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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Rich utilities leave people powerless
Utilities cut off power to households over 1.5 million times from Jan-Oct 2022 in 30 states and D.C, according to a report today from the Center for Biological Diversity, the Energy and Policy Institute, and BailoutWatch. A dozen companies were responsible for 86% of the shutoffs, while just 1% of their spending on shareholder dividends could have prevented documented shutoffs. Those same companies spent $2.8 billion compensating about 70 top executives between 2019-2021. Electricity prices are up about 12% since 2021, driven by the Russian war in Ukraine, utilities’ reliance on fossil gas for power generation, and the industry's ability to pass rising fuel costs directly on to customers. One-in-three households couldn’t afford at least one energy bill last year, with people of color particularly impacted.
Big oil buyback backlash
Speaking of shareholders, Chevron prompted backlash with massive share buybacks last week – acquiring $75 billion of their own stock in a record purchase. While the Biden administration argued that oil and gas companies should use the money to drill more (??!?), consumer and climate advocates say not so fast. The IRA included a first-of-its-kind 1% tax on stock buybacks. Senate Finance Committee Chair Ron Wyden last year proposed legislation, the Taxing Big Oil Profiteers Act, which would raise the tax on oil companies’ stock buybacks to 25%. With another big year for oil and gas profits forecast, keep an eye on the balance between buybacks, new capital expenditures incompatible with climate targets, prices, and taxes.
Clean energy spending hits record, no thanks to banks
Money spent on clean energy topped $1 trillion for the first time ever last year, matching the amount spent on fossil fuels, according to a new report from Bloomberg New Energy Finance. China accounted for roughly half of that, with the EU and the US coming a distant second and third. While impressive, the spending represents just a quarter of the amount needed each year to avoid the worst impacts of climate change, according to the International Energy Agency. Also, wherever this $1.1 trillion is coming from, it is not from the big private sector banks. The sector lent just $34.6 billion to clean energy projects in 2021, according to a separate report last week. That number represents just 7% of overall energy lending at the banks, unchanged from recent years.
Hill heats up over ESG
A new House sustainable investing caucus launched last week by Reps. Sean Casten and Juan Vargas to advocate for and defend sustainable investment policies, including ESG. The inaugural Congressional Sustainable Investment Caucus also includes Reps. Bill Foster, Raúl Grijalva, and Emanuel Cleaver, and plans on adding members. The new caucus could soon become bi-partisan as fractures over sustainable and ESG investing grows. New House Financial Services Committee Chair Rep. Patrick McHenry has already distanced himself from the far-right attacks on the $8.4 trillion in sustainable investment assets under management.
Americans for Financial Reform, Public Citizen, Oxfam, Climate Nexus and others will co-host a breakfast press briefing on climate-related financial risk to pensions on Thursday, Feb 9. Panelists include Rep. Casten and issue experts from AFL-CIO, Persefoni, CalPers, and Amalgamated Bank. If you’re in DC and interested in attending, please fill out this form.
Feb 6: CERES Climate and 401(k) Plans: The DOL’s New Rule Levels the Field for ESG with Secretary of Labor Walsh. Register here
Feb 9: Hill Press Breakfast Briefing with Rep. Sean Casten and issue experts discussing the hidden risk to your retirement – climate change. To register,fill out this form
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