In their August 5, 2022 edition, the New York Times reported that the State Financial Officers Association has been putting pressure on Republican state treasurers, who are responsible for managing their state’s finances, to use their power to promote oil and gas interests and to work against federal government climate change actions. (https://www.nytimes.com/2022/08/05/climate/republican-treasurers-climate-change.html?searchResultPosition=1).  According to the article, nearly half of the US’s state treasurers are on board, using their power to slow or reverse climate action, such as punishing companies that want to reduce GHG emissions, fighting financial climate change risk disclosure rules, and lobbying against nominees to federal posts just because of their climate change views. All coordinated by a national movement.

Republican treasurers in some states are attempting to refrain from investing in businesses that have cut ties with fossil fuel companies, adversely affect relationships with rating agencies that include climate risk in its credit ratings of states, and object to an array of proposed federal rules concerning climate change risk, such as proposed SEC rules on mandatory climate disclosures and decisions on whether retirement plans can consider climate change risk in their investment strategy.

These moves raise the stakes on effective policy and show that even climate change, despite the preponderance of evidence of its cause and effect, is becoming a political, partisan issue. While Republicans do not have the votes currently in Congress to block climate change initiatives, it is hoping to affect policies through the financial markets.

In addition, such moves will come at a financial cost to the particular state and state government. Mandatory withdrawing of funds to support a firm will result in weakening a business within the state and give the state and its residents and businesses fewer places to borrow, leading to higher costs in the remaining institutions. This can also lead to concentrations of companies in “climate-friendly” vs. “climate-unfriendly” states, affecting business growth and development, similar to the controversy about abortion being more or less restricted over a state border line.

Climate change is an important issue. The effects are undeniable and exacerbating situations currently to deadly effect, such as the recent floods in eastern Kentucky. One can have an intelligent disagreement on how to address climate change. But to openly try to stymie all actions on climate change over political power is a blow to our democracy. People should be aware of this and voice their opinions and vote.

This represents CCES’s view on this matter. We welcome to hear from you if your views are different. CCES has the experts to help your company or entity address climate change and reduce your GHG emissions in such a way to benefit you financially, as well. Contact us today at karell@CCESworld.com or at 914-584-6720.