By Ben Jealous

If a public opinion poll done last month is right, more than half of you won’t know what I mean by the initials “ESG,” and fewer than one in 10 will understand what they mean for financial markets. But listening to some self-interested politicians, many of whom have ties to our dirtiest industries, you’d think ESG was a significant threat to the American way of life.

For the record, ESG refers to responsible investing that considers companies’ environmental, social, and governance practices. That’s actually something most Americans support. More than half of us think financial managers should be allowed to consider environmental factors, climate threats, and the risk involved in fossil fuels’ future and that states should invest public retirement funds in clean energy. More than eight in 10 of us who invest for ourselves want sustainable options for our savings, Morgan Stanley reported.

In economics class, we called that demand.

In his 2022 annual letter to CEOs, Larry Fink, chairman of the world’s largest investment adviser BlackRock, called it “stakeholder” capitalism. “It is capitalism, driven by mutually beneficial relationships between you and the employees, customers, suppliers, and communities your company relies on to prosper. This is the power of capitalism,” he wrote, adding, “We focus on sustainability not because we’re environmentalists, but because we are capitalists and fiduciaries to our clients. That requires understanding how companies are adjusting their businesses for the massive changes the economy is undergoing.”

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Perversely, Fink has been pilloried by right-wing politicians as a green ideologue when his firm claims to be the largest single investor in fossil fuel companies on the planet. These same politicians are trying to prohibit this kind of responsible investing through state and federal laws.

They argue they are fighting for free market capitalism when really they are limiting investors’ freedom to choose and the information that they need to make decisions. It’s not free markets, it’s political pressure.

The costs of these mistaken and misrepresented policies are real. Economists from the Federal Reserve Bank of Chicago and the University of Pennsylvania determined that within eight months of Texas passing a law that prevented local governments from using five of the largest bond underwriters taxpayers would pay $300-$500 million more on $31.8 billion those governments wanted to borrow. That amounts to about a 1% tax on that debt. Not to mention the banks cut out of the Texas market have Texas employees whose companies can no longer compete in their state.

Fortunately, some public officials are insisting that they be allowed to shape portfolios in ways that are fiscally sound precisely because they consider environmental impacts. I was in New York City last week for an announcement by city Comptroller Brad Lander and the trustees of the New York City Employees’ Retirement System and the Teachers Retirement System of their plan to reach net zero pollution from emissions in their investment portfolios by 2040.

“If the cynical war of political distraction waged by red-state politicians at the behest of their fossil-fuel donors deters us,” Lander predicted, “we will sacrifice our opportunity to maximize long-term investment returns along with millions of lives and trillions of dollars of global investment.”

Opponents of this responsible approach to investing derisively label it “woke” because they know that term creates confusion and for some fear. So, it’s a perfect wedge to divide us. If anything, they need to wake up to the idea that Americans want to pass on a safer, healthier planet powered by abundant energy to our children and our grandchildren. We want to put our money where our aspirations are.

Ben Jealous is executive director of the Sierra Club, the nation’s largest and most influential grassroots environmental organization. He is a professor of practice at the University of Pennsylvania and author of “Never Forget Our People Were Always Free,” published in January.

By Kara Manke

More than 1 million Californians live near active oil or gas wells, potentially exposing them to drilling-related pollution that can contribute to asthma, preterm births and a variety of other health problems.

A new study appearing in the March 23 edition of the journal GeoHealth finds that these Californians are disproportionately Black, Latinx or low-income, and Black Californians are more likely to live near the most intensive oil and gas operations.

“When we look across the state of California over the past 15 years, Black, Latinx and low-income people consistently were more likely to live near oil and gas wells,” said study first author David González, a President’s Postdoctoral Fellow at the University of California, Berkeley. “Black people, in particular, were more likely to be in places that had the most intensive oil and gas production, which can lead to more exposure to harmful chemicals.”

The study also found that while oil and gas production in California has declined over the past 15 years, the rate of decrease has been slower near racially marginalized communities.

Earlier work led by González found that disparities in exposure to oil and gas wells can be traced back to the 1930s in Los Angeles and linked to the historical policy of redlining.

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“What’s emerging is that oil and gas wells have been disproportionately impacting racially marginalized and low-income communities in California for generations,” González said.

“We found that redlining was strongly associated with the disproportionate siting of oil and gas wells in historically racially marginalized communities, and we’re still seeing disproportionate siting and production of oil and gas infrastructure in many of these same neighborhoods today.”

Oil and gas production is a complex process that can release an array of hazardous pollutants: Drilling rigs and other heavy machinery emit diesel exhaust, active wells can release toxic volatile organic compounds, and in some cases, the chemicals that are used to extract oil from underground reservoirs can seep into the water supply, endangering those who rely on groundwater for drinking.

Operating heavy drilling machinery in residential areas can also create other stressors, like light and sound pollution.

Mounting evidence suggests that these pollutants pose a variety of health risks to those who live close to wells — that distance usually is defined as living within 1 kilometer (km), or a little over half a mile.

The California climate measures signed into law last September by Gov. Gavin Newsom contained provisions that would ban new drilling within approximately 1 km of homes, schools, hospitals and parks and provide protections for those living near existing wells.

But in early February, oil companies succeeded in putting the law on hold until voters decide its fate in a November 2024 ballot referendum.

“The weight of scientific evidence clearly demonstrates that people living near oil and gas development have a greater risk of respiratory problems and adverse birth outcomes,” said Seth B.C. Shonkoff, executive director of PSE Healthy Energy and an associate researcher at UC Berkeley’s School of Public Health. “Attempts to undermine or delay California’s landmark setback law contradict the science and increase public health risks, particularly for Black and brown communities.”

Given the complexity of oil and gas operations, many studies only consider proximity to wells when investigating the health risks of oil and gas production. However, this focus on proximity may mask additional disparities in the hazards posed by more intensive production, the researchers said.

The current study, which found that Black Californians are more likely to be exposed to more intensive oil productions, might help explain why some studies have found that the health risks associated with living near wells are higher for racially and socioeconomically marginalized people.

Rachel Morello-Frosch, professor at UC Berkeley’s School of Public Health and in the Department of Environmental Science, Policy and Management and the study’s senior author, said she hopes the paper makes clear the health equity implications of the oil and gas industry in California.

“This study advances scientific understanding about the origins and persistence of racialized inequities in exposure to oil and gas extraction in California, which in turn has significant implications for regulatory interventions that center environmental justice in protecting community health from this well-documented environmental hazard,” Morello-Frosch said.

In addition to the 1 million Californians who live near active or retired wells, nearly 9 million — 20% of the population — live close to wells that have been plugged and abandoned, some as early as the 1800s. While wells that have been plugged in recent years are held to rigorous environmental standards, other studies have found that some of these older wells may still be emitting toxic chemicals that could be harmful to those living nearby.

“The most common exposure to oil and gas infrastructure in California was to plugged and abandoned wells,” González said. “From a public health perspective, it’s not clear how worried we should be about plugged wells. But given how many people live near them, I think it’s important to ask more questions and take care when we retire wells so we don’t create problems down the road.”

Additional study co-authors include Claire M. Morton of Stanford University; Lee Ann L. Hill, Drew R. Michanowicz and Robert J. Rossi of PSE Healthy Energy; and Joan A. Casey of the University of Washington. This study was supported by the California Air Resources Board (#18RD018) and National Institute of Environmental Health Sciences (R00 ES027023)

By Ben Jealous

ConocoPhillips needs more than the disastrous approval it won from the Biden administration last week to proceed with its Willow oil drilling project on Alaska’s North Slope. It needs $8 to $10 billion to build 199 wells, hundreds of miles of road and pipelines, a processing plant, and an airstrip on 499 acres that are vital to caribou, migratory birds and indigenous people.

While President Biden certainly could have stopped Willow, so can the financial institutions helping create it. Willow is just the most recent example of banks’ complicity in preserving fossil fuel extraction through a continuing flow of money to Big Oil and Gas — all despite pledging a year ago to pursue the net zero carbon emissions we need to save the planet.

That’s why I joined activists from Third Act Tuesday on a block in Washington to protest among the offices of banking giants Bank of America, Chase, Citibank, and Wells Fargo in our nation’s capital. Third Act is a group founded by environmentalist and author Bill McKibben to bring together Americans over 60 to campaign for a sustainable planet. While I’m still too young to join, I was part of demonstrations they organized at bank branches across the country.

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We were there to call out these “dirty” banks’ practices and their unacceptable costs — both immediate and long-term. Right now, any money that goes to Willow and fossil fuel projects like it, is money that won’t be invested in a clean economy, particularly in fledgling companies that are finding sustainable ways to power the planet. It’s those jobs that Alaskans and their descendants really need.

Longer term, the banks’ lending will weaken the impact of an historic $370 billion investment our country will make in the next decade on green technology and alternatives to oil and gas. As those investments pay off, there will be less and less demand for oil coming from projects like Willow. But the supply will remain steady (for 30 years in Willow’s case). So, gas will be cheaper for the holdouts who continue to use it, making it even harder to push them to make the switch.

The situation got even more dire with the collapse of Silicon Valley Bank and the shadow of doubt it unfairly cast on other regional banks. Banks of that size have been vital to the growth of the clean economy. For example, Silicon Valley reportedly financed 60% of community solar energy projects in which property owners jointly construct a solar facility to power their neighborhoods.

The consequence of the turmoil has been to concentrate even more power in the biggest banks. Bank of America, for example, took in close to $15 billion in new deposits in a matter of days after Silicon Valley was taken over by federal regulators.

That makes it even more imperative that we hold these banks to their pledges not to fund new fossil fuel projects (HSBC, Europe’s biggest bank, is keeping that promise). Third Act has suggestions that most people can take to be part of that accountability — cut up credit cards issued by the banks and move deposits out of them, not into them. When more and more people do that, they will be strengthening the case of a small group of the banks’ investors who have begun introducing resolutions at shareholder meetings calling for an end to fossil fuel financing.

Throughout our country’s history, it’s been profitable to consider certain people and places as disposable. We know where continuing that unjust path will lead — to a planet that’s too polluted and too hot to be livable. We’ve passed the time when financial institutions can postpone an end to their investment in the climate’s demise. It’s time these dirty banks put their money somewhere else.

Ben Jealous is executive director of the Sierra Club. He is a professor of practice at the University of Pennsylvania and author of “Never Forget Our People Were Always Free,” published in January