December 5, 2022

Hi and 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. 

Climate Nexus has just launched a daily finance monitor featuring media from the prior day related to sustainable investing, ESG, and related issues – as well as a look ahead to important dates and campaign activities. Please sign up for the monitor here. 

Florida’s Chief Financial Officer Jimmy Patronis pulled the largest sum to date ($2 billion) from BlackRock over the firm's sustainability and ESG initiatives. Not only is BlackRock continuing to buy up dirty energy, but last week its CEO Larry Fink said he believes “we’re going to need hydrocarbons for 70 years.” Meanwhile, BlackRock’s climate-concerned clients represent $3.3 trillion in Assets Under Management, 1000 times more than Republicans have pulled from the asset manager.

BlackRock was the only firm targeted among the state’s external asset managers, ten of whom are also signatories to the United Nations Principles for Responsible Investing. Florida follows several other red state boycotts and legislation that have attempted to penalize firms for sustainable investing, a move Wharton estimates may cost Texas over $500 million in higher interest payments. What’s behind Florida’s fervent anti-ESG posturing? Governor DeSantis’ energy donors might help explain it.

Despite the moves in Florida, over 60% of Bloomberg terminal users said they expect sustainable investing will continue, with the majority of them noting it improves corporate financial performance. And after months of being overshadowed by anti-ESG rhetoric, sustainable investment advocates are starting to push back, including in a letter from 17 state attorneys general to a group of senators expressing support for the investing strategy. 

Republican state attorneys general filed a frivolous motion with the Federal Energy Regulatory Commission against Vanguard for ‘bullying’ electric utilities by investing in them. Reality check: Vanguard has the worst climate target of the major asset managers. Consumers’ Research went even further, suggesting Vanguard, State Street, and BlackRock are part of a green energy cabal harming fossil fuel companies. The move has been widely panned as a messaging stunt that is nothing more than a distraction to the real issues facing utility companies in transition.

• One of the world’s most important financial institutions is not holding back on carbon-intensive crypto. According to the officials at the European Central Bank, “The apparent stabilisation of bitcoin’s value is likely to be an artificially induced last gasp before the crypto-asset embarks on a road to irrelevance.” Read their blog here. 
• New research by the Private Equity Stakeholder Project finds that six of the seven existing operational gas export (LNG) terminals are backed by PE firms. 

• The National Center for Public Policy Research (NCPPR) filed a shareholder proposal at Levi Strauss & Co, which asserts the company’s political and charitable giving activities are contributing to a wave of “smash and grab” robberies that will destroy our civilization to appease “woke, liberal activists.” How will they do this? By giving money to the ACLU apparently. The company is looking to get the proposal thrown out. (hat tip to Heidi Walsh at the Sustainable Investments Institute for this one). 
• Shareholder Resolution at CenterPoint Energy asking for Scope 3 emissions disclosure | As You Sow – expect more of these resolutions this proxy season as shareholders ask harder questions about emissions. 
• New global initiative launched to align and refine ESG terminology. View here. 
• Market Reactions to the Inflation Reduction Act and the Need for Climate-Related Financial Disclosures | Americans for Financial Reform – The IRA needs a climate-competent SEC to work properly.
• Who pays the Bill for Climate Change?| The Daily (Podcast) – episode on Mia Mottley and the Bridgetown Agenda to reform global climate finance and help developing countries borrow money at lower rates. 

• December 6: Ceres hosts a webinar diving into the results of the 2022 Climate Risk Scorecard. Register here.
• December 7: The American Enterprise Institute (AEI) hosts a webinar discussion of the proposed Securities and Exchange Commission rule on the enhancement and standardization of climate-related disclosures for investors.
• December 20: Federal Insurance Office Climate-Related Financial Risk Data Collection comment period closes.
• January 31, 2023: Deadline for public comment on proposed Federal Reserve Board principles on the safe and sound management of exposures to climate-related financial risks for large banking organizations. The proposed principles would apply to banking organizations with more than $100 billion in total assets and address both the physical risks and transition risks associated with climate change and be relatively wide ranging. The Fed is following the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation in getting real about climate risks.

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– Tan Copsey, Katharine Poole, Steve Hargreaves & Shravya Jain-Conti