get the things they love instantly. our data provides insights into what your shoppers have already bought. so you can offer them what they might consider buying next. our technology and financial solutions are changing what's possible in all sorts of ways. so, how can we change what's possible for you? high protein. low sugar. tastes great! high protein. low sugar. so good! high protein. low sugar. mmmm, birthday cake! pure protein. the best combination for every fitness routine. and when you open a new brokerage account, your cash is automatically invested at a great rate. that's why fidelity leads the industry in value while our competition continues

deal signing as well as continued momentum for the last couple of weeks it's also a big boost for black rock you heard bob talk about it a bit, the asset manager posting huge numbers for the ourt quarter including an 81% increase in new money flowing into its i shares etfs that my friends more than $75 billion. but it does raise a question, are investors headed for a crash by pumping too much crash into passive investments, >> wasif, i want to start with you, you have a note out here, it says the worm has turned. the spread between the top ten and bottom 490 stocks in the s&p 500 has never been wider the big ten are controlling everything it's great when it's working what happens when investors eventually stop buying those stocks >> well, when that happens the overall market given their weight is going to feel the impact and those stocks are going to decline. >> how much? >> it depends on what the decline is given the weight that they have, the rally they've seen, there's going to be big impact that's why having a risk weighted approach instead of a market capitalization approach is a better

black rock has issued a dire warning on how climate change will upend global finance unit in some expectwe will tell you about the firm's new $7 trillion strategy to address the crisis. shery: let's get started on the with a quick check on the major averages. the dow jones seeing an all-time high, positive bank earning seeking off the season. that is helping sentiment. we are seeing the s&p 500 gaining .2%. the nasdaq also setting records for a second consecutive day. financials and industrials are leading the gains. we have a jump in shares of boeing. the did lose their title as world's largest playmaker to airbus, delivering just 380 jetliners last year, less than , butof airbus' tally shares are still climbing on strong delivery of the 787 dreamliner. the latest headline to drop on boeing was at the company is set for a newoaching citi loan amid the 737 max crisis. leading that talk with a smaller group of banks. the precise structure and timing of the loan is in flux, but the idea could be that it may be an investment grade term loan. amanda: one of the things we've been watching as

secretary of state to my time do you believe it outlines the high market value in france and how black rock wanted a piece of the pie critics say bestowing the legion of honor on black ops manning fronts is a rude for the pillage of the country social retirement system and while blackrock perhaps isn't as well placed as others to take a huge slice of french pension savings it certainly is primed and ready to jump into the market a lot of people are afraid that the complete french pension scheme is going to change that this is just a 1st big step to go to something that would be more of a totally funded scheme which is the contrary what's going on today in france and this is obviously from a political point of view very bad time and the middle of this message strikes which is we're going this is going on for practically or a month records now a lot of that has satisfied a lot of people who are very tired of the strikes from the people say that they won't stop the strikes until the government draws back from its initial it's giving the impression that there is a plan b. that there is somethin

meantime the head of the world's biggest asset management firm is sounding the alarm, black rock's larryrning the financial risks of climate change are bigger than any crisis he's experienced in his career on wall street. he's out with a letter to fellow ceos saying the climate risk is an investment risk listen to what he told our andrew ross sorkin where the fed fits into the picture. >> we don't have a federal reserve to stabilize the world like in the five or six financial crises that occurred during my 40 years in finance. this is bigger, it requires more planning it requires more public/private connections together to solve these problems, and i do believe many of these problems could be solved but the actions have to begin now. >> manages almost $7 trillion and this is a big move forward >> you could imagine that it would be, carl, that it is we've talked a lot about last year, in some ways, it being a wat watershed year esg rose up in this country. europe's been ahead of us in this as being a significant approach, and this certainly ratifies that. at the same time, i have to tell

it executes black rock of pushing for a privately funded pension system in france where retirees willreceive a pension based on what they invest well the government reform plan does not currently include such changes he reallyly has expressd support for them in the past. before se bibible cool frenchch people put a lot of money is on one hundred yards and things that i saw it fourteen julyy sainint louis but i'm worried about that tensions because they still neko individualize retirement savings system on it. for the french government to ellie deserves the legion of honor because of his contributions to french society as a well known businessman. he was the vice chairman of french electric utility company gdf suez established under napoleon inin eighteen oh to the legion f honor is the highest french order of merit and recognizes. both military and civilian distinctions. inferred to those who have demonstrated outstanding merits in the service of the french nation after at least twenty years of activity. second f from the highly anticipated bullfight all seven *-*- spring gore is now

investment will out through traditional portfolios and we're already seeing that trend with the likes of black rock broke the world's biggest wealth fund saying it wants to put sustainability at the heart of its strategy and germany and france the 2 biggest economies in europe joining blackrock just yesterday to say it will also speed up the access to capital to fund these projects speaking. german chancellor angela merkel is due to speak there today. well the greens are also here the green german party and its leader. was saying that the german chancellor needs to drop her obsession with balancing the budget and instead focus on saving the planet she's known as germany's khat chancellor and has been a huge supporter of german industry it's a huge job creator in germany and the car industry is very successful but how green is it well not all that green at all we know about the diesel scandal we know about a shift to renewables in the car industry's shift to electric mobility but it's something that's taking way too long and we're running out of time if you listen to the teenagers here in davos than

corporations another example for you germany and france announcing just today that they're joining up with black rock the world's biggest wealth fund to put money and private investment into projects in developing countries to fight climate change which these developing countries have been asking for for so long for help from the developed world because the developed world has already gone through its industrialization has already polluted the world so much and don't these countries don't want to see the developing ones do the same thing and make the same mistakes so it's all about working together which china has also been touting here exactly it seems john is also pushing its green credentials or green ambitions to do was to florida. well this is interesting especially on the back of the speech from also fund a lion who said it's all about inclusion not exclusion working together no nationalism that will only hold back economies but rather joining up scientists with innovators to create sustainable jobs and europe's green you developments and green new deal will be our new growth strategy or fun th