Transition Finance Weekly - 1/31/2025
2025 Anti-ESG Outlook, Regional Renaissances, Rebuilding Without Gas
1. The Pleiades 2025 Legislative Outlook
We’re on year three of tracking anti-ESG legislation and executive actions. Our new report maps out some of our expectations for state action in 2025.
Anti-ESG politicians and groups are continuing to push their costly “anti-woke” agenda on pensioners and taxpayers in 2025, and our new report identifies some new tactics we may see this year. Expect them to pretend to be pro-farmer, weaponize civil liability, ramp up anti-DEI attacks, and aggressively demonize clean energy — with help from Trump federal appointees.
Some bills are already in play: Wyoming’s HB80, which the far-right Freedom Caucus is promoting despite a projected $1.16 billion cost to the state retirement system; and a New Hampshire bill which saw no testimony in favor in a hearing.
Expect powerful opposition to anti-ESG this year, like last year, from investment managers,banking associations, retirees, and climate advocates, all of whom understand that ignoring climate risk is expensive and irrational.
Read the full report here.
Pleiades’ Frances Sawyer: “Climate risk is financial risk. This is not an abstract far-off concept but a personal story for so many Americans now, as climate-fueled extreme weather disasters from Hurricane Helene to the LA fires have shepherded economic devastation in the wake of the heartbreaking loss of life and homes. Anti-ESG policies continue to be unpopular because they seek to legislate that up is down and down is up while leaving communities, families, and retirees to cover the costs.”
2. Federal Spending Freeze Sends Nation Into Chaos
Trump’s executive order unconstitutionally suspends nearly all spending, bringing both state and federal programs to a halt.
Tuesday was DEFCON 1 for normal operations of government and executive power. By seizing the power of the purse in a poorly-worded and likely unconstitutional executive order, Trump created intentional chaos and confusion in every state and sector. This followed Trump’s attempt to unilaterally block all IRA disbursements a week ago.
The freeze is already in litigation; the White House withdrew a memo about it but then claimed the underlying order was still in force; one judge has temporarily blocked it, and a second judge is reportedly preparing to do the same.
Billions in clean energy grants and tax credits are at risk if Trump’s political moves are upheld by the courts. Even with the EO withdrawn, key programs are still illegally stalled, such as the $7 billion already contracted through the EPA’s Solar For All program, which supports local solar projects that reduce energy bills in low income communities.
3. Regional Collaborations Spark a Green Industrial Renaissance
Labor-community-industry coalitions are forming around decarbonization.
Climate Jobs Colorado is working with unions to maximize wages and benefits and ensure safe working conditions for workers transitioning into green jobs. Collective bargaining is focused on getting workers what they need to spread the economic benefits of Colorado’s green energy transition while also raising the bar for workers across the West.
In Minnesota, we could soon see the first fully integrated 1 GW hydrogen-based green iron plant, which would provide a path toward secure, low-carbon iron for the U.S. steel industry. The group coming together to construct it is the Midwest Industrial Transformation Initiative, a first-of-its-kind collaboration between research, industry, local communities, tribes, and government partners.
And in Pennsylvania, Governor Shapiro announced his Lightning Plan, a cross-sector collaboration to build Pennsylvania’s energy future, starting with a $1.5B project to accelerate hydrogen and sustainable aviation fuel production..
The common ingredients in these burgeoning partnerships are labor and local community leadership, regional collaboration, and big ambition.
4. Will Southern California Move Beyond Fossil Gas?
Where fires burned, we can build back safer, cheaper, and better by finally ditching gas.
Many of the expensive and aging gas networks that connected now-leveled neighborhoods in and around Los Angeles were damaged or destroyed in January’s fires. Gas is yesterday’s energy source, and the gas networks don’t have to be rebuilt: restored neighborhoods can and should be electrified instead, given that gas is a risk to human health and safety in addition to being a climate-unfriendly choice.
Despite state and city proposals to roll back electrification requirements in building codes to speed redevelopment, building back electric is still safer and cheaper than gas. And in neighborhoods that are being substantially rebuilt, powerlines can be buried underground cost-effectively, which reduces fire risk and can mitigate insurance costs.
Interdisciplinary energy scholar and Angeleno Joshua Lappen: “Likewise, rebuilding these places is going to raise not only locally-specific questions of wildfire safety, adaptation, and retreat, but also universally-applicable questions about energy provision and decarbonization that every American city will eventually be forced to confront.”
5. Snowy in the South
Warm-weather states aren’t built for extreme weather.
Last week’s polar blast shocked the Southern U.S., bringing snow to places like Pensacola and New Orleans, which each received over 8 inches of snow (more than parts of Alaska have gotten all January). Homes in these otherwise warm areas are simply not built for freezing temperatures, snow buildup, or ice; and when a hard winter comes, residents see high utility bills along with home damage and personal danger.
Winter storms (snow, hail, rain) account for a plurality of home insurance claims nationwide, but many insurance policies have exclusions for extreme weather, so insurers deny payments and leave residents on the hook for costly damages.
The national insurance crisis is growing more acute everywhere, but Florida is on the leading edge, with rates going up 60% since 2019 due in large part to climate losses – and causing many to forgo insurance entirely.
6. Rural Cooperatives To Benefit From Clean Energy Investments, New Financing Opportunities
The USDA’s New ERA program busts through historic barriers to rural electric cooperative financing.
The New ERA program has invested in rural electric cooperatives: driving local economic growth and energy affordability in communities across the U.S.
As Pleiades founder Frances Sawyer told the New York Times last week, these programs have unlocked financing opportunities for cooperatives through grant and loans, elective pay provisions that give cooperatives direct access to clean energy tax credits, and capital to help refinance expensive coal debt.
Daniel Bresette, president of the Environmental and Energy Study Institute, called the federal funding “a big, powerful shot in the arm.”