Cracks in the anti-ESG foundation

Jan 24, 2023 View in browser   By Debra Kahn and Jordan Wolman THE BIG IDEA There's little evidence the anti-ESG mantra is winning over voters. | John Raoux/AP Photo ANTI-ESG TIGHTROPE — There's not much evidence that voters care about Republicans' latest bogeyman, but the GOP is still slapping more papier-mâché on the anti-ESG piñata. Federal and state lawmakers have introduced at least 34 anti-ESG bills so far this year, according to the communications firm Climate Nexus. Republicans plan to keep the focus on the issue through the 2024 campaign, and the drumbeat is accelerating: Just last week, Florida Gov. Ron DeSantis approved changes prohibiting the state's retirement system from considering ESG factors, and Montana Gov. Greg Gianforte barred the state's investors from advancing ESG principles. Some observations that may help you parse the growing outrage on Fox ("How did Larry get to Davos, by the way? In his solar jet?"): — Keep it simple, stupid.  Republicans know the typical conservative voter isn't distinguishing between BlackRock's policy of weighing environmental, social and governance factors in making investment decisions and general grievances about "woke" corporations. There's some recognition within Republican circles that while criticism against ESG is likely to intensify, the messaging may not resonate with voters. "It's important to talk in more broad philosophical strokes because there are people who will not appreciate the specifics," said Adam Geller, founder and CEO of the Republican polling firm National Research Inc. "It's part of a long list that Republicans would point to that says Democrats are out of the mainstream. It's part of the stew that Republicans can utilize, but it's not the issue." — The vanguard is conflicted.  Yes, certain governors, attorneys general and treasurers are riding the anti-ESG wave as far as it will take them. But board members of the right-wing American Legislative Exchange Council, which disseminates model legislation to state houses, are split. They voted on Friday to reject a proposal that would give state lawmakers a template to stop doing business with companies deemed to be boycotting fossil fuels. It's a policy that some states like Texas have already signed into law, and which new research shows could be costly for municipalities. The ALEC board — which includes Republican lawmakers from 23 states — voted in a closed-door meeting to send the bill back to the group's energy task force for further review instead of adopting it as official policy. — The silent majority may speak up soon. Business trade groups may not be publicly sticking up for BlackRock, Republicans' main punching bag. But State Street CEO Ron O'Hanley is pushing back, telling the Financial Times, "It's become a convenient way to distort the facts and win votes." And the American Bankers Association spoke up against the ALEC bill last week. "Government should not be dictating business decisions to the private sector, which is what the draft model policy proposed," an ABA spokesperson said in a statement. And to the extent the anti-ESG push is bleeding into broader climate policy, it's going to butt up against Republican support for renewables and electric vehicles, which is very much a thing. Two-thirds of the 30-some major clean-energy projects that have been announced so far on the back of the Inflation Reduction Act are expected to be located in Republican-held congressional districts, Kelsey Tamborrino and Josh Siegel report. There are signs that moderate Republicans are getting fed up. "At a high level, clearly this is something that's getting a lot more attention from every side," said Rich Powell, CEO of ClearPath, a nonprofit cleantech advocacy group that's gaining traction with conservative lawmakers. "Clearly, this term and the application of the term has gotten really political. And it's time to figure out a way to depoliticize this and get back to basics on a lot of the principles behind it."   JOIN POLITICO ON 2/9 TO HEAR FROM AMERICA'S GOVERNORS: In a divided Congress, more legislative and policy enforcement will shift to the states, meaning governors will take a leading role in setting the agenda for the nation. Join POLITICO on Thursday, Feb. 9 at World Wide Technology's D.C. Innovation Center for The Fifty: America's Governors, where we will examine where innovations are taking shape and new regulatory red lines, the future of reproductive health, and how climate change is being addressed across a series of one-on-one interviews. REGISTER HERE.     Sustainable Finance MURKY MARKET — The State Department, Rockefeller Foundation and the Bezos Earth Fund are working on a way to harness corporate contributions toward climate finance for developing countries. The three parties put out a set of principles last week showing that they expect corporations to help replace electricity generated from fossil fuels with renewable energy in developing countries. Companies will be able to get credit for two types of activity: Closing fossil fuel power plants and building renewable energy facilities that replace polluting sources. Questions abound, including whether the projects will be considered carbon offsets, Jean Chemnick and Sara Schonhardt report for POLITICO's E&E News. There's also an inherent tension between quality and quantity: If the projects are too expensive to implement, companies won't want to pay for them. "[I]f this is really meant to be a very high-quality project, then it will presumably be a higher-cost project, and there might be relatively fewer buyers," said Danny Cullenward, policy director at Carbon Plan. "Conversely, if they maybe don't do as good of a job on the quality side, they might hit a price point that would be more attractive to more buyers, but it might look more like some of the questionable projects that are out there." BROWN ASSETS — A new paper from the International Monetary Fund examines the risk of carbon-intensive assets becoming so devalued that they shut down early and make the energy transition bumpier than intended. The paper proposes creating a secondary market for these "brown exposures" that will help banks make room for more green investments. (H/t Antonia Zimmermann) Movers and Shakers RMI TO NSC — Sarah Ladislaw is joining the National Security Council this week as a special assistant to the president and the senior director for climate and energy, Daniel Lippman reports. She most recently served as a managing director leading the U.S. program at the Rocky Mountain Institute and previously served at CSIS, where she was senior vice president and director for the energy security and the climate change program, and at the Department of Energy. Ladislaw will replace Stephanie Epner, whose next move remains unclear. YOU TELL US GAME ON — Welcome to the Long Game, where we tell you about the latest on efforts to shape our future. We deliver data-driven storytelling, compelling interviews with industry and political leaders, and news Tuesday through Friday to keep you in the loop on sustainability. Team Sustainability iseditor Greg Mott, deputy editor Debra Kahn and reporters Jordan Wolman and Allison Prang. Reach us all at gmott@politico.com, dkahn@politico.com, jwolman@politico.com and aprang@politico.com. Want more? Don't we all. Sign up for the Long Game. Four days a week and still free! WHAT WE'RE CLICKING — An environmental activist in Georgia is dead after a clash with state police in a forest outside Atlanta, E&E's Marc Heller reports. — The wind industry is expanding so fast that turbines are breaking down in spectacular fashion, Bloomberg reports. — Thinx's settlement over PFAS in period underwear is scaring people off of its product, the WSJ reports.   LISTEN TO POLITICO'S ENERGY PODCAST: Check out our daily five-minute brief on the latest energy and environmental politics and policy news. Don't miss out on the must-know stories, candid insights, and analysis from POLITICO's energy team. Listen today.       Follow us on Twitter Debra Kahn @debra_kahn Greg Mott @gwmott Jordan Wolman @jordanwolman Allison Prang @AllisonPrang   Follow us

To change your alert settings, please log in at https://www.politico.com/_login?base=https%3A%2F%2Fwww.politico.com/settings This email was sent to rouf@idiot.cloudns.cc by: POLITICO, LLC 1000 Wilson Blvd. Arlington, VA, 22209, USA Please click here and follow the steps to unsubscribe.