At the Nation: Blue State Activists are Working to Decarbonize Trillions
And they don’t need Joe Manchin’s permission.
Activists often fight over a few million dollars for local initiatives, occasionally a few billion for a big policy change - and in a generational fight for a hundreds of billions of dollars for programs like Build Back Better.
But today at the Nation, I outline the strategy being pursued by climate change activists to decarbonize trillions of dollars of economic activity - no, TENS of TRILLIONS of dollars. And they are winning because they are marshaling a weapon often overlooked by progressives, namely the trillions of dollars controlled by state pension funds.
Red States are fighting back trying to use the funds they control to support fossil fuel investments but, because red states shortchange retirement for their workers, blue states actually control far more money in this political firefight:
The assets of those who believe in climate change dwarf the assets of those that don’t,” observes David Walleck in dismissing the Texas and West Virginia threats, noting that his organization, For the Long Term, works for 17 state treasurers committed to addressing climate change who collectively manage $2 trillion in assets—and that doesn’t even include New York State, for example, and many other state, city, and country funds allied with his organization’s efforts.
And activists aren’t just working to change how the $5.6 trillion in public pensions are spending their money, but are using their leverage on big asset management firms like BlackRock and Vanguard to demand THOSE companies decarbonize their investments - which adds up to tens of trillions of dollars being targeted in this strategy. The major asset management firms, who hold the retirement savings of hundreds of millions of Americans, now defacto control most major firms:
Many people won’t even recognize BlackRock’s name, but investors know their iShares Exchange-Traded-Funds and other low-cost index mutual funds that sit in their IRAs and 401Ks. Founded in 1988, BlackRock now manages $10 trillion in assets, meaning it could buy Apple, Microsoft, Google, and Amazon outright—and still have money left over to buy Tesla as well. But the nature of its index-fund business means that instead it owns a bit of nearly every major company. BlackRock holds a 5 percent or greater stake in more than 97 percent of the companies that make up the S&P 500 index. Combined with other asset managers like Vanguard and State Street, those three firms control 25 percent of shares voting in corporate director elections at S&P 500 companies.
This is a big strategy piece but it’s also one that focuses on how street action made it happen with a particular focus on New York Communities for Change (NYCC), which organized rallies, protests and die-ins at pension fund meetings until New York City agreed to divest from fossil fuel companies.
Didn’t make it into the article but here’s an infographic worth reading along with the article, since it highlights how pension funds invest in both the major asset management firms AND directly in the $250 trillion in overall financial assets globally. These are obviously big numbers and worth trying to wrap your head around the money flows AND the power that stems from those flows.