Treasury Secretary Janet Yellen is set to call out the fossil fuel industry in a Thursday speech on the Biden administration’s economic agenda to be delivered in Detroit, Mich., where oil and gas companies have long held influence in the U.S. auto manufacturing sector.
The visit to Detroit comes on the heels of the Democrats’ passage of the Inflation Reduction Act (IRA), which includes $14.2 billion worth of subsidies for electric vehicles meant to wean the auto industry off of gasoline in an effort to reduce U.S. transportation emissions that are contributing to a rise in global temperatures.
“We will rid ourselves from our current dependence on fossil fuels,” Yellen’s prepared remarks say.
“Our plan — powered by the Inflation Reduction Act — represents the largest investment in fighting climate change in our country’s history. It will put us well on our way toward a future where we depend on the wind, sun, and other clean sources for our energy,” her remarks continue.
Yellen’s speech will also emphasize the role that private capital can play in addressing climate change, putting her generally in line with the economic, social and corporate governance (ESG) movement.
The ESG movement in the financial sector pursues environmental and social equality objectives through divestment practices and getting board members with particular political views elected to company boards.
“By mobilizing private capital, the clean energy tax credits implemented by Treasury will propel our economy and workers to a leadership position in the fastest growing markets and technologies of today and the future, with positive spillovers to the rest of the world. And in the process of boosting domestic clean energy production, the law will support our energy security and insulate us from the type of fossil fuel-driven energy volatility that we’ve seen in the past year,” her remarks say.
From the other side: Republicans at the state level have been mobilizing to block ESG practices, which they view as harmful to their economies, with various initiatives in states like West Virginia and Texas that include a blacklist of financial firms that “[boycott] energy companies” and a request for documents from certain institutional investors on Wall Street.
Texas state Sen. Bryan Hughes (R), whose State Affairs Committee sent letters to asset management giant BlackRock and three other firms asking for information on ESG practices, said in an interview with The Hill that he is concerned about corporate power advancing a “left-wing agenda.”
“You know how it goes. BlackRock comes to Company X and says we own however many million shares in your company, and if you want us to vote for your directors and your compensation, then you better do what we say,” Hughes said.
“It’s one thing for that power to exist, but when we see a handful of firms control this amount of the stock market and we see them moving in lockstep using that power for this left-wing agenda, it’s just something we’ve never seen in America,” he said.
BlackRock previously stated it does not boycott fossil fuel companies, but CEO Larry Fink has said that he believes capitalism can change the way societies operate.
“Capitalism has the power to shape society and act as a powerful catalyst for change,” he wrote in a 2022 open letter to CEOs, adding that “companies perform better when they are deliberate about their role in society” and that “the relationship between a company, its employees, and society is being redefined.”
Read more from The Hill’s Tobias Burns.