Welcome 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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Rumors and nastiness
News broke last week that the Securities and Exchange Commission’s climate disclosure proposal circulated among commissioners was significantly weaker than the initial draft, removing key disclosure and transparency requirements supported by 97% of investors. Taking the palace intrigue at face value, Scope 3 emissions requirements were dropped, Scope 1 and 2 rolled back to materiality standards, and reporting and verification requirements for publicly traded companies were weakened—all a potential compliance conundrum in itself. If a weak final rule is indeed on the horizon, it represents a huge victory for the fossil fuel-aligned U.S. Chamber of Commerce, Farm Bureau, and other business interests that sued to block similar transparency requirements in California and spent millions lobbying against it.
It is still unclear if the Chamber and others will sue the SEC, regardless of the strength of the final rule. Similarly, will congressional Republicans mount a repeal effort regardless as well? If history is any indication, expect bothefforts to move forward, no matter what’s in the final rule.
Premium pandemonium
The average cost of homeowners’ insurance in the U.S. jumped 23% in 2024, reaching $1,759 per month for $250,000 in coverage, based on recent data provided by Quadrant Information Services to Bankrate. The increase is nationwide, affecting not only usual high-cost areas like Florida and Louisiana, but also states like Colorado, Kansas, and Nebraska. Further, these averages fail to fully illustrate the severe financial strain placed on households with less income and wealth.
Communities that are low-income or were subject to historical redlining are facing the brunt of the negative physical and financial impacts resulting from disasters, including practices like insurance bluelining (read about bluelining from Americans for Financial Reform here). This phenomenon exacerbates challenges for these households, potentially affecting their ability to meet mortgage payments and maintain the property insurance their lender requires. These challenges can lead to an accumulation of consumer credit card and other debts as households struggle to cover insurance deductibles, disaster repair, and recovery. For lenders, this could mean a higher risk of default and delinquency rates on mortgage, auto, or other payments. (h/t Jessica Garcia, AFREF, jessica@ourfinancialsecurity.org)
Ancient investor Warren Buffett doubles down on fossils
Billionaire investor-icon Warren Buffett, in his closely-read annual letter to shareholders, doubled down on fossil fuel investments while praising Vicki Hollub, the CEO of Occidental Petroleum, in which his company owns a 28% stake. Buffett’s Berkshire Hathaway expects to “maintain indefinitely” its OXY stake, he wrote, adding, “We particularly like its vast oil and gas holdings in the United States.” And he shouted out Hollub, writing that under her leadership, “Occidental is doing the right things for both its country and its owners.”
That’s debatable. Occidental has paid out more than $5.4 billion in environmental fines and settlements since 2000, including a $3.5 million civil penalty last year to the EPA for Clean Air Act violations.
Even while singing Occidental’s praises, Buffett could not avoid dinging the company’s Direct Air Capture initiative, which seeks to trap carbon directly from the atmosphere. “The economic feasibility of this technique has yet to be proven,” Buffett wrote. One thing that makes it appear feasible: The DAC plan would be heavily subsidized by taxpayers under a giveaway to fossil fuel companies under the Inflation Reduction Act. Hollub herself called DAC “the technology that helps to preserve our industry over time” at an industry conference. “This gives our industry a license to operate for the 60, 70, 80 years that I think it’s going to be very much needed.”
More energy sanctions against Russia
February 24th marked the two-year anniversary of Russia’s invasion of Ukraine, and the White House announced a new package of sanctions targeting Russia’s energy exports, as did the G7 over the weekend. Since the start of the war, the country has earned $650 billion from exporting fossil fuels—over a third of which has come directly from the European Union and G7 nations. In comparison, five oil “super-majors” have earned a record-breaking $218 billion in the same period due to dramatic increases in energy prices and household bills.