You may have seen the story in The New York Times last week about the way Republican state treasurers are suddenly steering their states away from considering climate in financial decisions. The State Financial Officers Foundation appears to be the organizing force behind it all, a discovery that came as a surprise to the investigators at Documented, who provided the NYT with thousands of documents for the story. Documented's senior investigator Jesse Coleman told me this week that when he started looking into who was behind the sudden shift against ESG and climate disclosure amongst fossil fuel execs and Republican politicians, he expected to find one of the usual suspects—the Texas Public Policy Institute, maybe ALEC, the Heritage Foundation—but while they're all somewhat connected here, the little-known SFOF is the ringleader, encouraging states to push back against what they call "woke capital," and pass laws that bar firms like Black Rock, which has turned away from some fossil fuel investments, from doing business within state lines.

Here, Coleman walks us through some of the key findings from the investigation and provides a window into SFOF's strategy. (You can listen to the audio version here. Keep reading beyond the interview for a deeper dive on the history of both ESG and the movement against it).

[00:02:04] Amy Westervelt: Tell me a little bit about the backstory of this investigation. What made you start looking at state treasurers and this particular group that, that wound up being central to this?

[00:02:17] Jesse Coleman, Documented: Yeah, sure. So, you know, we follow the oil and gas industry very closely at Documented. You know, our role is to kind of unveil corporate power over society and politics. And, you know, the oil and gas industry is definitely a big piece of that. So, over the last couple of years, we had really noticed that this kind of catch all term ESG, which stands for environment, social and governance reporting was really becoming a really big deal for the oil and gas industry.

And what ESG is, is, you know, large corporations have to disclose certain things about their impact on the environment and society to shareholders. And for the oil and gas industry we were, we were watching it take over agendas of meetings and everybody was talking about it.

And for most of like the end of 2020 and early 2021, we were like, well, this is, seems like a way for the oil and gas industry to access very low cost capital by sort of greenwashing themselves and saying that they're good on all of these measures and disclosing certain aspects of their business, but maybe not changing their business practices.

Not to say that, you know, it was all bad. It's great to have more disclosure and a more fulsome sort of disclosure system, which is kind of in the works right now in certain regulatory agencies would be a good thing. But at the beginning of this year, we've noticed a real shift.

Whereas before it seemed like these climate disclosures were sort of inevitable, you know, the big oil companies like Chevron and Exxon were saying we're on board for this, everybody was saying, you know, we're gonna do these climate disclosures. At the beginning of this year, we started to see like a lot of Pushback. We started to see direct sort of attacks on this idea of climate disclosure. And we started to see little brush fires pop up in different states attacking the idea of disclosing climate information like this and we thought, well, you know, that's pretty interesting.

[00:04:08] Amy Westervelt: That's really interesting.

[00:04:09] Jesse Coleman, Documented: Yeah. so, you know, it all kind of kicked off especially with a bill that became law in Texas. Which you know, is called kind of colloquially " the fossil boycott rule," which said that, you know, the state of Texas will no longer do business with any company that boycotts fossil fuels.

And that became a law in the state. And, and, you know, we said, well, that's, that's interesting, this isn't coming from nowhere, you know?

So we started kind of filing records requests around, around the states, looking for initially just communications between the Texas comptroller, which is what they call their treasurer and other sort of state officials that would be potentially pushing these boycott bills in different states.

And as we started to get some of these records back, you know, it wasn't exactly what we anticipated. We kind of anticipated that this group, the Texas Public Policy Foundation was maybe driving this in the back seat to a large degree. And it actually turns out they are really involved, but there's this other group called the State Financial Officers Foundation that was acting as this really important central node of a much wider campaign to fight climate policy in general, that included this web of dark money groups that did include, like I said, the Texas Public Policy Foundation, but other major national political players, like Heritage, the American Legislative Exchange Council, ALEC, and some of the most powerful dark money groups in the United States.

[00:05:33] Amy Westervelt: Wow. That is so interesting. Okay. So that tipped you off like that, this random, I mean, it's such a perfect innocuous sounding group, right?

[00:05:44] Jesse Coleman, Documented: yeah, exactly. Yeah. Hiding behind their very boring name. yeah. Yeah.

[00:05:49] Amy Westervelt: So what are they and what were they getting up to?

[00:05:53] Jesse Coleman, Documented: So the State Financial Officers Foundation is a nonprofit group. They kind of bill themselves as a group of state treasures that are interested in the "free market," which is usually sort of code as I'm sure you and many other people know for Republican right politics, and that's kind of what they had been since their founding about 10 years ago, but they weren't really wading into major national issues. Like the things that they were focused on were really within the realm of financial officers of states, you know, pensions, retirement plans, college savings plans, that kind of thing. But we see about a year ago, this group, the State Financial Officers Foundation, they really shift their focus and become completely obsessed with climate measures and talking about climate change and repeating , these like really old lines on climate denial, you know, CO2 isn't bad for you. It's causing a great greening of the earth and...

[00:06:46] Amy Westervelt: Oh wow. They're really hitting the way-back machine .

[00:06:51] Jesse Coleman, Documented: Yes, exactly. Yeah. We've heard all this before and kind of thought some of it had, passed into messaging that doesn't work anymore, but sure enough, here it is again at the state level.

[00:07:00] Amy Westervelt: Wow, so, okay. They had this big shift last year, starting to talk about climate and ESG all the time and whatnot. What did you find about what kind of drove that shift?

[00:07:12] Jesse Coleman, Documented: Well, so, I mean, just, just to note one more thing, about how they operate, they're really closely tied to the American Legislative Exchange Council and they have a lot of similar attributes. One of those is that they have two or more yearly meetings, where they get together, all of their Republican treasurers and all of their corporate sponsors and they go to fancy dinners and they kind of talk about how they're going to strategize on whatever the issue of the day is. Well about a year ago, that issue of the day, like I said, became opposing climate finance policy, in many different ways, but it really coalesced around attacking policies by large financial institutions like BlackRock and moves in the financial sphere by like the securities and exchange commission or the department of labor where these agencies are saying, you should disclose climate risks and that sort of thing. So, yeah, they kind of shifted from talking about more financial stuff to these really kind of hard line climate issues. And they a key turning point here is when this other dark money group called Consumers Research became a top fiscal sponsor of the State Financial Officers Foundation. And then you see the agenda of these yearly gatherings, these meetings shift.

Like almost completely over to how do we attack BlackRock? How do we stop climate finance disclosure rules? How do we take on "woke capitalism"?

[00:08:35] Amy Westervelt: It's so funny, because I was reading through the description on the Documented website. And as soon as I saw "woke capitalism," I was like, oh God. I'm sure there's like Peter Thiel, Strive Capital thing here. Sure enough, two paragraphs later, there it is. So yeah. Tell me about this, it's a thing right in the last year or two of, um, these kind of libertarian folks being all up in arms about ESG and quote unquote woke capitalism. What is that?

[00:09:06] Jesse Coleman, Documented: Well, it's a great example of how these sort of Republican dark money groups are really good at creating a fake thing to attack and really kind of driving it into reality, you know, from a very niche, off the wall issue that nobody's talking about to now, you know, you hear Mike Pence talk about it. You hear it on Fox news every day. It's really been taken up by the zeitgeist. And like I said, really, I think you can trace that back to a large degree to groups like Consumers Research, who, they kind of saw the writing on the wall. They saw that climate policy was really stalling in most places, but one place that it wasn't really stalling and was continuing to move was in this financial world.

And like I said, you know, the, the SEC was taking up rules and these large financial asset managers were saying we have to take climate change into account in our investments. And so they kind of said, this is "woke capitalism" and BlackRock is a "woke capitalist", which is, it's hilarious. It's ridiculous if you know anything about black rock, right. They're, you know, I mean, woke doesn't really have a meaning necessarily, but they're just capitalist.

[00:10:14] Amy Westervelt: "Woke capitalism" is an oxymoron. It just is.

[00:10:18] Jesse Coleman, Documented: Yeah. But it allowed them to sort of in, in this really new and interesting way meld defense of the fossil fuel industry with the culture war.

And it was way more successful than other attempts like this. And you know, this group the State Financial Officers Foundation, because they were made up of state treasures who actually have a lot of power over financial decisions in their states , they elevated this group, the state financial officers foundation into this really key weapon against climate policy.

[00:10:49] Amy Westervelt: That's so interesting, because I feel like it kind of coincides with, with a lot of folks in the climate movement... I mean, a lot of people have been very focused on the financial sector for a long time, the divestment movement and all of that. Right. But I feel like there's just in the last year or two people who had traditionally been like, uh, finance scares me , have been kind of turning towards it too. So it's, it's interesting That these guys sort of anticipated more attention in that realm. so what are some of the things that they've been able to accomplish?

[00:11:21] Jesse Coleman, Documented: Well, so they've passed laws in five states and are aimed at passing laws in 20 more states that are based off of this sort of fossil fuel boycott rule, which there's different sort of model policies that they're passing around .The end result is, is kind of all the same, which is to either scare asset managers into backing away from their climate promises or to get rid of the asset managers that have climate promises and that's been a, a really sort of big and interesting piece of this sort of wide ranging campaign. But they're also doing a lot of other things. They're opposing federal nominees to key positions in federal government that oversee, financial measures.

They're sending comments to rules that are signed by the treasurers. So they look very legitimate and look very serious, but yet they're all kind of coordinated behind the scenes by this other national group. And they're also just figuring out how to kind of scare the financial industry away from overt talk about climate change.

[00:12:25] Amy Westervelt: That is a big deal, because I feel like it's just been kind of this innocuous thing in the background for like 20 years, you know? And, and yeah, you're right for a long, long time the oil companies, it was more like something that they seemed to see as a helpful tool for them to greenwash.

[00:12:44] Jesse Coleman, Documented: Totally. Yeah. I mean, we've heard the oil industry say, you know, this is a great way to access low cost capital because all we have to do is disclose X and Y and then suddenly, we get cheaper money from it. And I think this is another really interesting thing about this. You kind of hear ALEC's leader Lisa Nelson, talk about this rec.

She talked about this recently, but you know, they did polling on BlackRock. And what they found was that Democrats don't like BlackRock, and now Republicans don't like black rock, so they were able to kinda do this great, sort of pivot to where they're the, you know, they're the people that are opposing corporate power and they're the ones that are doing corporate accountability, which, you know, I mean, it isn't really true, but it does kind of scramble their opposition in a way.

[00:13:32] Amy Westervelt: Did you get any sense of what happened that made them go from thinking, 'this is a handy tool' to, 'this is a threat'? Did you get any sense of that from any of these documents or just from, you know, being immersed in it in general?

[00:13:46] Jesse Coleman, Documented: Yeah. Sure. I mean, you have to look at who's behind the State Financial Officer's Foundation, you know, I mentioned ALEC, Heritage... So they've played really key roles in all of this. You know, they're dark money groups. So we don't actually know who's funding them behind the scenes, but we do know that these are the places that a lot of these larger" culture war" messaging campaigns come from. So I think large national groups basically saw a political advantage to going after this and as they did their thing, as they did polling, as they did the various measurements that they do, they kind of saw that it was, it was being rather successful. So I think that it was really these large national dark money political groups that saw this as a powerful tool and it kind of filtered down into the state level because of that, because you know, you have to look at this sort of incentive structure that these state treasurers have.

If they talk about "woke capitalism" suddenly they're going to the big Heritage foundation meeting with all the biggest funders in the Republican party in DC. You know, S F O F got a huge award from Heritage Foundation this last year. And they took a lot of key treasures with them, you know, to this big meeting where they were feted by, you know, some of the biggest funders around.

So politically for these treasurers it's a great deal to get attention for doing something like this. They get to go on Tucker Carlson. so, you know, they have a incentive to do this since it's being supported by Heritage and ALEC and others.

[00:15:15] Amy Westervelt: It makes me wonder too, if maybe they, they sort of realized or noticed that this was an area that would be less, I don't know, like less touched by the whole litigation strategy. I know I've heard people talk about, well, if policy fails and litigation is getting ultimately gummed up at the Supreme court, we should be leaning on the Fed to like embrace certain financial policies. And it makes me wonder if these groups were like, okay, what's the one place that's not really touched by our court strategy. And it's it's finance and insurance. I wonder if they're, if they're looking at the insurance industry as part of this too,. When I say "they," I mean like Heritage and ALEC and all of those groups.

[00:16:02] Jesse Coleman, Documented: Yeah, that's a great question. I would say, you know, they kind of are very upfront about why the treasurers, why finance and, Riley Moore, the treasurer of West Virginia, who's a real leader of all of this was actually on a podcast with the head of S F O F. And he was talking about why the state treasures are so perfect as a weapon against climate policy. And he said, " the attorneys generals, right, they have to work through the court. 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." And, you know, sure enough, the, the law that Riley Moore got passed in West Virginia this last year, it gave him the power, even more power than the treasurer already had, to decide who the state's gonna invest with.

And, you know, then you saw, just in the last month, Riley Moore kicked five large asset managers out of the state with that newfound power. So they see the treasurers as this sort of extra judicial power center that they can exploit a little bit and it obviously fits into a larger right wing strategy of mobilizing down ballot elected officials. So you know, it fits into this larger trend, but I think the treasurers they're in a particularly good place to kind of cause havoc here.

[00:17:15] Amy Westervelt: Yeah. So what impact is this having on the financial sector? Do you have any sense of like, you know, is JP Morgan like, oh no, maybe we should rethink this strategy because we're getting kicked out of West Virginia or are they like whatever, this is not a big deal to us?

[00:17:30] Jesse Coleman, Documented: It seems like they don't know how to handle the pressure. These giant asset managers, they're so big. They're so used to being the giant, you know, the biggest fish in the ponds, calling the shots, right?

[00:17:41] Amy Westervelt: I mean, usually it's everyone competing for their business, not them having to worry about who wants to do business with them.

[00:17:49] Jesse Coleman, Documented: Yeah, so I get the feeling that, you know, BlackRock, they just don't, they don't know what to do with this criticism. You saw them after the Texas law was passed, you saw them hire lobbyists for the first time in Texas. Who did they hire? They hired oil and gas industry lobbyists. What did they do? They went around to, you know, key Texas officials and said, you know, we love oil and gas. Here's all of our oil and gas investments. We're always gonna continue to invest in oil and gas. You saw them do that in other states as well. So, you do see a remarkable change in tone. I'd also say in West Virginia, I just mentioned that Riley Moore said that these five large asset management companies can no longer do business with the state.

Well, there were six asset management companies that were under review. But one, one company, US Bank Corp apparently walked back their climate stances enough to continue to be able to do business with the state. And Riley Moore and others, you know, consider this a huge win, obviously because they've forced US Bank Corp to change in some way.

And we don't have all the details on that yet, but you know, US Bank Corp was not put on the boycott list. So, yeah. I mean, I think that there are definitely changes happening as a response to this campaign. And I think that's why we'll see this kind of campaign continue. I don't think that this is by any means over.

[00:19:06] Amy Westervelt: And what kind of impact can this have on taxpayers in this state, if you know, a large pot of capital is suddenly not at play in their state?

[00:19:18] Jesse Coleman, Documented: Yeah. Well this is where we get to like how this is also bizarre because you know, there was a big study that just came out that was looking at the Texas law and looking at the changes that Texas is making in response to that law.

And in response to state investments and pensioners in Texas are set to lose like hundreds of millions of dollars because of. So it is actually really hurting, you know, the people that are trusting these Republican states with their pensions and, and with their investments.

[00:19:52] Amy Westervelt: Couldn't they be sued then for that under laws where the people in charge of pensions have to be acting in the best interest of returns for the people enrolled in those pensions?

[00:20:02] Jesse Coleman, Documented: Yeah. I don't know. That's a great question, but you know, that's another side of this whole campaign is that they're actually also mobilizing attorneys generals to say it is illegal.

It is against the fiduciary duty to take into account these climate disclosure rules. So if you, as a pension fund-- this happened in Kentucky-- if you, as a pension fund, you know, are talking about ESG and, and other climate disclosure rules and making decisions off that you are, you are violating your fiduciary duty.

[00:20:30] Amy Westervelt: Wow. That's so interesting. That could just be easily disproved by objective data on financial performance, right. You could say, well, actually this fund that considered these things outperformed this fund that didn't, you know, buy X percent or whatever. That's so interesting.

[00:20:50] Jesse Coleman, Documented: Well just going back to the really straight up climate science denial that undergirds a lot of this, I mean, I guess I just don't know how much reality plays into this, you know what I'm saying? I mean, and it's also just so blatantly hypocritical cause you know, that's what they're accusing these large asset management funds of doing is hurting the people that are invested in them by not investing enough in fossil fuels when you know, it's the exact opposite.

[00:21:15] Amy Westervelt: It's interesting, right? We're gonna just change this reality by pretending it's not true. I mean, that's kind of across the board a thing with, with these folks. But I think it's like particularly strange to see it in a space that's dominated by numbers and objective data.

[00:21:31] Jesse Coleman, Documented: Yeah. And, and I don't know if you feel this way, but you know, I mean, because, you've done so much amazing work on climate science denial and all the contours of that.

But you know, this feels like science denial from 10 years ago or something.

[00:21:43] Amy Westervelt: It does. It's really weird that it's working so well. I forgot to ask you, treasurers , are they appointed or are they elected?

[00:21:54] Jesse Coleman, Documented: It changes, state to state, most treasures are elected officials. Most treasurers are sort of constitutional officials where they're elected separately and you know, their job is sort of written into the state's constitution. There are a couple states that are appointed, like George's treasurer is appointed, but it that's, that's more of the exception than the rule.

[00:22:13] Amy Westervelt: Okay. So is there any effort to get more Republican treasurers elected, or on the Democrat side to try to take back some of these positions?

[00:22:25] Jesse Coleman, Documented: Well, that's certainly something that we're watching as the midterms come up. You know, there's a number of SFOF treasures that are up for reelection or trying to get elected to another position of interest.

So, you know, I think that's gonna be a really interesting space to watch.

[00:22:38] Amy Westervelt: Yeah the hot state treasurer race, not a thing we've ever really paid attention to. Now we need to, wow. Is there any kinda aspect of this we didn't talk about that you think is important to, to draw people's attention to?

[00:22:52] Jesse Coleman, Documented: Well, I think there's a couple interesting things. One, you know, you mentioned Strive asset management and Vivek Ramaswamy earlier, and we didn't really get a chance to talk about that, but it's a really kind of fascinating subtext of this is that there are these people that are really important in this greater campaign against climate disclosure, you know, so there's sort of the big talking heads of the campaign. But they also have for profit entities that are set to profit from this campaign to drive money away from BlackRock. In the case of Vivek Ramaswamy you know, he set up this group called Strive Asset Management, which is the unwoke asset management manager. So, so while VEC has spent the last two years, you know, helping orchestrate this campaign to drive West Virginia and other states to divest from BlackRock, he also set up a company that's waiting there with open arms to catch the money that he's shaking outta the tree.

[00:23:49] Amy Westervelt: Didn't like a lot of the founding capital for Strive come from Peter Thiel?

[00:23:53] Jesse Coleman, Documented: Yes. All roads lead back to Peter Thiel. He did, and he's also hired a bunch of the people that have really undergirded this anti-climate campaign for a long time. You know, he has hired people from these other dark money groups that are really well connected in this sort of network so that, you know, the circle is complete between the nonprofit, political organizations that are campaigning to push BlackRock out of these states and the, for profit side, right. That's sitting there waiting for the money, you know, they're, they're literally the same people. And I feel like with these sort of, you know, quote unquote culture, war issues, you don't see the profit motive that clearly all the time. So that's another really interesting piece about this.

And then on profit motive, I think the other thing to talk about would be the fossil fuel industry's, participation in this, right. There's been other efforts obviously to kind of mobilize, you know, sort of the culture warriors to the defense of the fossil fuel industry. I don't think it's ever been as successful as it is now, but you know, we, in our research, we saw the American petroleum Institute, the largest. , you know, fossil fuel lobbyist in the country, having meetings with SFOF helping support their messaging, giving these treasurers pats on the back for the good work that they're doing.

And, that's another instance of this obvious profit motive. Undergirding this campaign that you know is about opposing China and communism and "woke capitalism" and stuff.

[00:25:15] Amy Westervelt: Is there any sense given that this Riley Moore guy is in West Virginia . Is there any sense that this, any of this stuff has had an impact on, Joe Manchin's kind of persistent obstructionism on climate policy?

[00:25:31] Jesse Coleman, Documented: Yeah. That's a great question. I mean, you know, West Virginia, the political world there is actually kind of small, so, you know, I mean, we see people that have been closely aligned with Joe Manchin for a long time that have become lobbyists that are sort of involved in this.

You know, we obviously don't know what Joe Manchin thinks about this or how Riley Moore wants to use Joe Manchin, if he does, to help accomplish this campaign. But there is overlap in personnel there, we just don't have a ton of information on this.

[00:25:56]Amy Westervelt: Yeah. Alright. Well, I appreciate you walking me through it and also just doing all this work in general. We'll link to the investigation in the show notes, so people can go check that out.

An Old Argument

Longtime listeners/readers will recognize a lot of the anti-ESG arguments because, of course, they're not new at all. Before it was called ESG, considering climate risk in your investments was called socially responsible investing, and it grew out of the corporate social responsibility universe. CSR, like ESG in its early days, was in some ways a shield for oil companies.

It started with our old friend, E. Bruce Harrison, back in the 1960s and 70s. In 1962, Harrison, had just left his job on Capitol Hill to work in communications for the chemical industry’s trade group, the Manufacturing Chemists Association (today known as the American Chemistry Council). He was just another PR flak until science writer Rachel Carson published Silent Spring, her book about the impact of the chemical industry on both the environment and human health.

“Rachel Carson’s book appears, and chaos ensues. And people are extremely concerned about the environment,” explained Melissa Aronczyk, coauthor of the forthcoming book A Strategic Nature about the history of environmental PR in America. “It’s at that moment that Harrison is appointed the environmental information manager and sort of given a team of other PR people who worked at companies like DuPont, Dow, Monsanto, and Shell and told, ‘You design the PR response to Rachel Carson, this is a disaster.’”

Harrison was the first-ever environmental PR guy. He and his team threw everything they could at Carson: She was a woman; she wasn’t a scientist (Carson had stopped short of finishing her degree in biology to care for various family members); she had cancer, so this was probably a personal vendetta; she might even be—gasp—a lesbian. None of it worked. Carson’s work had sounded the alarm, and multiple environmental regulations ensued. But it was a learning experience for Harrison, and he would not repeat his mistakes.

He went on to work for Freeport Sulfur Mining Company (today Freeport-McMoRan), helping to open gold and copper mines in Indonesia and New Guinea, all while retaining a position on the MCA public relations committee. By the time he came back to Washington, in the early 1970s, various polluting industries were struggling with a wave of new environmental regulations.

The year 1972, in particular, was an inflection point for businesses with respect to environmental issues. In the United States, you had the Clean Water Act. And then there was the United Nations Conference on the Human Environment, which birthed the Stockholm Declaration. This groundbreaking document made environmental issues global, emphasizing conservation, the redistribution of resources, and state responsibility for environmental damage both within and beyond their borders. It also had zero concern for business. “To the extent that industry was included at all, in the UNCHE negotiations, it was as a culprit and a threat,” Aronczyk and coauthor Maria Espinoza write in their book.

The first principle put forth in the Stockholm Declaration reads, “Man has the fundamental right to freedom, equality and adequate conditions of life, in an environment of a quality that permits a life of dignity and well-being, and he bears a solemn responsibility to protect and improve the environment for present and future generations.” Later on, the declaration reaffirms nations’ sovereign right to extract their own resources, but notably balances that right with the mandate that countries must “ensure that activities within their jurisdiction or control do not cause damage to the environment of other States or of areas beyond the limits of national jurisdiction.”

It led to the creation of new international laws, norms, and organizations focused on environmental protection, including the United Nations Environmental Programme (UNEP), which was formed as a permanent agency to act as “the environmental conscience” of the UN. It was the kind of coordinated global call to action that youth climate activists are calling for today. It was also the culmination of what Carson had kicked off a decade earlier. Again, this was in 1972. So what happened? And what does it have to do with CSR or ESG or the backlash against the two?

Well, all this progress on environmental regulation was a massive PR crisis for American industry, and a huge opportunity for Harrison. Not only did he have contacts in politics thanks to his years working on the Hill; he also had international experience, industry connections because of his involvement with the MCA, and a few critical insights gleaned from the Silent Spring debacle.

His first big idea was to pull multiple industries grappling with environmental regulations together into one group that could collectively represent their interests. In 1972, he formed the National Environmental Development Association, an appropriately vague and “green” sounding name for a group of chemical, petroleum, agricultural, and mining companies; pro-business politicians; and labor groups, all of which felt that new environmental standards were a threat to their livelihoods. Harrison opened his own PR firm that same year with NEDA as his first client and himself as NEDA’s executive director. Harrison’s wife, Patricia de Stacy Harrison, was a cofounder of the firm and a NEDA director. (Today, she’s the president of the Corporation for Public Broadcasting.)

Harrison also saw the importance of integrating business interests into the international discussion of environmental issues. Central to this endeavor was inventing “sustainability” as a neoliberal, business-friendly approach that privileged voluntary and market-based solutions to ecological problems. Throughout the 1980s, Harrison scored himself invitations and speaking engagements at various UNEP events, where he pushed the idea that the more companies participated in the creation of environmental policies, the more effective those policies would be. To be clear, Harrison wasn’t the only person championing that idea in the 1980s, nor was his message a hard sell. Plenty of people were happy to embrace a business-friendly approach that required no economic tradeoffs. But given his domestic and international influence, Harrison was a driving force in this movement to allow polluting companies to shape environmental policy. In the late 1980s, he created two organizations—the Global Climate Coalition, which brought together manufacturers, oil companies, automotive, rail, and various other industries into a group that could effectively shape the global response to climate change, and EnviroComm, an international network of PR firms that would all use the same corporate messaging on environmental problems. Their stated mission was to monitor emerging environmental policy all over the world for clients and to influence that policy through strategic lobbying.

The idea was to use those 20 years between the Stockholm Declaration in 1972 and the United Nations Conference on Environment and Development in Rio de Janeiro to fully integrate industry into the international approach to environmental issues. The strategy was enormously successful. At the 1992 Rio summit, there was none of the urgency or directness of the Stockholm Declaration. Gone, too, was the emphasis on government regulation—replaced by a sort of big-tent approach that included business interests and prioritized compromise. “In order to meet the challenges of environment and development, States have decided to establish a new global partnership,” Agenda 21, one of the defining documents out of the 1992 Rio Summit reads. “It is recognized that, for the success of this new partnership, it is important to overcome confrontation and to foster a climate of genuine cooperation and solidarity.”

That evolution, from regulation to compromise, is a critical one because the Rio Earth Summit also birthed the United Nations Framework Convention on Climate Change (UNFCC), which informed the creation of the Intergovernmental Panel on Climate Change and its reports, as well as every international climate agreement since.

“It was at the many events run by business surrounding that 1992 Rio Earth Summit, convened by the UN, that Harrison presented his paper on the concept of sustainable communication,” Aronczyk said. “And he had very willing ears of all the CEOs from all over the world who were interested in this idea. He was also chairman of the International Public Relations Association at that time, and the International Public Relations Association was also holding events around the Earth Summit. The environment was a very, very hot topic at that time, of real concern to corporate leaders.”

Maurice Strong, the organizer of the Rio Earth Summit, was an oil man himself and often talked about the need for industry to be part of any effective climate solution. A big fan of “doing well by doing good,” Strong often highlighted the financial rewards that could come from solving environmental problems, and believed that companies’ embracing sustainability represented a real and meaningful change. “Not to say that corporations are perfect today, but even grand corporations like DuPont have made immense progress in translating some of their past environmentally damaging practices into new profit opportunities,” he said at a press conference in the early 2000s.

In contrast to the 1972 convening, the UN encouraged business-community participation in 1992—and industry groups were ready to take advantage. They drafted their own “sustainable development charter” to bring to Rio. “And as you can imagine, this charter did not contain anything that would have really transformed how companies did business,” Aronczyk explained. “It was a very business-as-usual document, but it paid a lot of lip service to the idea of going green, of being sustainable, being very concerned about the environment. And because they got out in front of the actual conference, they were really able to put that document forward and stave off other kinds of more binding legislation or more draconian regulations that would have caused problems for these companies’ profits.”

It was out of this compromise soup that CSR and "corporate sustainability" grew. There were new things to measure and new reports and new organizations to audit those reports, a whole cottage industry. Companies like GE and Ford started hiring sustainability directors. These jobs, tellingly, were usually in the marketing department.

But it wasn't all just marketing, there were some real initiatives too, and real money behind those initiatives. In response to the 1989 Exxon Valdez spill, for example, investor Joan Bavaria brought together other environmentally and socially conscious investors who wanted to work towards building an economy that valued more than shareholder dividends and launched Ceres, a nonprofit that would go on to help define socially responsible investing and, eventually, ESG.

It was real enough to draw some detractors back in those days too. Guys like Steve Milloy, who wasn't just opposed to climate science, but also to the idea of regulating air pollution, or even having an EPA. Milloy spent the 90s running The Advancement of Sound Science Coalition (TASSC) fighting against air pollution regulations on behalf of Philip Morris and the rest of the tobacco industry, along with every other industry that didn't like the idea of pollution regulations. In the early 2000s, Milloy teamed up with one of his former Philpp Morris pals, the company's longtime science director Tom Borelli, and went to Exxon and various other corporations that weren't too fond of the turn toward CSR with a new idea: the right sort of socially responsible investment fund, one that reminded its investors that, as Milton Friedman put it, "the social responsibility of a business is to increase its profits." It was called the Free Enterprise Action Fund, and its primary function seemed to be engaging in the same sort of shareholder activism that environmentalists had been using to try to push companies to go green. They filed shareholder resolutions against company's that were going big on sustainability, like GE with its splashy "Ecomagination" campaign. In 2006, Milloy filed a shareholder resolution with GE, asking the company to justify its policy on global warming and warning that it was paving the way for business-killing greenhouse gas regulations.  "They are going to harm their business, and other businesses," he wrote.

Ironically, that campaign was designed for GE by Edelman—a firm that's become increasingly associated with greenwashing and climate denial over the years, including work for the American Petroleum Institute that made the very same arguments Milloy was making. In an amusing twist, Milloy used the same tactic against his former backers, ExxonMobil, in a 2020 shareholder resolution. He demanded that Exxon conduct a "greenwashing audit," and justify their spending on things like algae-based biofuels and the many campaigns the company runs to promote them. Sounding a whole lot like the environmentalists he regularly derides, Milloy said: "Greenwashing is meant to protect management. They can go out in public and try to claim they're doing something—it’s all just posing, they're just posers, pretending they're doing something on climate. They’re not doing anything.”

Milloy's longstanding fear that going along with greenwashing would eventually pave the way for requirements to actually do something on climate came true shortly after he proposed that Exxon shareholder resolution, when the Securities and Exchange Commission announced its intention to create oversight and guidance for ESG—to make the words actually mean something. The convoluted mess that is ESG today is exactly the sort of confusion the SEC was created to clear up, but clearing it up will make it real and that was never supposed to be part of the bargain for the descendants of Harrison. That's what the anti-ESG folks are protesting. Not the actual issues with ESG, of which there are many, but the cleaning up of those issues to pave the way for a financial system that includes climate risk.

Parts of this story were published in The Nation last year. They're re-published here as part of Covering Climate Now, a global journalism collaboration co-founded by Columbia Journalism Review and The Nation to strengthen coverage of the climate story.