Today, members of the Stop the Money Pipeline coalition reacted to the news of John E. Morton’s appointment to serve as Climate Counselor to Secretary Janet Yellen and to lead the Treasury Department’s new Climate Hub by emphasizing the urgency with which Morton and all financial regulators must act to address the systemic risk of climate change to and from the US financial system.
Specifically, the coalition issued the following set of demands for the Biden Administration in advance of the Glasgow climate talks in November, the full descriptions of which can be found here:
- Require financial institutions to phase out financing for fossil fuels and deforestation.
- End all public money for corporations engaged in fossil fuels and deforestation.
- Invest in Black, Brown, and Indigenous communities, remedy past harms, and promote a clean, just transition for workers in the fossil fuel sector and frontline communities.
- Hold all firms accountable to respecting Tribal Nations’ treaty and sovereignty rights.
This February, 147 groups, including many members of the Stop The Money Pipeline coalition and other organizations, sent a letter to Treasury Secretary Yellen, encouraging her to follow through on her promise to create a robust, well-staffed climate hub at Treasury led by a very senior-level person devoted full-time to climate. In the letter, the groups outlined key expectations for the climate hub leader, including financial regulatory expertise and the urgent need to mitigate the causes, not just the impacts, of the climate crisis, and a track record of working with movements.
In November, following President Biden’s victory, the Stop the Money Pipeline coalition released a set of criteria for all appointees, including:
- Demonstrate they believe regulation and policy to address climate risk requires more than disclosure, stress tests, and voluntary market action, it requires substantive regulation to curb fossil fuel and deforestation-risk finance;
- Are willing to engage with affected communities and work with movements;
- Have a proven commitment to the public interest, which in the case of climate change includes limiting global warming to 1.5ºC;
- Have a proven ability to creatively apply the tools of government; and
- Reflect the diversity of identity and experience of the country, including (but not limited to) economic, demographic, race, ethnicity, class, sexual orientation, gender identity, ability, and other diverse attributes and/or life experiences.
Member organizations of the Stop the Money Pipeline coalition released the following statements in reaction to Morton’s appointment:
“The climate czar is far too important of a role to choose someone without a demonstrated track record of listening to and working with the climate movement,” said Tracey Lewis, Senior Climate Finance Policy Analyst of 350.org. “The Treasury Department has far to go in order to prove it understands that government action must be informed by impacted communities, not dictated by those fresh off a stint on Wall Street.”
“Morton has no experience at the Federal Reserve or Treasury, nor at any of the other primary banking and market regulators, and thus lacks the subject-matter expertise needed to drive substantial regulation at these agencies,” said Vasudha Desikan, Political Director of the Action Center on Race and the Economy (ACRE). “It is disappointing that another white man with no demonstrated track record of engaging with movements or communities of color impacted by climate change, and does not significantly reflect our identities and experiences.”
“A role this important cannot be filled by someone who believes ‘the market’ will fix the climate crisis or who is worried about profit-making off of the energy transition. We urgently need a leader at Treasury with willingness and experience to treat the causes of climate change — namely fossil fuels and deforestation — not just the symptoms,” said Moira Birss, Climate and Finance Director at Amazon Watch. [Background: In a 2020 interview entitled “combating climate change with private investment,” Morton noted that “the question is how can we capitalize” on the transition away from fossil fuels. Morton is a partner at Pollination Group, a venture capital firm that, according to Reuters, “seeks to put a value on resources such as water, soil and air.”]
“As a serial revolver without financial regulatory experience, John Morton is not fit for this job. He has moved between public service and private business, including private equity, several times and will likely use this role to increase compensation at his next post-government gig,” said Jeff Hauser, Executive Director at Revolving Door Project. “This moment demands a person whose primary focus is preventing a planetary crisis, not maintaining a broad array of relationships with past and likely future clients, funders, and colleagues in the fossil fuel industry.”
“A climate czar like John Morton who has never set foot in a key financial regulator will have an extremely hard time coordinating these regulators to fight the climate crisis,” said Collin Rees, senior campaigner with Oil Change International. “A venture capital approach to climate can’t solve our looming emergency or phase out fossil finance — we need strong, coordinated government action. This is a bad start to the week of the Administration’s climate finance rollout.”
“U.S. financial institutions are among the world’s worst drivers of climate chaos, and their fossil and deforestation financing deeply undermines our country’s aspirations to climate leadership,” said Jason Opeña Disterhoft, climate and energy senior campaigner with Rainforest Action Network. “Stopping U.S. banks, insurers and asset managers from fueling climate risk will require decisive use of every available regulatory tool and the experience to outmaneuver Wall Street pushback. By choosing someone with no regulatory track record, the Biden administration looks to have stumbled at the first hurdle.”
“Climate change poses a catastrophic risk to our entire economy, and we need immediate action from the Treasury Department to protect Americans’ savings and livelihoods from a climate-fueled crash. John Morton must be ready on day one to work with Secretary Yellen to develop an ambitious plan to make our system more resilient to climate disruption,” said Jamal Raad, Executive Director of Evergreen Action. “The Treasury Department is uniquely positioned to disentangle our financial system from risky fossil fuel investments and put us on the path to a clean energy economic recovery—and there is no time to waste. Morton should take steps to mitigate the climate risk posed by the fossil fuel industry by increasing oversight of unstable companies and implementing climate stress testing across the financial sector. He must also be prepared to engage with other agencies across the federal government to deploy capital for clean energy development and should work to champion investments in the clean energy economy and boost global investment in climate solutions. We’ve seen the cost of inaction from financial regulators before, and we cannot afford to repeat the mistakes that led to the Great Recession—Morton must act swiftly to rein in climate risk.”
“While at OPIC, Morton ensured the agency’s climate policy dramatically undercounted its financed greenhouse gas emissions. If Biden aims to build back better Morton is the wrong pick. Sarah Bloom Raskin is the progressive choice and has our full support,” said Doug Norlen, Economic Policy Program Director, Friends of the Earth U.S.