SUBSCRIBE TO OUR FREE NEWSLETTER
Daily news & progressive opinion—funded by the people, not the corporations—delivered straight to your inbox.
5
#000000
#FFFFFF
5
#000000
#FFFFFF
mckinsey & company
Capitalism Eating Itself by Fueling Climate Mayhem, Warns Capitalist
If humanity stays on current course, warns top insurer, the "financial sector as we know it ceases to function. And with it, capitalism as we know it ceases to be viable."
Apr 03, 2025
A veteran financial consultant and insurance executive is warning his fellow capitalists that their commitment to profits and market supremacy is endangering the economic system to which they adhere and that if corrective actions are not taken capitalism itself will soon be consumed by the financial and social costs of a planet being cooked by the burning of fossil fuels.
According to GüntherThallinger, a former top executive at Germany's branch of the consulting giant McKinsey & Company and currently a board member of Allianz SE, one of the largest insurance companies in the world, the climate crisis is on a path to destroy capitalism as we know it.
"We are fast approaching temperature levels—1.5C, 2C, 3C—where insurers will no longer be able to offer coverage for many" of the risks associated with the climate crisis, Thallinger writes in a recent post highlighted Thursday by The Guardian.
"Meanwhile in the real world—a capitalist declares that capitalism is no longer sustainable..."
With "entire regions becoming uninsurable," he continues, the soaring costs of rebuilding and the insecurity of investments "threaten the very foundation of the financial sector," which he describes as " a climate-induced credit crunch" that will reverberate across national economies and globally.
"This applies not only to housing, but to infrastructure, transportation, agriculture, and industry," he warns. "The economic value of entire regions—coastal, arid, wildfire-prone—will begin to vanish from financial ledgers. Markets will reprice rapidly and brutally. This is what a climate-driven market failure looks like."
Commenting on the Guardian's coverage of Thallinger's declaration, Dan Taylor, a senior lecturer in social and political thought at the Open University, said, "Meanwhile in the real world—a capitalist declares that capitalism is no longer sustainable..."
While climate scientists, experts, and activists for decades have issued warning after warning of the threats posed by the burning of coal, oil, and gas and humanity's consumption of products derived from fossil fuels, the insurance industry has been the arm of capitalism most attuned to the lurking dangers.
"Here go the radical leftist insurance companies again," said David Abernathy, professor of global studies at Warren Wilson College, in a caustic response to Thallinger's latest warnings.
Despite their understanding of the threat, however, the world's insurers have primarily aimed to have it both ways, participating in the carnage by continuing to insure fossil fuel projects and underwriting expansion of the industry while increasingly attempting to offset their exposure to financial losses by changing policy agreements and lobbying governments for ever-increasing protections and preferable regulatory conditions.
In the post, self-published to LinkedIn last week, Thallinger—who has over many years lobbied for a more sustainable form of capitalism and led calls for a net-zero framework for corporations and industries—warned of the growing stress put on the insurance market worldwide by extreme weather events—including storms, floods, and fires—that ultimately will undermine the ability of markets to function or governments to keep pace with the costs:
There is no way to "adapt" to temperatures beyond human tolerance. There is limited adaptation to megafires, other than not building near forests. Whole cities built on flood plains cannot simply pick up and move uphill. And as temperatures continue to rise, adaptation itself becomes economically unviable.
Once we reach 3°C of warming, the situation locks in. Atmospheric energy at this level will persist for 100+ years due to carbon cycle inertia and the absence of scalable industrial carbon removal technologies. There is no known pathway to return to pre-2°C conditions. (See: IPCC AR6, 2023; NASA Earth Observatory: "The Long-Term Warming Commitment")
At that point, risk cannot be transferred (no insurance), risk cannot be absorbed (no public capacity), and risk cannot be adapted to (physical limits exceeded). That means no more mortgages, no new real estate development, no long-term investment, no financial stability. The financial sector as we know it ceases to function. And with it, capitalism as we know it ceases to be viable.
In an interview earlier this year, Thallinger explained that failure to act on the crisis of a rapidly warming planet is not just perilous for humanity and natural systems but doesn't make sense from an economic standpoint.
"The cost of inaction is higher than the cost of transformation and adaptation," Thallinger said in February. "Extreme heat, storms, wildfires, floods, and billions in economic damage occur each year. In 2024, insured natural catastrophe losses surpassed $140 billion, marking the fifth straight year above $100 billion."
"Transitioning to a net-zero economy is not just about sustainability," he continued, "it is a financial and operational necessity to avoid a future where climate shocks outpace our ability to recover, straining governments, businesses, and households. Without decisive action, we risk crossing a threshold where adaptation is no longer possible, and the costs—human and financial—become unimaginable."
Thallinger's solution to the crisis is not to subvert the capitalist system by transitioning the world to an economic system based on shared resources, communal ownership, or a more enlightened egalitarian response. Instead, he proposes that a "reformed" capitalism is the solution, writing, "Capitalism must now solve this existential threat."
Calling for a reduction of emissions and a rapid scale-up of green energy technologies is the path forward, he argues, asking readers to understand "this is not about saving the planet," but rather "saving the conditions under which markets, finance, and civilization itself can continue to operate."
This disconnect was not lost on astute observers, including Antía Casted, a senior researcher at the Sir Michael Marmot Institute of Health Equity, who suggested concern over Thallinger's prescription.
"It would be fine if [the climate crisis] destroyed civilization and maintained capitalism," Casted noted. "They just need to find a way for capitalism to work without people."
Keep ReadingShow Less
'Woah!': FTC Applauded for Launching Inquiry Into Surveillance Pricing
"Firms that harvest Americans' personal data can put people's privacy at risk," FTC Chair Lina Khan said. "Now firms could be exploiting this vast trove of personal information to charge people higher prices."
Jul 23, 2024
The U.S. Federal Trade Commission on Tuesday launched an investigation into surveillance pricing and requested information from eight companies on the practice.
The FTC inquiry will look at the effect of surveillance pricing—using data on consumers' behavior or characteristics to manipulate the price for them as individuals—on privacy, competition, and consumer protection.
The agency asked Mastercard, JPMorgan Chase, Accenture, and McKinsey for information on the practice, as well as four less well-known companies that service major corporations.
"Firms that harvest Americans' personal data can put people's privacy at risk," FTC Chair Lina Khan said in a statement. "Now firms could be exploiting this vast trove of personal information to charge people higher prices."
"Americans deserve to know whether businesses are using detailed consumer data to deploy surveillance pricing, and the FTC's inquiry will shed light on this shadowy ecosystem of pricing middlemen," she added.
1. Firms harvest a trove of Americans’ personal data, from your browsing history to your biometrics. Now firms could be using this data to target you with an individualized price.
Today @FTC launched an inquiry into these surveillance pricing tactics. https://t.co/G4uc8lHWOV
— Lina Khan (@linakhanFTC) July 23, 2024
Progressive advocacy groups, which have long considered Khan to be one of their strongest allies in the Biden administration, and which argue that discriminatory pricing is unfair, celebrated the FTC's announcement.
"We're thrilled to see the FTC crack down on the dystopian practice of surveillance pricing," Lee Hepner, legal counsel at the American Economic Liberties Project, said in a statement. "It's chilling to think that companies have so much control over our lives that they can leverage personal data they've harvested—including your location, demographic, and shopping history—to turn our habits against us and hike up prices on essential goods. But it's already happening."
Groundwork Collaborative executive director Lindsay Owens also praised the FTC move, warning that "a personalized price might sound nice, but it is actually a three-part corporate strategy to spy on you, isolate you, and overcharge you."
"Today's investigation is an important step in cracking down on the methods big corporations use to spy on consumers to rip them off," Owens said in a statement.
Emily Peterson-Cassin, a director at Demand Progress Education Fund, said in a statement that Tuesday's announcement was "another strong sign that the FTC is fighting for consumer power over corporate power."
Zephyr Teachout, a law professor at Fordham University who has helped lead the opposition to surveillance pricing, reacted with excitement on Tuesday.
"Woah!" she wrote on social media. "The FTC is going there! So excited to see the FTC launching a full study into how companies use data to serve different prices to different people. We know the incentive and capacity is there, but the reality of surveillance pricing has been a triple-locked black box!"
Advocates of surveillance pricing sometimes call it personalized pricing and argue that it efficiently allocates resources. Such pricing questions are the subject of great interest among business school academics, especially at elite institutions such as the Massachusetts Institute of Technology and Harvard University, according to a detailed article in The American Prospect last month.
A crackdown on the practice could conceivably have support across the political spectrum. Stock guru Jim Cramer of CNBC—a frequent and vociferous critic of Khan—praised the FTC's announcement on air on Tuesday, while expressing disbelief that he was doing so.
7/ Even @jimcramer agrees that surveillance pricing is not an honest or ethical way to treat customers.
“How could you live with yourself?” if you’re a business that uses this strategy, he asked this morning.
“That is a great report. I agree with [@FTC].” pic.twitter.com/23HEDk8Yqf
— American Economic Liberties Project (@econliberties) July 23, 2024
All five FTC commissioners, including two Republicans, voted to move forward with the investigation, which will focus on intermediary firms—"the middlemen enabling firms to algorithmically tweak and target their prices," according to a blog post the FTC also published Tuesday.
The requests for information don't indicate that the eight firms engaged in wrongdoing, but rather that they can be useful sources of information, an unnamed FTC official toldThe Hill.
Keep ReadingShow Less
Progressive EU Lawmakers Oppose Former Shell Employee's Bid to Become Climate Chief
"We believe that we have to change the system, not the climate," said one lawmaker. "Wopke Hoekstra's track record represents the system."
Oct 04, 2023
Progressive members of the European Parliament on Wednesday said they would vote against two candidates to serve as the European Commission's top officials overseeing the government's Green Deal and climate action agenda, remaining steadfast in their opposition to the politicians' climate records, conflicts of interest, and statements on chemical regulations and arguing that "people and planet deserve better."
Members of the Left in the European Parliament group said they had voted against Wopke Hoekstra and Maroš Šefčovič in the Committee on Environment, Public Health, and Food Safety (ENVI) on Wednesday morning as the panel approved their bids for European Commissioner for Climate Action and Executive Vice President of the European Commission for the European Green Deal, respectively.
Hoekstra, a former employee of oil and gas giant Shell and fossil fuel-linked consultant group McKinsey, has garnered extensive criticism from the left-wing group and from dozens of civil society organizations due to his employment history.
"We believe that we have to change the system, not the climate," said Left MEP Silvia Modig of Finland. "Wopke Hoekstra's track record represents the system. We stand alongside civil society. Without a sense of urgency, we will continue on the same path we have for fifty years. Emissions will continue to grow, temperatures will continue to rise, and catastrophic climate events will persist."
"To entrust the helm of our climate policy to a former Shell employee, whose career trajectory clearly prioritizes profit over the planet, must serve as a wake-up call."
The full parliament is expected to hold a final vote on the commissioner-designates on Thursday, and with the Dutch Labour Party also indicating it would also vote against Hoekstra, Euronewsreported that "a political veto on either candidate is still possible."
The ENVI committee approved the two candidates two days after they were questioned extensively about their climate records and commitments.
Hoekstra and Šefčovič failed to garner the support of two-thirds of the committee members on Tuesday, as many lawmakers still had concerns about their commitments to carbon emissions reduction targets and other issues.
Hoekstra, who resigned as the minister of foreign affairs of the Netherlands last month, worked at Shell from 2002-04 and at McKinsey for a decade before entering government.
He claimed in his remarks to the committee this week that he now believes "fossil fuels must become history, the sooner the better," and that oil companies that have known about their activities' link to the climate crisis and have "sought to ignore the evidence" are "unethical."
He also promised to phase out fossil fuel subsidies and said he supports a target of slashing emissions by at least 90% by 2040—the lower end of a recommendation made earlier this year by the European Scientific Advisory Board on Climate Change, which said the bloc must cut greenhouse gas emissions by 90-95% by 2040 in order to limit planetary heating to 1.5°C this century.
Despite some of Hoekstra's climate pledges to the committee, said the Left, he "represents the fossil fuel lobby and does not convincingly demonstrate competence as a climate protector."
Hoekstra's bid to lead the E.U.'s climate agenda, said the Corporate Europe Observatory (CEO), represents the government's dismissal of 100,000 Europeans who have signed a petition opposing his candidacy and "is a symptom of a broader systemic issue: fossil fuel influence on our decision-making."
"To entrust the helm of our climate policy to a former Shell employee, whose career trajectory clearly prioritizes profit over the planet, must serve as a wake-up call," said the co-presidents of the Left, MEPs Manon Aubry of France and Martin Schirdewan of Germany. "It extends beyond the immediate concern of Hoekstra potentially reversing climate action; it symbolizes a broader issue of intertwining politics with fossil fuel interests. It's a call to fortify our political landscape, creating a firewall that safeguards decision-making for the greater good and minimizes undue influence of private interests."
The Left's concerns were bolstered last week by a letter to the ENVI committee signed by 50 groups including CEO, Global Witness, and Friends of the Earth International.
The groups warned that as minister of finance in the Netherlands, Hoekstra "pleaded against rapidly ending gas exploitation... despite the massive negative impacts gas drilling had on hundreds of thousands of citizens" and "personally blocked government plans for reducing nitrogen emissions that were aiming to bring Dutch policy measures in line with E.U. legislation on nature protection."
"If we want to prevent and mitigate climate disasters in the future, it is crucial that governments free themselves from the influence of the fossil fuel industry by introducing and implementing a conflict-of-interest framework," said the organizations. "Making a person with strong and long-time links with oil and gas interests responsible for E.U. climate policies is the wrong step."
Šefčovič's answers to the committee's questions this week also left progressive lawmakers dismayed, as he refused to commit to a timeline for toxic chemical regulations and and food sustainability rules.
"The Left does not consider that the commissioner has shown an awareness of the need to accelerate on the European Green Deal by failing to commit to deliver on critical promised legislative proposals in this mandate," said the group of Šefčovič, who currently serves at executive vice president of the European Green Deal, overseeing interinstitutional relations and foresight.
CEO noted that campaigners' objections to the two candidates pushed the ENVI committee to delay its approval this week and to demand transparency from Hoekstra about the clients he worked with at McKinsey.
"Bittersweet win for transparency. Conflict of interests firmly on the agenda," said CEO. "We will be watching."
Keep ReadingShow Less
Most Popular