A few weeks ago, we had on Jesse Coleman was documented to walk through how the same dark money network that once funded climate denial is now funding state treasurers in an effort to push back against so called woke capital or woke capitalism.
The reference to Environmental, Social and Governance Guidelines in the finance space or ESG, which if anything, has mostly been a pretty handy greenwashing tool for a lot of polluting industries over the years. That was until the Securities and Exchange Commission announced that the next phase of its ESG plan was to require companies to disclose climate risk. Seems
logical enough. Climate impacts could definitely have a financial impact as well, both in terms of extreme weather events and in terms of legislative changes, not to mention the massive amount of litigation currently facing many companies that are the
drivers of climate change. But remember Coleman told us the anti ESG crowd, they're reaching way back into the vault of climate change denial, claiming not only that climate change isn't happening, but that actually more CO two in the atmosphere is a net gain.
You know, CO two isn't bad for you. It's causing a great greeting of the Earth.
Coleman also told us about one state treasurer in.
Particular, Riley Moore, the treasure of West Virginia, who's a real leader of all of this. Was actually on a podcast with the head of SFOF and he was talking about why the state treasures are so perfect as a weapon against climb policy, and he said, the attorney's generals they have to work through the courts. I speak with the taxpayer's money with the stroke of my pen. I can change things and it doesn't have to go through the court system.
That podcast is called Gallantly Streaming, by the way, who knows why, it's the State Financial Officers Foundation podcast. Here's really Moore speaking with them in February twenty twenty two.
We're able to kind of speak with the taxpayer dollars, is what I'd say. And because you're not just a bureaucrat in here.
You are an.
Elected official, and you are there to represent the equities and interests of your constituents, and you can do that in a way that's uniquely different than say attorney generals do, where they might sue over a certain issue or something
like that. This has more of an immediate effect, and the end of the day, day citizens are paying taxes, industries are paying taxes to the state in which you manage those dollars, and so there is, I believe, a responsibility to have those dollars invested in a manner that reflects the interest and equity of your constituents.
Moore became a real hero of the anti ESG right when he kicked Blackrock out of West Virginia in January twenty twenty two. That was shortly after CEO Larry Fink encouraged American companies to commit to carbon neutrality. It's interesting that more specifically notes there how much more treasures can do than attorneys general because guess who else is getting in on the anti ESG action.
This is not a case about climate change. This is a case about separational powers and ensuring that the legislative branch, sception at an unelected bureaucrats don't try to weigh in when they don't have power to act.
That's right. It's Patrick Morrissey, Attorney General of West Virginia, the man who brought us West Virginia versus EPA. The Supreme Court ruling in that case doubled down on a convention entirely manufactured by Supreme Court justices in recent years, something they call the Major Questions doctrine. Don't be fooled by the doctrine part. It's only been around since the early eighties. There's nothing established or original about this idea.
It's just a very handy tool that conservative justices like to use. We've explained Major Questions doctrine on this podcast a few times, but here's NYU law professor Richard Rivez defining it for us back when West Virginia versus EPA was being argued at the Supreme Court earlier this year.
The Major Question doctrine is a doctrine that was used in the past extremely rarely. I mean the Supreme Court maybe invoked it once every five years, only five times before this past year in its whole history, starting around nineteen eighty in cases that were actually quite exceptional for some reason or other. But in the last couple of years, it's a doctrine that's been invoked promiscuously by opponents of regulation, and the Court has shown great interest in embracing it.
I mean, it basically says that if an agency decision is going to have vast economic or political significance. It needs to be authorized explicitly by Congress, and that the agents shouldn't be doing it under kind of delegate authority in a somewhat open ended statute. This term, the Court has already invoked it in striking down the Osha vaccine and testing mandate, in bicking down the eviction moratorium, and it obviously played a big role in the argument yesterday.
So it's become you know, it's gone from something quite extraordinary that happens where the Court really only deals with her every several years, every five years, so something that ends up like as a central issue in the Supreme Court multiple times a year. And this whole transformation has happened very quickly, i'd say, in the last couple of years.
And now West Virginia Attorney General Patrick Morrissey is injecting major questions doctrine into guessed at the ANTIESG debate. We'll be back with more on that right after this quick break. I'm a new Westervelt and this is drilled. Earlier this year, the Security is an Exchange Commission released its proposed climate rule. Here's SEC head Gary Ginsler announcing and explaining that rule on CNBC.
We've had this regime for ninety years where investors get to decide on what risk they want to take. Companies make full and fair disclosure, and increasingly companies are disclosing
climate risk. And so we're stepping in to help bring some consistency, some standardization with regard to those disclosures, some qualitative disclosures around strategy and governance and the like, but also yes, some metrics as well with regard to their greenhouse gas emissions and the financial effects on their current financials.
And let's just say industry was not a fan.
Your predecessor has a pretty stark warning in the Wall Street Journal today about the path that you're going down, where he worries that it would draw legal challenges, that it's a matter that should be left up to Congress, that perhaps no single agency should be responsible for setting climate policy, which requires so much more input than just
a single agencies determinations. What's your response to those criticisms and to those who feel that this puts at risk your central task of safeguarding capital allocation, Well.
Kelly, I'm sorry, I don't accept the premise we at the SEC are just narrowly focused on disclosure and investor protection on one side, and capital formation on the other side, efficiency of the market in the middle. So this is trying to bring some standardization, some consistency to what's already happening. We had our first environmental disclosures in the nineteen seventies. We have a climate risk guidance from twenty ten, so this is trying to build upon that and bring some
consistency in this one area. This is so investors are better and for more consistently informed, and so companies on the other side also get the benefit of consistently sort of knowing how to kind of have that conversation with investors. This is not about, with all respect, what some people have said a broader bit about climate policy. It's about disclosure and time tested rules of materiality around disclosure.
I don't think it's a freak coincidence that the fossil fuel industry's love affair with ESG ended really ended in twenty twenty one, just about the time the SEC began talking seriously about requiring climate disclosure as opposed to just continuing with the voluntary disclosures that had been in place since twenty ten. In other words, as soon as it looked like ESG might actually mean less money, not more. The industry branded it as won't capital and began looking
for ways to get rid of it now. In addition to the dark money funded state treasures pushing policies that borrow their states from doing business with banks or investment firms that are anti fossil fuel, or as they put it, part of the war on energy, Mister Major Questions himself, Patrick Morrissey has filed formal comments about the SEC's proposed climber rule. It includes a whole section entitled Major Questions Doctrine.
Even if the relevant statues were ambiguous, the SEC's view of its authority in the proposed rule would violate the Major Questions Doctrine. It reads, an unelected body like the SEC cannot answer major questions like those in the proposed rule. Then it cites West Virginia versus EPA as President, quoting the ruling as saying that the Major Questions Doctrine recognizes
that quote in certain extraordinary cases. Both separation of powers principles and a practical understanding of legislative intent and make courts reluctant to read into ambiguous statutory text. The delegation to an agency claimed to be lurking there. And yes, Morrissey's formal comment to the SEC is co signed by a long list of other Republican attorneys general, so we know he's sending out the bat signal to RAGA.
Again.
That's the Republican Attorney's General Association, which regular listeners of this podcast are probably tired of hearing about already. Morrissey is a member, of course, these leadership positions both in RAGA and its fundraising arm, the Rule of Law Defense Fund. In twenty twenty, those organizations ponied up close to two
million dollars for Morrissey's re election campaign. Here's Lisa Graves's former Senate investigator and the head of True North research on RAGA and the push for structural change.
Has had enormously distorting effect on US law. It provides a mechanism for corporations to pass money through to help attorneys general in ways that they would not be able to individually solicit for their own campaigns given their role,
their regulatory role over those very industries. And that's been going on since RAGA was created back more than twenty years ago now, and it has accelerated under some of the attorneys general who have led it, like Scott Krewitt, who was, in my view, another corrupt individual, someone who was selaxed on ethical rules to say the least, and who was willing to do the bidding of the oil industry in attacking climate legislation and climate rules, even the
very modest clean Power Plan to advance the interests of the funders of RAGA.
And now here they are pushing back on the pretty minimal requirements of the SEC. So you've got the age of West Virginia going after the EPA and the SEC, the same state's treasure banning any investment firm or bank that's not pro coal all while Joe Manchin, west Virginia's Senator, is trying to ram a pro pipeline's permitting deal through Congress. Here's State treasurer. Riley Moore encapsulating it all in one big dad joke.
I'd say here in West Virginia, the only kind of black rock that we like is cold.
That's it for this time, Thanks for joining us, and we'll see you back here next week. Drilled is an original Critical Frequency production. The show was created and reported by me Amy Westerveld. Original music and mixing and mastering for this episode by Peter Duff. Artwork is by Matthew Fleming. You can find us online at Drilled podcast dot com. You can also find us on Twitter at We Are Drilled.
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