Liberty Energy Inc. and Nomad Proppant Services spearhead lawsuit against SEC's climate rule, revealing deep ties with right-wing efforts to challenge environmental regulations
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.
Enjoying the newsletter and think your colleagues would too? Sign up here!
Frackers vs. federal regulations
One of the two oil and gas companies suing the Securities and Exchange Commission (SEC) over its new climate disclosure rule, Liberty Energy Inc., is a corporation known for climate denial and is deeply enmeshed in right-wing networks aiming to dismantle the regulatory state. The other, Nomad Proppant Services, a private frac sand company, joined the suit as a co-plaintiff even though it will not be subject to the rule when it takes effect. Liberty, which owns a significant stake and exercises certain control rights over Nomad, as reported by Politico, is seeking a stay to halt the rule’s implementation.
This isn't Liberty's first foray into legal challenges against sustainability-related regulations; they also joined a lawsuit against the Department of Labor’s (DOL) 2022 fiduciary rule, which embraced the use of ESG metrics in financial decisions. This legal challenge, spearheaded by the Republican Attorneys General Association with ties to Leonard Leo funding, seemed to have little bearing on Liberty’s operations, as evidenced by its absence in the company’s subsequent financial disclosures. This indicates that Liberty’s leadership deemed the impact of the DOL rule and the lawsuit to be non-material to their business. These lawsuits against federal regulations are widely recognized as part of a coordinated effort by right-wing dark money groups and allies, leveraging courts influenced by Trump-appointed judges to overturn regulatory measures.
Climate cash cow goes dry for US farmers
A new report by the Institute for Agriculture and Trade Policy revealed that an outsized share of the U.S. Department of Agriculture’s Environmental Quality Incentives Program (EQIP) — aimed at climate and conservation efforts — has predominantly been allocated to agricultural practices yielding minimal conservation benefits. Additionally, an estimated two-thirds of applicant farmers were denied access to the program due to high demand. The analysis comes in the wake of the World Meteorological Organization’s ‘State of the Global Climate 2023’ report, highlighting the devastating impacts of unchecked climate change on agriculture, global food production, and prices.
Last year marked the initial allocation of funding from the Inflation Reduction Act (IRA) to support farmers and ranchers in enhancing resource conservation. The report suggests how the program can be improved through the forthcoming Farm Bill to serve more farmers and ranchers in addressing climate change. As the debate over the next Farm Bill unfolds in Congress, these proposed reforms could help meet the demand of producers who are seeking to build necessary climate resilience, reduce emissions, and find climate solutions.
Mississippi melee
BlackRock may get banned from doing business in Mississippi following a cease-and-desist order accusing the world’s largest money manager of “fraudulent” actions regarding its climate strategy. Mississippi Secretary of State Michael Watson believes BlackRock misled its investors by asserting that ESG strategies drive better financial returns without sound proof. He also called BlackRock’s non-ESG funds bogus because the firm “has committed to use all assets under management to advance the environmental agenda of reducing carbon emissions to net zero.” Mississippi joins Tennessee as the second state to pursue legal action against BlackRock over its ESG policies.
We continue to wonder why Republicans demonize BlackRock when its CEO Larry Fink is not their enemy. His annual letter called traditional energy firms “pioneers of decarbonization” and emphasized the ongoing necessity of hydrocarbons.
Global mayors hustle for climate funds
Mayors and governors from 40+ global cities are on a mission for better access to public climate finance, eyeing the World Bank’s spring meeting in DC on April 19–21 to fund their green, urban initiatives. The C40 Cities coalition sent a letter to the presidents of ten global and regional multilateral development banks asking for help accessing public climate funds. Despite cities being home to over half the world’s population and accounting for 70% of its greenhouse gasses, they snag less than 10% of needed climate funds. Freetown, Sierra Leone, a city on the frontlines of climate vulnerability, could see its population double within ten years due to climate-induced rural-to-urban migration. In addition to Freetown’s Mayor Yvonne Aki-Sawyerr co-chairing the C40 Cities group, she is also pioneering affordable adaptation programs to reduce residents’ exposure to catastrophic climate change-charged events like extreme heat.
Best Buy bows to bigots
Best Buy's recent decision to screen its donations to LGBTQ+ causes, as revealed in an SEC filing, came after pressure from the National Center for Public Policy Research (NCPPR), a climate-denying right-wing free market think tank. This move sparked controversy, reflecting a tension between corporate social responsibilities and the demands of certain far-right shareholders. The NCPPR's bullying campaign against Best Buy, in which they threatened a boycott similar to the backlash faced by Bud Light for its inclusive marketing, showcases the challenges companies encounter when balancing ESG commitments with today’s political landscape and coordinated opposition. While some companies like Planet Fitness shrugged off these conservative pressure campaigns, Best Buy buckled. It’s a concerning trend where company executives may feel compelled to alter their public positions and philanthropic practices due to pressure from shareholders with bigoted stances, posing risks to the integrity of corporate commitments to diversity, social justice, and inclusion.