|  | | Transition Finance Weekly |
| Exploring the policy, politics, and economics of the clean energy transition |
| Each week here in Transition Finance Weekly, researchers and analysts from Pleiades Strategy summarize the top stories and trends related to the policy, politics, and economics of the clean energy transition in the states.
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| | 1. Judge Dismisses Exxon Suit Against Activist Shareholder Arjuna Capital |
| After Arjuna Capital proposed a shareholder petition on CO2 emissions for Exxon Mobil’s May shareholder meeting, the company took an unusual course and sued, claiming such proposals abuse the proxy process. On Monday, a Texas federal judge ruled the suit was moot and dismissed it. Shareholder rights proponents cheered: an Exxon win would have made petitions harder everywhere. Even Vanguard said it would have concerns about the use of corporate power to chill the shareholder proposal process. Climate activist group Follow This: “The right for shareholders to file proposals has not been compromised.” The judge’s order implied he was sympathetic to Exxon’s underlying claim, so expect more corporate challenges like this one in the future.
Arjuna’s Natasha Lamb: “Investors understand [climate] risks and are looking to their companies to engage with them on measured approaches to risk mitigation, not engage in litigation.” |
| | 2. Global Clean Energy Spending Will Hit $2 Trillion This Year |
| Renewables are the future, and (per the Boston Globe) “America is losing the clean energy race to China.” |
|  | Source: Bloomberg The International Energy Agency says clean energy investment will beat $2 trillion this year, double the fossil fuel total. Renewables have already passed 30% of global electricity production. Bloomberg’s David Fickling: “[B]y many measures, the solar companies have already overtaken Big Oil” — especially in China, where Tongwei is already producing more energy than ConocoPhillips. Tongwei’s planned $3.9B Mongolia plant could make it bigger than Exxon Mobil. The Globe: “China now produces 80 percent of the world’s solar panel components, 86 percent of its lithium-ion batteries, 67 percent of wind turbine generator covers, and almost two-thirds of all electric vehicles.” In solar alone, China has invested $50 trillion over ten years, 10X as much as Europe.
Learn more: Interactive renewables dashboard by country and type |
| | 3. Forward-Looking State And Local Policy Can Turn The U.S. Renewables Curve Upward |
| Siting, permitting, and interconnection remain key barriers to renewable energy growth, but some state and local regulators are taking the right steps forward on deployment. To meet their commitments to 100% renewable energy, Illinois and Minnesota have passed legislation to speed siting and permitting. Illinois utility scale wind and solar approvals are local, but state law sets a ceiling on how restrictive local governments can be. In Minnesota, where the state takes preemptive authority over large projects, recent reform legislation will streamline permitting to promote renewables growth. Texas has established a flexible interconnection mechanism in its statewide grid that has helped it outpace Florida and California in clean energy. Renewable energy researcher Tyler Norris says expanding use of flexible interconnection would speed and simplify entry of renewables into the power network. But permitting still constrains growth: large clean energy installations are effectively banned in 15% of U.S. counties, including most of Connecticut, Tennessee, and Vermont.
Clean Grid Alliance: “Our overall goals are going to be difficult to achieve if the answer is ‘No’ in county after county.”
Learn more: State-by-state permitting review |
| | 4. Record Heat Prompts A Call For Federal Action |
| Workers say state and local governments need help in handling heat, a quiet, deadly killer. This week, heat-index temps above 100 degrees Fahrenheit are hitting the Midwest, Northeast, and Mid-Atlantic, with record highs in state after state. As ongoing heat and wildfire events risk overwhelming the energy infrastructure and threaten our financial and social stability, a wide environmental, labor, and health coalition is demanding federal action. They have petitioned FEMA to declare extreme heat and wildfire smoke events “natural disasters,” like floods and tornadoes. This could unlock readiness funding, provide public relief, and push OSHA on worker protections. So far, FEMA has refused, citing lack of precedent, but the groups noted that no precedent supported the COVID-19 disaster declaration, which underpinned America’s pandemic response. Nitish Pahwa: “[W]e’re no longer in a world where climate change affects the economy … we’re in a world where climate change is the economy.” In a world like that, a patchwork response is no longer enough.
From the petition: “These twin climate-fueled catastrophes [heat and smoke] now consistently, year after year, vastly exceed the economic and technical capabilities of state and local governments to manage them, adapt to them, and mitigate further harm.” |
| | 5. Pleiades 2024 Statehouse Report Drives Conversation About Right-Wing Bad Faith |
| Pleiades Strategy tracks anti-ESG policy developments, including the 373 bills and resolutions introduced in state legislatures since 2021. Earlier this week we released our 2024 Statehouse Report, showing how bills and resolutions proposing to prohibit responsible investing and protect risky companies fared in this year’s state legislative session. |
|  | Most of the coverage our Report led with the good news: anti-ESG hit heavy resistance this year, and only 6 bills (out of 161) passed, a quarter as many as in 2023. But with anti-ESG proposals introduced in 39 states since 2021, reporting also called out our finding that “an observable chilling effect has spread through the private sector,” as companies pull back incrementally on climate change and DEI. This puts the U.S. behind Canada, Europe, and Asia in pressing for rational climate investment policy. They noted that anti-ESG laws (which, as we pointed out last week, have weak voter support) cost real money: Texas’s 2021 bank blacklist cost taxpayers up to $530 million in just six months.
State legislatures aren’t the only ESG battleground: as we’ve reported, state AGs and other state executive officials have taken over 100 executive actions to interfere with responsible investment decisions. And there’s court activity, too: ESG litigation has been filed in Texas, Oklahoma, California, Mississippi, and Tennessee, which will help determine whether laws like these survive.
Coverage: Fast Company, Institutional Investor, E&E News, S&P Global |
| THE STATE OF ANTI-ESGTotal bills introduced since 2021: 373, in 39 states Total passed into law: 42 bills and 10 resolutions, in 19 states
2024 Summary 161 proposals considered, of which 6 passed — in FL, GA, ID, LA, SC, and TN. (Compare this to 23 laws and 6 resolutions passed in 2023.) To date, all proposals have failed in AK, IA, ME, MN, MS, MO, NE, SD, and WI All proposals failed that were considered this year in AL, IN, KS, KY, OK, NH, and WV
Source: Pleiades Strategy 2024 Statehouse Report |
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