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.
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Bicoastal battlegrounds
Three New York City pension funds face a lawsuit over alleged fiduciary failures, the accusation stemming from their decision to divest $4 billion from fossil fuels. The plaintiffs, including a subway operator, a teacher, and an occupational therapist, claim this divestment was a misguided attempt to address climate change. The lawsuit is spearheaded by Eugene Scalia, son of Antonin Scalia and a prominent figure in right-wing circles. Both the plaintiffs and their legal representation have connections to a broad network of 'dark money' groups that have been actively opposing ESG investing and climate disclosure.
Meanwhile, on the other side of the country, CalPERS CEO Marcie Frost finds herself navigating similarly choppy waters. Frost, who heads the largest public pension system in the US, is caught in a tug-of-war between political factions over the integration of ESG factors into the fund's investment decisions. A vocal advocate for ESG investing, Frost now finds herself at odds with a California Democratic bill that seeks to bar CalPERS and CalSTRS, another major state pension fund, from investing in the 200 largest fossil fuel companies.
Climate crossfire, political punches at JPMorgan AGM
Ahead of JPMorgan Chase's annual general meeting tomorrow, Majority Action has filed an exempt solicitation calling for votes against two committee chairs at the bank due to their alleged lack of oversight on climate risk, seeking to safeguard diversified investors' long-term portfolio value by challenging the election of directors at companies deemed climate laggards. JPMorgan is also facing a fresh pressure campaign from Republican state attorneys general and treasurers, who have accused the bank of denying services based on religious and political affiliations.
Oil and gas CEOs thrive, workers and communities struggle
A new study estimates that health costs from oil and gas production are $77 billion annually in the US alone. The human toll is far worse—air pollution in one year resulted in 410,000 asthma attacks, 2,200 new cases of child asthma, and 7,500 premature deaths.
Meanwhile, who profits? A new analysis from BailoutWatch shows that workers’ pay fell while top executives’ pay rose at the 15 biggest US oil and gas companies last year, undercutting industry claims of a labor shortage driven by negative publicity and worker disinterest. The CEOs earned 102 times their median worker’s income in 2022, up from a ratio of 98:1 in 2021, with CEOs making $17.4 million, on average, while oil and gas workers received about $170,500.
Oil Supermajors mask carbon footprint
A new report by the Columbia Center on Sustainable Investment and the Sabin Center on Climate Change Law analyzes the trend of the “Oil Supermajors”—BP, Chevron, ConocoPhillips, Eni, ExxonMobil, Shell, and TotalEnergies—selling off many upstream fossil fuel assets, thereby offloading emissions of carbon dioxide and other greenhouse gases from their corporate reports. The report assesses the regulatory landscape around these sales and makes recommendations for how to improve things. Private equity has been buying up a lot of these assets.
House GOP conspiracy hearing
At a disjointed hearing on ESG last week, Alabama Attorney General Steven Marshall kicked off his opening statement by claiming responsible investing is being propagated by an “unelected cabal of global elites,” an antisemitic attack, no less than a dozen times. Republican committee members and their state attorneys general witnesses failed to rebut basic arguments around the massive costs associated with anti-ESG legislation, made unsubstantiated claims that metrics breach fiduciary duty, and couldn’t justify why the freedom for investors to make their own decisions should be restricted, leading many to question the Republicans’ new anti-free market crusade.
