The Sierra Club hosted Mary Cerulli of Climate Finance Action for our regularly virtual Community Conversations. We must move capital to address climate change, and some of the largest pools of capital are owned and managed by the public sector. Government-defined benefit pension plans -- including federal, state, and local government plans—held $7.1 trillion in assets as of the end of March 2021. The public ownership of these assets represents untapped power to confront the climate crisis.
State Treasurers and comptrollers oversee nearly three-quarters of these assets. Nearly $5.1 trillion in state pension fund assets are invested in public companies, private equity holdings, and other investments. And with these investments in public equities, treasurers have outsized shareholder power. They have the power to influence the direction of shareholder resolutions and, crucially, annual board of director votes.
Related to that power, they have the crucial ability to influence the biggest investors in the world: asset managers like BlackRock, Vanguard, and State Street. These asset managers can decisively swing AGM votes. Treasurers and assets they represent are some of the largest, most valuable customers/clients of the asset managers. So treasurers can use the shareholder power they have and also use their customer power to pressure their asset managers to do the same.
Climate Finance Action believes that a substantial number of public officials can be moved to exercise their shareholder power if key stakeholders and constituencies effectively pressure them to do so. We believe the will exists, the activists exist, and the strategic opportunities exist to organize and leverage this community power to make shareholder power a much more powerful force to address the climate crisis. Recorded Dec 8, 2021