Credit: Climate Action 100

Larry Fink & Jamie Dimon Cave To MAGA Crazies

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Six years ago, Larry Fink, founder and CEO of BlackRock, sent a letter that sent shock waves through the financial community. In it he said, “Society is demanding that companies, both public and private, serve a social purpose. To prosper over time, every company must not only deliver financial performance, but also show how it makes a positive contribution to society. Companies must benefit all of their stakeholders, including shareholders, employees, customers, and the communities in which they operate.”

Jeffrey Sonnenfeld, a senior associate dean at the Yale School of Management, told the New York Times, “It will be a lightning rod for sure for major institutions investing other people’s money. It is huge for an institutional investor to take this position across its portfolio.‘‘ The reason is simple. BlackRock is the largest asset manager in the world, with more than $6 trillion in assets in its portfolio. Fink’s letter suggested that a business that does not serve the community may lose what is known as its “social license to operate.” According to Investopedia:

The Social License to Operate, or simply social license, refers to ongoing acceptance of a company or industry’s standard business practices and operating procedures by its employees, stakeholders and the general public. The concept of social license is closely related with the concept of sustainability and the triple bottom line.

Social license to operate is created and maintained slowly over time as the actions of a company build trust with the community it operates in and other stakeholders. A company must be seen operating responsibly, taking care of its employees and the environment, and being a good corporate citizen. When problems do occur, the company must act quickly to resolve the issues or the social license to operate is put in danger.

Fink added, “Society increasingly is turning to the private sector and asking that companies respond to broader societal challenges.” If a company fails to respond, however, “it will ultimately lose the license to operate from key stakeholders.”

That letter may have been the start of the ESG era in which companies are expected to pay more attention to environmental, social, and governance issues. BlackRock joined the Climate 100 group, which encourages investors to put their money into companies that are committed to becoming net zero by 2050 or earlier. With Larry Fink and BlackRock leading the way, other financial institutions decided to join Climate 100 as well, companies such as Chase Bank, Vanguard, JP Morgan, and State Street Bank.

Red States Take On Larry Fink & Jamie Dimon

That’s when the MAGA lunatics in red states lost their collective minds. They prohibited their governments from doing business with Climate 100 members, even though that meant they paid hundreds of millions more in borrowing costs because they could only do business with second tier institutions. Last March, the attorneys general of 21 red states fired off a letter to leaders of the financial community warning them against pursuing “woke” environmental and social initiatives.

They suggested the financial community might be guilty of promoting a conspiracy, never stopping to consider just how it came to pass that all the attorneys general of all the MAGA controlled states all decided to send the letter in the first place, something that could only have happened if they had engaged in collusion themselves. CleanTechnica readers are all too familiar with the workings of groups like the American Legislative Exchange Council (ALEC) and the Heritage Society, both of which trace their roots to support from fossil fuel companies, especially Koch Industries.

“This ESG nonsense is filtering into a lot of our states and the way they’re doing it is really, really concerning and probably flagrantly illegal,” Montana attorney general Austin Knudsen told Fox News Digital in an interview. “Pushing it through these asset managers and through these proxy votes is extremely concerning. The message is: ‘Stay in your lane and do what you’re supposed to do’. You have a fiduciary obligation under our various states laws to maximize investment. That’s your job. That’s what you’re supposed to be doing. We’re aware of state law and if it needs be, we will defend our state pensioners against anything outside that lane.

“You are … not only bound to follow the general laws discussed above but also have extensive responsibilities under both federal and state laws governing securities. Broadly, those laws require you to act as a fiduciary, in the best interests of your clients and exercising due care and loyalty. Simply put, you are not the same as political or social activists and you should not be allowing the vast savings entrusted to you to be commandeered by activists to advance non-financial goals.”

Fox News reports the Climate 100 members may be “sidestepping their legally-mandated fiduciary duty of looking out for the well being of clients whose money they manage.”

“None of this is financially defensible. Instead, it is a transparent attempt to push policies through the financial system that cannot be achieved at the ballot box.” Oh, the horror!

Larry Fink & Jamie Dimon Fold

Despite any high minded rhetoric about social responsibility, Larry Fink, CEO of BlackRock, and Jamie Dimon, CEO of Chase Bank, this week announced their companies were withdrawing from the Climate 100 alliance, a move that left Bill McKibben shocked and angry. In his latest post on Substack, he writes:

There was no secret what was going on here — the right-wing anti-ESG pro-fossil fuel lobby had prevailed. As Jim Jordan, the chair of the House Judiciary Committee and all-around not-good guy put it, these were “big wins for freedom and the American economy, and we hope more financial institutions follow suit in abandoning collusive ESG actions.”

It’s not clear to me whether Wall Street (Blackrock and Chase are Wall Street) are legit scared of the red state politicians, or whether they use them as a convenient excuse to do what they wanted to do anyway. (In Europe, where there aren’t the same density of bought politicians, banks continue to move the other way). But it is clear that they think the zeitgeist has shifted some. When they signed on to the Climate 100 project, it was at the crest of the organizing wave kicked off by Greta Thunberg. They think that wave is weaker now, and they clearly don’t care that last year was the hottest in 125,000 years. They are the epitome of finance capitalism as suicide machine—a phrase I’ve used before, but I can’t think of a better one. (Emphasis added.)

Eventually Big Oil will lose. But eventually is too late. We’re in a race. The climate is now heating so fast that a muddled and half-way approach to the energy transition can’t catch up. Blackrock’s Larry Fink and Chase’s Jamie Dimon are now helping the fossil fuel industry slow this change, and in the process dooming us to tenths of a degree higher temperatures — and every tenth of a degree moves a hundred million more people outside of a climate zone where they can thrive. They are destructive and dangerous human beings.

The Fossil Fuel Craziness Gets Weird In Florida

The Florida legislature is considering House Bill 1645, which would delete the phrase “climate change” where it is used eight times in current state law. (In seven other instances, it would be left untouched.) In addition, the bill would repeal entire sections of law that mention climate change, such as a grant program that helps local governments and school districts reduce greenhouse gas emissions.

According to the Tampa Bay Times, the bill would also reduce certain regulations on natural gas pipelines, preempt local governments’ control over the location of natural gas storage facilities, and make it so state agencies and local governments no longer have to consider fuel efficiency when buying vehicles, among other changes. Recently we reported on how fossil fuel interests are fighting for local control over solar and wind energy installations. Hypocrisy doesn’t even make these people blush. It’s what they do, all day, every day.

Another provision in the law would prohibit utility companies from supplying electricity to customers who charge their electric cars at home. That provision may or may not make it into the final version of the bill, but it shows the lengths MAGA lunatics are willing to go to in order to suck up to fossil fuel companies.

While running for governor two years ago, Ron DeSantis excoriated the notion that having a social conscious was a good idea. He denounced the term global warming because he said, “What I’ve found is, when people start talking about things like global warming, they typically use that as a pretext to do a bunch of left wing things that they would want to do anyways. And so we’re not doing any left-wing stuff,” which apparently includes restrictions on energy production that might raise gas prices.

DeSantis said the state’s growing population made it more vulnerable to flooding from hurricanes and other causes, and that it was simply common sense to take steps to make Florida more resilient. “I just think that’s the right thing to do regardless. But be very careful of people trying to smuggle in their ideology. They say support our coastline or they say they support our water or our environment and maybe they do, but they’re also trying to do a lot of other things.”

The Takeaway

Fossil fuels are now almost a religion in the minds of extremist right-wing politicians. Could it be because fossil fuel companies donate so much money to get their pet monkeys elected to federal, state, and local governments? The current leader in the contest to pick a Republican candidate for president has said loudly the policy of his government if he is elected will be “Drill, drill, drill.” If that happens, the odds of preserving the Earth as a place where humans can live will fall dramatically.

Will voters choose to join in that suicide pact with eternity? The polls show the majority of Americans are quite comfortable with electing someone who will plant a big, wet kiss on the oil, coal, and methane industries. The world is approaching an inflection point. One path leads toward a vibrant, sustainable future; the other leads to destruction of a livable planet. Please vote responsibly.

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Steve Hanley

Steve writes about the interface between technology and sustainability from his home in Florida or anywhere else The Force may lead him. He is proud to be "woke" and doesn't really give a damn why the glass broke. He believes passionately in what Socrates said 3000 years ago: "The secret to change is to focus all of your energy not on fighting the old but on building the new." You can follow him on Substack and LinkedIn but not on Fakebook or any social media platforms controlled by narcissistic yahoos.

Steve Hanley has 5545 posts and counting. See all posts by Steve Hanley