Will we?
In today's post to his The Crucial Years substack Bill McKibben writes:
And clearly America is not going to play the commanding role in helping solve the climate crisis, the greatest dilemma humans have ever encountered.
I cannot agree with this.
The United States has the largest and most robust public employee pension promise, that is provisioned by the collectively largest aggregation of society's shared savings aggregated into social trusts for social purposes, in the world today.
There is some $5 Trillion controlled by the prudent stewards of these social trusts.
These stewards have a power that both we and they do not realize they have.
They have the power to financially engineer socially beneficial cash flows for income as well as safety to assure security and dignity to evergreen populations of current and future retired workers, directly, that, given the number of workers included and the vast amounts of money committed, will also be, of necessity, security and dignity for us all, consequently.
We and they don't know they have this capacity because it is currently being hidden by the prevailing fiduciary practice of Asset Ownership, allocating assets across asset classes, and within classes, selecting Asset Managers peer-benchmarked by Consultants for excellence in maximizing the highest possible profit extraction from price-taking in the public, or value creation in the private, alternative, capital markets, solely in the financial best interest of capital markets professionals, on the axiomatic assertion that what is best for the capital markets is also always best for all of us.
Financialized fiduciary money captured by the Capital Markets and made to flow exclusively into the buying and selling of Assets for profit extraction, through either price-taking or value creation, in speculation on Growth through Creative Destruction, cannot be mobilized for "transitioning away from fossil fuels in a just, orderly and equitable manner", as COP28 correctly concluded that we must.
Transition is not Growth.
Destruction is not orderly. Neither is it just. Or equitable.
De-financialized fiduciary money set free from capital markets capture can.
We in America created the financialization of fiduciary money. We can re-create it, de-financialized.
We can innovate a New American Model of Prudent Stewardship of Social Trusts, by starting with Private Equity showing us the way to financially engineer value creation for profit extraction, and moving through the Canadian Variation showing us the way to take that engineering in-house to arrive at an adaptation of the US Tax Credit Equity Partnership model for financing Affordable Housing and Renewable Energy, to financially engineer socially beneficial cash flows for income and safety to assure security and dignity.
That brings us to the innovation in fiduciary finance of negotiating agreements on equity paybacks to an actuarial/fiduciary cost of money, plus opportunistic upside, from enterprise cash flows prioritized by contract for suitability of the technology, longevity of the enterprise, and fairness in how the business does business, under the circumstances then prevailing.
That opens up the innovation of fiduciary activism, through ongoing conversation about what is fair, across all six vectors of business fairness:
1. fairness to suppliers (Fair Trade);
2. fairness to communities, of place and of interest (Fair Engagement);
3. fairness to Nature, and Society and our shared Future (Fair Reckoning, with climate and other things);
4. fairness to workers, and in the workplace (Fair Working);
5. fairness to customers and competitors (Fair Dealing); and
6. fairness to the savers whose savings are the original and ultimate source of the money made to flow into enterprise, by its financiers, fiduciary and otherwise (Fair Sharing).
This New American Model for Prudent Stewardship of Social Trusts can mobilize tens of trillions, collectively, worldwide, for hospicing hydrocarbon companies as the world transitions away from fossil fuels .
In this way "America [can] play [a world-leading] role in helping solve the climate crisis".
The real question is, Will we?