Skip to main content

Mark Trahant
Indian Country Today

There’s an old joke about leadership and bureaucracy: We take a long time to make up our minds, but once we do, we really move slowly.

That in essence is the United States government’s approach to climate change. The lack of consensus in Congress means that every step is weighed, counter-measured, and then delayed.

And these delays are compounded by increasing use of fossil fuel use – and infrastructure projects – that lock in greenhouse gas emissions for decades to come.

The United Nations summed up the situation with this simple equation: “As long as countries continue to emit greenhouse gasses, temperatures will continue to rise.”

Related reading:
— What the heck is Indigenous economics?
— Are carbon markets the new gaming for tribes?
— Climate change, Indigenous community and ESG
— The economics of climate accountability

“We are getting measurably closer to temporarily reaching the lower target of the Paris Agreement on Climate Change,” Petteri Taalas, the Secretary-General of the World Meteorological Organization said recently.

“The 1.5°C figure is not some random statistic,” he said, but “rather an indicator of the point at which climate impacts will become increasingly harmful for people and indeed the entire planet.”

On Wednesday, the U.S. Securities and Exchange Commission took yet another step toward regulations that “promote consistent, comparable, and reliable information for investors concerning funds’ and advisers’ incorporation of environmental, social, and governance (ESG) factors.”

ESG stands for Environment, Social and Governance. It is a tool that investors use to focus their funds on companies that are committed to sustainability, and often, Indigenous representation and consent. Companies that continue to mine and extract oil and gas unabated cling to the label of ESG even when their corporate activities don’t match their actions.

“I am pleased to support this proposal because, if adopted, it would establish disclosure requirements for funds and advisers that market themselves as having an ESG focus,” said SEC Chair Gary Gensler. “ESG encompasses a wide variety of investments and strategies. I think investors should be able to drill down to see what’s under the hood of these strategies. This gets to the heart of the SEC’s mission to protect investors, allowing them to allocate their capital efficiently and meet their needs.”

SUPPORT INDIGENOUS JOURNALISM. CONTRIBUTE TODAY.

The new rules require companies to be clear about their ESG strategies and will require funds and advisors to disclose more information about those efforts. “Funds claiming to achieve a specific ESG impact would be required to describe the specific impact(s) they seek to achieve and summarize their progress on achieving those impacts,” the SEC said.

The reaction is expected.Those that favor disclosure, even regulation of corporations on climate-related activities, want the agency to get on with it. And do more.

“Right now ESG investing in mutual funds and ETFs is the Wild West due to the voluntary nature of ESG-related disclosures, absence of widely accepted terminology, and limited to no enforcement,” said As You Sow CEO Andrew Behar. “The proposed rules acknowledge the problem and are a good first step in stopping funds with ‘ESG’ in their names from continuing to hold dozens of fossil fuel companies and coal-fired utilities. However, the new rule continues to use the flawed 80/20 framework.”

He said the new rules did not follow recommendations made in the As You Sow January report, “Identify ‘Greenwashing’ Funds Using NLP Firms’ Prospectuses,” written in collaboration with graduate students at the Rady School of Management at the University of California, San Diego. The study showed that of 90 mutual funds and ETFs with ESG in their names, 60 scored a “D” or “F” on As You Sow’s Invest Your Values ESG rating platform, which in 2021 was named by Kiplinger as the “#1 tool for sustainable investors.”

As You Sow said the new rule will allow loopholes to continue.

“Investors still need clarity on exactly what ‘sustainable’ and other terms like ‘fossil-free,’ ‘low-carbon,’ and ‘ESG’ mean,” said Behar. “It is critical that a fund’s prospectus reflects its philosophy and intent in alignment with its name and holdings.”

On the other hand, critics of ESG say it’s a political framework that has no place in capitalism.

Former Vice President Mike Pence recently called on states to “rein in” the push from some investors, including employee pension funds, to use ESG as an investment framework. He recently tweeted: “Liberal activist investors are forcing private companies to abide by ESG investing principles — elevating left-wing Environmental, Social and Corporate Governance goals over the interests of the business and its employees.”

But the development of a regulatory framework, based on a company’s own actions, could be a game changer. The key idea is that a company actually does what it says it’s doing.

While the new regulations apply to funds that advertise ESG, there remains the larger issue of greenwashing.

And corporations make a great case for greenwashing. Indian Country Today’s Mary Annette Pember recently pointed out how Enbridge increased pressure on the Bad River Ojibwe to approve a renewal for Line 5 by pursuing a court action that raises questions under oath about tribal leaders’ “thought process” in opposing renewal of the company’s easement through the reservation. Yet the same company proclaims both its climate change goals and its Indigenous policies.

Enbridge first secured easements for its pipeline from the Bad River tribe in the 1950s, renewing them in the 1970s and the 1990s. The easements expired in 2013. The tribe is now seeking $45 million in damages from Enbridge for trespassing.

“Enbridge commits to pursuing sustainable relationships with Indigenous Nations and groups in proximity to where Enbridge conducts business,” the company says. “To achieve this, Enbridge will govern itself by the following principles: We recognize the importance of the United Nations Declaration on the Rights of Indigenous Peoples in the context of existing Canadian law and the legal and constitutional obligations governments in both Canada and the US have to protect those rights.”

The UN Declaration is clear about Free, Prior and Informed Consent. Yet that’s an idea that’s a long way from a legal probe about tribal leaders’ thought process.

Then, that’s also the whole point of the SEC regulatory framework. It could be a tool for companies to report, and even pay a price when corporate spin diverges from the actions on the ground.

In Wyoming, Jordan Dresser, as chairman of the Northern Arapaho Tribe, sees first hand the shifting pressure on oil and gas companies.

“Oil companies are very stuck in their ways,” Dresser said. “It's tough for them to adapt, but I think tribes have that leg up because we're able to be sovereign nations and also able to do what we want.”

He said his own tribe, Wind River, with a land base of 2.1 million acres, demonstrates the possibilities. Dresser said, “We’ve just gotta tap into it and be limber with it.”

And clear regulations about just what is a sustainable investment could help that process.

Mark Trahant, Shoshone-Bannock, is editor-at-large for Indian Country Today. On Twitter: @TrahantReports Trahant is based in Phoenix. The Indigenous Economics Project is funded with a major grant from the Bay and Paul Foundations. 

Our stories are worth telling. Our stories are worth sharing. Our stories are worth your support. Contribute $5 or $10 today to help Indian Country Today carry out its critical mission. Sign up for ICT’s free newsletter. 

Indian Country Today - bridge logo