Moving violations causing climate detours
Ignorance is no defense when breaking the rules of the road
When you get behind the wheel, you have explicitly agreed to binding law.
Red lights mean stop, green go. Etc. Make way for emergency vehicles to pass. Exercise the “due care” and caution that any ordinarily reasonable and prudent person would use under the same driving circumstances — to avoid accidents and injuries caused by your 4,000-pound/1,800-kilo vehicle and charges of negligence.
There are a lot of driving rules.
Not that we think of those rules when jammed up on the Brooklyn-Queens Expressway. It's rather like those pesky boxes you must check to agree to terms and conditions before you can proceed on the infobahn — the small print that you never read but might come back to bite you in the bumper. You have signed your name to a driver’s license to certify your agreement to abide by the rules of the road.
“But, officer, I was merging into traffic so I had to speed.”
“But, officer, the No Left sign wasn’t there yesterday” — which was actually the case.
Travel just one mile or kilometer per hour over the posted limit, make an illegal turn, drive without a seatbelt fastened or with a taillight missing: It’s all your fault, whatever the extenuating circumstances. You have breached the legal standard, making you liable to a penalty however unfair you might consider it. The traffic court judge, should you challenge the ticket, will rule in favor of the law that you broke by whatever small amount you, rather than the rules, deem immaterial.
Just pay the fine. You have no excuse for ignorance next time you get pulled over. Even so, obliviousness of the rules of the road is never a defense — which is a handy and relevant life lesson for other drivers in a human society with rules that require “due care and caution”.
For example, there are only maybe 2,000 pension fiduciaries in the whole wide world driving $25 trillion to $30 trillion in global financings recklessly, in contravention of their own rules of the road, and back-and-forth over their youngest clients.
This is the opportunity for future retirees witnessing how their own pension deductions today are detouring their promised dignified future retirements. They have the power to hit the brakes.
Bank of Nature’s pitch is to pay for climate security with the legal tools and financial resources that we already have on hand and already work at the scale of the climate crisis. “Pensions are untapped climate heroes.”
Our big talk is that ubiquitous common fiduciary practice that controls tens of trillions of global, mission-based pension money is non fiduciary. In fact, fiduciaries have been in breach of their own “rules of the road” for 50 years.
These few imprudent fiduciaries, representing just 0.000025% of all Earthlings, are speeding in a school zone that cops don’t monitor. Any which way you cut it, caught or not, what they are doing is against the law and they are liable for it.
But, officer, everyone else is driving just as fast because it gets us to the end faster.
Then, where are you headed in such a hurry that you’re breaking laws?
Well, not sure. But, that’s not the point is it?
Guess not, carry on.
We don't have to look hard for the infractions and free passes.
Cruise control
There is this enveloping and unsubstantiated notion that fiduciaries of defined benefits plans worth billions and trillions are doing what they should and all they can for their beneficiaries. How does US President Biden put it? “A bunch of malarkey.”
Default procedure — a kind of mindless cruise control — dictates in error that fiduciaries must maximize returns (without defining returns as solely financial) regardless of the negative consequences of that financing activity. The law in Massachusetts, for example, requires that public pension fiduciaries manage against loss (again, without defining loss as solely financial). Either way, the legal language is not explicitly about just the money.
Our fiduciary standards legislation in Massachusetts is a challenge to the status quo assumptions about what is and is not fiduciary. It was recently put into a study limbo, which means that it’s stalled until we try again. We filed it to steer the Commonwealth’s $100-billion pension fund toward climate security for its 300,000 pension participants who will live and do live with the impacts of how that $100 billion is deployed in the world. About 1,999 other fiduciary (or fiduciary boards) across the globe need the same legislative guidance.
There is no imperative to grow at all costs — the fallacy that encourages fiduciaries to breach their obligations to finance anything based only on its speculated money returns without also accounting for the non-monetary damage to the future. That’s one mechanical failure.
As an added malpractice affront to the law, most (if not all) fiduciary “asset owner” money moves through “asset management” companies like BlackRock, Fidelity or Vanguard in order to achieve this financial-only fiduciary goal. Laws encourage fiduciaries to seek financial expertise, but they don’t say, “Give everything to Larry Fink.” Allocating pension money to a single industry like asset management fails the risk-mitigating diversification requirements of Modern Portfolio Theory.
A third oops is that asset managers are not fiduciaries for the purpose of providing financial expertise to pension boards. Suggestions otherwise are misrepresentations of what an asset manager in the defined-benefits pension sector is. That is a third-party, non-fiduciary vendor paid commissions and fees for financial expertise. Fiduciary boards are abdicating their fiduciary duties, a no-no, to non-fiduciaries whenever they wire their billion-dollar investments to the vendors’ accounts expecting only +6% back no questions asked.
Lastly, all this common fiduciary practice presupposes that gambling pension money on Wall Street is prudent. We say it isn't prudent: There are more direct ways to cultivate a society of loyalty, care and impartiality. Even the most strident climate activists seem stuck on the idea that abstracted, speculative, market-based solutions are a climate remedy — when they just are not big enough. They are just spinning their wheels. It’s an example of wanting to change the system without actually changing the system.
Fiduciary duty, as a legal lever, is already argued in support of divestment and ESG campaigns but not, as we say at Bank of Nature, for the prudent quantitative and qualitative stewardship of a dignified retirement owed to eligible retirees.
Propping up share prices for green companies is not the same as cultivating a future of climate-security. Fiduciary money can lead the latter, but doesn’t. This is the Bank of Nature difference and our antidote to the neoliberal economics that amplify the worst, climate-dimming corporate and policy actions — all with the help of global pension money.
Fiduciaries are not keeping their eyes on the road.
Their rules of the road are not the same as Larry Fink's rules of the road, nor Google’s nor the White House’s. Fiduciary money has different design parameters that are not recognized in common practice.
It's one galling reality for a corporate titan to despoil the environment with the blessing of a government permit, but it’s objectively non fiduciary for a pension plan to finance that despoiling if it hurts the future. It doesn’t matter how good the returns are if the future — anywhere from tomorrow to 2100 — is in any way diminished by earning that ROI.
That is the definition of a breach of Impartiality. Young civil servants owed a future pension should be outraged. They aren’t so far, of course. Retirement planning is not the first thought right out of school — but we all win if it were. They don’t know yet that they hold all the power to make real the benefits of Long Termism in how we run a global economy.
Review mirrors
All legal challenges are about adjudicating the right and wrong of past deeds that violate the law. You turned illegally left before you got the ticket. In our case, the past misdeeds are decades old. US courts don’t like the long “look backs”, explains Cornell Law School, because of protections under Fifth Amendment due process clauses. However, “courts may allow retroactive application of statutes, regulations, or standards under certain circumstances.”
So, if an action is technically illegal at the time it happens, but not challenged, then it's vulnerable to a look back by future plaintiffs. There is no defense for not knowing the rules of the road.
We presently live with the climate consequences of 1970s investments by vast fiduciary funds in a post-oil crisis money grab and government sanctioned anti-climate energy priorities. Breaches of impartiality were illegal even then. In theory anyway, pension promisees can make the case now that they are people in a climate-harmed future created by faithless fiduciary choices 50 years ago that had the responsibility of curating something better.
Climate Safe Pensions says pension funds are presently “among the largest institutional investors in fossil fuels” holding 30% of all fossil fuel shares traded on a stock market.
By that math,
With a global oil-and-gas sector boasting a $7.14-trillion market capitalization, pension funds hold $2.14 trillion in share value
With defined benefits pensions worth about $25 trillion globally, 8% of total defined benefits global value is supporting oil and gas — right now.
Spent in a fiduciary way, what does that $2 trillion pay for via enterprises that offer both good returns and contributions to climate security?
A better global climate.
Vehicular manslaughter
While a traffic court judge will make you pay a ticket, a civil or criminal court can impose a change in fiduciary behavior — getting closer to the ideal of fiduciary as a climate hero. While financial penalties might be an option, depending on the judge, the most likely outcome is “injunctive” relief — forcing a change in fiduciary choices to align with fiduciary law. That’s good.
That doesn’t just create trouble for climate-dimming enterprises to raise money on a stock market like ESG or Divestment campaigns, but Bank of Nature’s initiative is to take away the billions and trillions that should not abet companies working against the future in the first place.
You can’t speed if you don’t have a car. Fiduciaries of defined benefits plans that fail our fiduciary review will literally defund anti-future enterprises. How will oil and gas react when their key funder has to switch fiduciary gears? If the fiduciaries aren’t going to self-regulate, then their youngest clients — the people still working and paying into a retirement promise not due for another 40 years — can and should designate compliant drivers and look back as far as the statute of limitations allow to show the non-fiduciary trends and their accumulated damage.
Another way to think about retroactive litigation — and challenging illegality in history — is to itemize the non-financial costs to the future. That includes loss of life by a human-made climate crisis, paid for by today’s fiduciaries working against their own “rules of the road.”
International human rights law says crimes against humanity or genocide have no statute of limitations — meaning that such a crime could be litigated at any time. It won’t happen, of course, in the same way war machine makers are not legally culpable for war or school shootings. Post-atrocity, it’s all too vague to litigate the gun makers and their provable offenses. Still, blue-sky creative examinations might ask:
Do investments in Saudi Aramco make you a party to climate-related genocide now or in the future?
Does the policy protection of anti-climate oil and gas jobs and/or paid subsidies to the fossil fuel sector make you a party to climate-related genocide now or in the future?
How do the guilty pay for their crimes against humanity?
When the rules are written for certain protections — like a future quality of life — then hindsight has ample evidence that those rules are and have been willfully breached. The only people who pay for this illegality are the people who must live with the consequence of that illegality rather than the long-dead perpetrators.
That makes no sense to me if you live in a crime and punishment society like ours. Eight billion people headed toward a climate dystopia of our making are cast off as collateral damage — the wrong-place-wrong-time innocents also killed in the blast. No one is to blame for that? The fiduciary rules as written, however they may be overlooked, identify the culprits and abettors who have, on their own, the billions and trillions that make or break the future.
The non-fiduciaries may insist that’s how it’s done, but someone in the future is going to say “but those are not the rules of the road” and weren’t the rules of the road in 2024. Maybe that scrutiny comes tomorrow and a whole lot of money will have to drive toward climate security instead of a wall.