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| | | | |  | | By Debra Kahn | | | | | 
Anti-ESG crusaders may be costing red-state retirees. | Spencer Platt/Getty Images | THE COSTS OF INTRANSIGENCE — Anti-ESG advocates argue that paying attention to environmental, social and governance issues is turning capitalism on its head. But evidence is mounting that the attempts to evade ESG investing are costing taxpayers and public pensioners a lot of money, Avery Ellfeldt reports for POLITICO's E&E News. Kansas Republican lawmakers are proposing a bill to prohibit any state entity from giving preferential treatment to — or discriminating against — finance firms based on ESG factors. But the Kansas Public Employees Retirement System predicts it could cause more than $1 billion in losses due to the early sale of assets and could reduce returns by $3.6 billion over a decade. All told, KPERS said, the bill’s required divestment combined with reduced future returns “could negate 10 years of funding progress made by the state.” A similar bill in Indiana could cost its public pension fund $6.7 billion in losses over the next decade, the state's office of fiscal and management predicted in February. Lawmakers then amended the bill to reduce its scope and potential cost, down to $5.5 million, which seems to have been more palatable. It cleared a key financial committee later in the month.
| | | NEW DEATH SPIRAL — Remember how everyone was freaking out a few years ago over utilities losing market share to rooftop solar and having to spread fixed costs over fewer and fewer customers? That's still a concern, specifically for natural gas customers as building electrification accelerates, Marie J. French reports. Electricity advocates are predicting a doomsday scenario of 90 percent of customers getting off gas by 2050, resulting in monthly bills of $8,000 for remaining ratepayers. That'd be consistent with New York's climate plan, which is recommending electrifying almost everything to achieve an 85 percent emissions reduction from 1990 levels by 2050. Advocates want the New York Legislature to remove utilities' legal obligation to provide gas service to new customers. Meanwhile, the utilities are proposing rate hikes to cover billions of dollars of pipe replacements to reduce methane leaks. These are all projections, years into the future. Regulators are making decisions now, though. The New York Public Service Commission on Thursday denied cost recovery for part of a big natural gas project by National Grid on the grounds that it won't be needed until at least 2028, Marie reports. But the door is still open. “Ultimately, we're still using more natural gas year over year,” said Public Service Commission Chair Rory Christian. “If this need continues to grow at the pace forecasted, we could be looking at this project again.”
| | | | DOWNLOAD THE POLITICO MOBILE APP: Stay up to speed with the newly updated POLITICO mobile app, featuring timely political news, insights and analysis from the best journalists in the business. The sleek and navigable design offers a convenient way to access POLITICO's scoops and groundbreaking reporting. Don’t miss out on the app you can rely on for the news you need, reimagined. DOWNLOAD FOR iOS– DOWNLOAD FOR ANDROID. | | | | | | | | GERMAN ENGINEERING — Germany's last-minute end-run around the EU's combustion engine ban isn't just bad for the environment — it bodes ill for continental cooperation, Matthew Karnitschnig writes. It's kind of weird that Germany wants a loophole in the EU's pending rules — they've invested as much as anyone in electric vehicles and have been longtime champions of the ban. For whatever reason, they're pushing for support for e-fuels, or synthetic fossil fuel alternatives made from hydrogen and CO2. But the biggest damage may be to the continent's unity. "Berlin’s 11th-hour intervention on a deal everyone believed was done and dusted not only left the EU’s environmental policy in limbo, it also laid bare the bloc’s power vertical in all its dubious Teutonic glory," Matthew writes. | | | FROM LARRY, WITH LOVE — BlackRock CEO Larry Fink’s annual letter to investors made one thing clear: He’s staying the course, our Allison Prang writes. The letter released on Wednesday reinforced the message that the world’s largest asset manager still invests in fossil fuels – but that opportunities and risks tied to climate change and a broad energy transition remain critical to investment decisions. Fink also touted BlackRock's options for letting investors vote their own shares, an initiative the firm has been highlighting in response to criticism from red-state officials who have been pulling out public funds, citing the company's sustainability policies. "Our approach to investing in the transition is the same as our approach across our platform: We provide choice to our clients; we seek the best risk-adjusted returns within the mandate they give us; and we underpin our work with research, data and analytics,” Fink said. Pressure on financial institutions from both sides will only continue following Fink’s letter as environmentalists abhor BlackRock’s fossil fuel investments while advocates against sustainable investing throw shade on the firm’s consideration of climate and energy transition risks and opportunities.
| | | PFAS FISTFIGHT — EPA's move this week to regulate "forever chemicals" in drinking water has everyone retreating to their corners to get ready for a massive legal slugfest, Pamela King and E.A. Crunden report for POLITICO's E&E News. Expect arguments over the health risks of these per- and polyfluoroalkyl substances and the technological and economic feasibility of complying with EPA's proposed rule, which is the agency's first to address new drinking water contaminants in over 25 years. Good news for lawyers, at least: “We are in uncharted territory,” said Emily Lamond, a member of the environmental department at the law firm Cole Schotz PC. “This is an exceptional situation.”
| | | FOR THE BIRDS — The National Audubon Society said Wednesday that it’s keeping its name, resisting pressure from staff to sever ties to bird artist and enslaver John James Audubon, Robin Bravender reports for POLITICO's E&E News. The group is committing $25 million over five years to fund equity, diversity, inclusion and belonging work but isn't changing its name because "keeping our name best positions us to protect birds and the places they need," board chair Susan Bell said in an email to staff. Audubon's staff union, which is temporarily renaming itself the Bird Union, said the “decision to double down on celebrating a white supremacist" would sow divisions among environmentalists. Three board members have already stepped down, Robin reports.
| | | GAME ON — Happy Friday! 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 is editor Greg Mott, deputy editor Debra Kahn, and reporters Jordan Wolman and Allison Prang. Reach us at gmott@politico.com, dkahn@politico.com, jwolman@politico.com and aprang@politico.com. Want more? You can have it. Sign up for the Long Game. Four days a week and still free. That’s sustainability!
| | | — Big business is cashing in on Europe’s fears of industrial decline in a push to match U.S. green subsidies, our colleagues across the pond report. — A struggle to find skilled workers for a planned chip factory highlights the gap between U.S. industrial ambitions and the nation’s readiness to fill the jobs it would create, WSJ reports. — Shipping executives, meanwhile, are balking at the high cost of low-carbon freight transport. The Journal has that one as well.
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