Ursula von der Leyen – Wall Street, prepare – POLITICO
With assist from Zachary Warmbrodt and Victoria Guida
IT’S THE MONEY THAT MATTERS — President-elect Joe Biden made a public splash along with his high local weather nominees, notably John Kerry and Gina McCarthy. Much less showy however equally influential are the handfuls of accounting and financial wonks who will likely be put in all through Washington’s monetary companies ecosystem. Steeped in sustainability and social justice, they’re prone to have a deep affect on company transparency and the circulation of capital.
The appointees and new hires will populate the highest echelons — Treasury and the SEC for starters — however additionally they can have perches at under-the-radar our bodies that govern accounting, mortgage-backed securities, export credit score and the $four trillion municipal bond market.
The highest basic on this ESG military is Janet Yellen, who if confirmed to run Treasury additionally will lead the Monetary Stability Oversight Council. Yellen, who testifies at present earlier than the Senate Finance Committee, hardly ever misses an opportunity to speak concerning the monetary and financial dangers of local weather change, and he or she has endorsed a carbon tax.
However have a look, too, at Yellen’s incoming chief of workers. Didem Nisanci is international head of public coverage at Bloomberg. Her present boss, Michael Bloomberg, leads the Process Drive on Local weather-Associated Disclosures, a non-public group borne out of a gathering of G-20 finance ministers. Nisanci is a member, and the group is quick turning into the de facto international commonplace for climate-related monetary disclosure.
That brings us to Gary Gensler, a Goldman Sachs alumnus and Biden’s decide to guide the SEC. The company is floor zero for shareholder and client teams that need extra company reporting — much more of it — on greenhouse fuel emissions, racial fairness, government pay and different ESG components.
Progressives again Gensler partially as a result of he didn’t return to Wall Street after leaving the Commodity Futures Buying and selling Fee, which he led below President Barack Obama. As a substitute, he took up a professorship at MIT.
“He doesn’t seem to be someone who’s seeking future employment,” mentioned Dieter Waizenegger, government director of CtW Funding Group, which advises shareholders. “He doesn’t have, maybe, the baggage that others would bring.”
Then there’s the Labor Division, the place nominee Marty Walsh is predicted to roll again a 2020 rule that hemmed in pension fund decision-making on local weather change, racial justice and different ESG danger components. Walsh, the mayor of Boston, leads Local weather Mayors, a bipartisan community of greater than 470 metropolis leaders that consider financial development and environmental stewardship go hand in hand.
Love him or hate him, BlackRock’s Brian Deese will convey his ESG chops to the Nationwide Financial Council, which he’ll lead below Biden. Deese has taken warmth for what the left considers BlackRock’s failure on divestitures, however he’s in sync with what probably will likely be Biden’s middle-of-the-road financial insurance policies.
Don’t overlook Bharat Ramamurti, one other member of the Biden NEC. Ramamurti leads the Roosevelt Institute’s Company Energy program, a challenge that seeks to carry firms accountable for employees and the general economic system, not simply their backside strains. He’s anticipated to have a sustainability portfolio on the NEC.
“This idea that in good times everyone but workers are going to benefit first and then in bad times, immediately workers are going to be the first to get hit, that’s just not sustainable,” Ramamurti mentioned in October. “What we need to do is figure out what series of changes are necessary to link up again corporate profits and workers’ wages and benefits.”
In brief, the regulatory atmosphere for monetary companies firms and their purchasers might look loads totally different, and shortly. Change received’t essentially watch for Congress, and even affirmation votes.
As head of FSOC, for instance, Yellen received’t want laws to invoke local weather danger as a purpose to impose extra oversight on big asset managers, hedge funds and insurance coverage firms. On the SEC, even earlier than Gensler is confirmed, former Chair Jay Clayton’s departure might have a thawing impact on workers choices going into proxy season.
Biden’s military of ESG wonks is one purpose Washington’s most influential monetary trade teams, together with the Institute of Worldwide Finance, the American Bankers Affiliation, the Bank Coverage Institute, and the Securities Trade and Monetary Markets Affiliation, are becoming a member of the local weather refrain. POLITICO’s Zach Warmbrodt has the news.
“The administration is making sure climate considerations are embedded across the board and not siloed,” Waizenegger mentioned. “It can’t be segmented off to just the EPA.”
And this midnight rule is DOA: As banks retreat from fossil fuels, a high Trump banking regulator used his final day in workplace to hit the brakes. However the rule from the Workplace of the Comptroller of the Forex hadn’t been revealed as of Tuesday. The Federal Register would not publish on Inauguration Day, and the rule is unlikely to take impact below Biden. Lorraine and Victoria Guida have the story.
Biden will likely be sworn in Wednesday because the 46th president of the USA. Singer-soulster Michael Franti, who treads gently on the Earth by not sporting sneakers, will likely be among the many performers on the Clear Power for Biden ball. Franti’s ft braved Washington’s subfreezing chilly when he carried out at Al Gore’s Inexperienced Ball in 2009.
TEMPORARY RELIEF WON’T FIX INCOME INEQUALITY — For a sobering instance of the wealth hole, check out California. Regardless of the recession and financial shutdowns, the state ended 2020 with a file $15 billion surplus, due to rich Bay Space tech employees, who’ve grown even richer in the course of the pandemic.
“The folks at the top are doing pretty damn well,” mentioned Democratic Gov. Gavin Newsom, a multimillionaire himself. California’s tax system is designed to take a much bigger chew out of the rich, and Newsom’s $227 billion price range would direct that windfall to low-income residents with extra spending on colleges and stimulus checks, POLITICO’s Mackenzie Mays stories.
Nonetheless, the pandemic has solely widened the divide between California’s haves and everyone else. And whereas the Golden State has it significantly dangerous, the issue is nationwide.
Some say it’s a repudiation of the American mythology of self-reliance. “We live in a society where we don’t believe in government intervention, and there’s this narrative that you can pull yourself up by your bootstraps,” mentioned Jhumpa Bhattacharya, a vp on the Perception Middle for Neighborhood Financial Growth. “When the pandemic hit, we saw that’s not true, and my hope is that we will be able to develop a new understanding of how our society works.”
Straightforward fixes don’t exist. Tax hikes are politically unpopular in California, and companies, together with Oracle and Hewlett Packard Enterprise, have determined to go away for low-tax Texas.
Biden’s stimulus isn’t all that totally different from Newsom’s, albeit with a a lot bigger price tag. It’s principally momentary reduction to maintain households afloat till the virus is below management, which might sluggish the tempo of yawning earnings inequality however wouldn’t deal with it head-on.
Biden’s package deal — which might increase a number of the authorities’s best anti-poverty packages, together with refundable tax credit for the working poor and diet help — requires signoff from Congress. Passage will likely be sophisticated at finest, particularly now that the Senate has one other impeachment trial to run.
KILLING KEYSTONE — The epic story of the Keystone XL pipeline is taking one other flip. Biden plans to yank the challenge’s cross-border allow on his first day in workplace, POLITICO’s Lauren Gardner and Ben Lefebvre report, overturning one in all Trump‘s first government actions and killing a challenge that has change into a political totem within the combat between local weather activists and the oil trade.
Regardless of analysts who say the growth in U.S. shale oil has made new sources of Canadian crude much less vital, TC Power — Keystone XL’s sponsor — has continued to combat years of authorized and political challenges.
If you happen to’ve forgotten all the main points — Who can blame you? — Ballotpedia has a helpful pipeline timeline.
ON THEIR WAY OUT THE DOOR — The Trump administration at present will stand alongside a bunch of oil firms on the Supreme Courtroom to argue for the top of state local weather change lawsuits. The case will resolve whether or not a lawsuit introduced by the town of Baltimore towards oil and fuel firms belongs in state courts, the place the plaintiffs need it, or federal courts, the place the oil firms stand a greater probability of successful. The court docket’s determination might decide the trail for greater than a dozen different authorized challenges the oil trade is dealing with, POLITICO’s Alex Guillen stories.
Hopefully they’ll use much less concrete. European Fee President Ursula von der Leyen needs the continent to faucet its interior avant-garde to launch a brand new Bauhaus motion. The experimental artwork faculty, based in interwar Germany, was famed for marrying kind with perform — and for its heavy use of cement, a significant greenhouse fuel emitter. Von der Leyen needs the brand new Bauhaus to match “style with sustainability” and has challenged designers, architects and scientists to collaborate. The design section launched Monday.
— Renew Oceans, a program funded by Massive Oil and chemical firms to finish runaway ocean plastic waste, has shuttered with little to indicate for its work. The group aimed to gather practically 500 metric tons of plastic trash from the Ganges, however collected lower than one earlier than it shut down operations, folks concerned within the challenge instructed Reuters. The challenge’s closure is an indication that an trade whose monetary future is tied to the expansion of plastic manufacturing is falling wanting its targets to curb the ensuing improve in waste, environmentalists mentioned.
— The New York Occasions connects the dots between the Capitol riot and local weather disinformation.
— The European Union in March will unveil landmark guidelines requiring larger transparency on ESG investing, however knowledge gaps might nonetheless hinder progress, the Monetary Occasions stories.
— Eat oysters, save New Orleans. As eating places reopen, they’re making an attempt to jump-start oyster shell recycling to combat erosion within the bay, NOLA.com stories.