How an Organized Republican Effort Punishes Companies for Climate Action
Protesters at the Glasgow climate summit last year. A number of banks, investors and companies pledged at the talks to cut their greenhouse gas emissions.Credit...Kieran Dodds for The New York Times
Legislators and their allies are running an aggressive campaign that uses public money and the law to pressure businesses they say are pushing “woke” causes.
by David Gelles and Hiroko Tabuchi
In West Virginia, the state treasurer has pulled money from BlackRock, the world’s largest asset manager, because the Wall Street firm has flagged climate change as an economic risk.
In Texas, a new law bars the state’s retirement and investment funds from doing business with companies that the state comptroller says are boycotting fossil fuels. Conservative lawmakers in 15 other states are promoting similar legislation.
And officials in Utah and Idaho have assailed a major ratings agency for considering environmental risks and other factors, in addition to the balance sheet, when assessing states’ creditworthiness.
Across the country, Republican lawmakers and their allies have launched a campaign to try to rein in what they see as activist companies trying to reduce the greenhouse gases that are dangerously heating the planet.
“We’re an energy state, and energy accounts for hundreds of millions of dollars of tax revenue for us,” said Riley Moore, the West Virginia state treasurer. “All of our jobs come from coal and gas. I mean, this is who we are. This is part of our way of life here in the state. And they’re telling us that these industries are bad.”
“We have an existential threat here,” Mr. Moore said. “We have to fight back.”
In doing so, Mr. Moore and others have pushed climate change from the scientific realm into the political battles already raging over topics like voting rights, abortion and L.G.B.T.Q. issues. In recent months, conservatives have moved beyond tough words and used legislative and financial leverage to pressure the private sector to drop climate action and any other causes they label as “woke.”
“There is a coordinated effort to chill corporate engagement on these issues,” said Daniella Ballou-Aares, chief executive of the Leadership Now Project, a nonprofit organization that wants corporations to address threats to democracy. “And it is an effective campaign. Companies are starting to go into hiding.”
The pushback has been spearheaded by a group of Republican state officials that has reached out to financial organizations, facilitated media appearances and threatened to punish companies that, among other things, divest from fossil fuels.
They have worked alongside a nonprofit organization that has run television ads, dispatched roaming billboard trucks and rented out a Times Square billboard criticizing BlackRock for championing what they call woke causes, including environmentalism.
These efforts come after years during which many in the financial sector boasted that they were prioritizing environmental, social and governance issues, also known as ESG, rather than pure profits.
That activism has often put companies at odds with the Republican Party, traditionally the ally of big business. In 2015, Salesforce and other big employers threatened to leave Indiana after the state passed, and then quickly rolled back, a law that would have allowed businesses to refuse service to gay customers. Nike faced a fierce backlash for its 2018 ad featuring Colin Kaepernick, the former N.F.L. quarterback who knelt during the national anthem to protest racism and police brutality.
As the signs of a warming planet have grown more apparent over the past five years — in the form of more destructive storms and fires, record heat and drought — and as pressure has grown from consumers and liberal groups to take action, corporations have warmed to the notion of using capital and markets to create a cleaner economy. Faith-based groups, universities and foundations have divested from oil, gas and coal. New York State’s pension fund plans to start shedding its fossil fuels holdings, and Maine became the first state last year to require both its Treasury and its public employee pension fund to divest from fossil fuels.
When President Trump declared in 2017 that he would pull the United States from the Paris climate accord, more than 2,000 businesses and investors — including Apple, Amazon and Mars — signed a pledge to continue to work toward climate goals.
Then, in 2019, a group of senior business leaders promised to redefine “the purpose of a corporation” and prioritize the environment, workers and communities.
And a record number of banks, investors and companies at the United Nations climate talks in Glasgow last year committed to reaching net zero (the point where their activities no longer add greenhouse gases to the atmosphere) by 2050. Several said they saw opportunity in investing in new kinds of technology needed to power an economy that is not based on oil, gas or coal.