Dissension in the ranks amongst ALEC’s board as it voted to pull its model ‘Energy Boycott’ legislation from the organization’s website for additional policy review.
Welcome back to the Climate Nexus finance newsletter – a regular update that looks at the big stories and players at the intersection of climate change, finance, regulation, and energy, with tips for the week ahead.
Enjoying the newsletter and think your colleagues would too? Sign up here!
ALEC split on ESG
Dissension in the ranks amongst ALEC’s board as it voted to pull its model ‘Energy Boycott’ legislation from the organization’s website for additional policy review. The board, which includes 23 state Republican officials, said the proposal didn’t have consensus support, but an American Bankers Association spokesman pointed out that the model legislation “undermined the organization’s own commitment to free markets and limited government” and, if passed, it would be “dictating business decisions to the private sector.” ALEC’s board did affirm its opposition to climate emissions disclosure and support for its anti-ESG state pension model legislation.
Red states still plowing forward
Regardless, at least 34 anti-ESG bills have been introduced in 12 states since the start of the year, with the majority of the GOP sponsored legislation replicating ALEC's model legislation, including energy boycott bills just rejected by its board. The sudden about-face by ALEC exemplifies concerns that state-based proposals are moving forward despite opposition from voters and without a clear understanding of the costs to taxpayers and impacts on public funds and pensions. Some of the most far-reaching anti-ESG legislation has been introduced in Missouri, South Carolina, and Arkansas.
Doubt in Davos
The world’s biggest high-minded conference for jet setters concluded last week, and the start of real action was top of mind for a group typically used to spouting a lot of hot air. The passage of the Inflation Reduction Act, with its hundreds of billions in incentives for clean technologies, vexed several European officials, concerned the incentives would unfairly advantage the US in the race for clean energy.
When not bashing the IRA, attendees took comfort in touting various carbon offset schemes. But the notion they can be used to continue business as usual was doused by not one but two reports last week, noting how forestry replanting is largely ineffective and carbon removal remains woefully miniscule.
Preparing for fake hurricanes
The Federal Reserve released new details on the request for a climate risk analysis from the six largest US banks. Due July 31, banks will need to test worst- case climate scenarios that concern regulators to gauge how the institutions would fare with major climate shocks. But the Fed’s test has many flaws, including not analyzing how banks' climate risks could lead to larger financial losses, and annoying climate scientists by depending on unrealistic climate models.
Where does the dirty stuff go?
Responding to investor pressure, oil and gas corporations are selling emissions-intensive assets to largely privately-owned companies, many of which fail to have comprehensive climate goals. A new report from EDF and Ceres suggests companies selling assets ensure that climate and environmental concerns are incorporated into negotiations, especially in public-to-private transfers. And what fossil fuel firms are selling, private equity is buying – investing billions into dirty energy and acquiring aging oil, gas, and coal assets often through holding companies.
Jan 31:Federal Reserve Board invites public comment on proposed principles providing a high-level framework for the safe and sound management of exposures to climate-related financial risks for large banking organizations with more than $100 million in assets
Feb 6: Ceres and the Environmental Defense Fund host a webinar at 3 p.m. ET with Department of Labor Secretary Martin Walsh and Assistant Secretary Lisa Gomez to unpack the details of the recent final rule allowing ESG considerations in retirement plans, which takes effect on January 30. Register here
Feb 13: The new deadline to comment on the White House’s Federal Supplier Climate Risks and Resilience Proposal. For an overview of the rule and a free template comment letter, check out Ceres’ discussion with Administration leadership and other key stakeholders
Feb 16: ICCR releases its 2023 Proxy Resolutions & Voting Guide. Register here
Thanks for reading! Tips, feedback, or questions? Reply to this email.
– Tan Copsey, Katharine Poole, Steve Hargreaves & Shravya Jain-Conti
Climate Nexus, 322 8th Avenue, Suite 601, New York, NY 10001
