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Russia’s attempts to influence American politics in recent years is no secret, particularly when it comes to energy production. Which is why you’d expect policymakers to ensure proposed regulations stay clear of any association with the oppressive regime, especially in the wake of Russia’s war in Ukraine. However, the Securities and Exchange Commission (SEC) apparently is failing with its proposed climate disclosure rule. The following continues our series reviewing the questionable sources cited within the commission’s rule. Our recent analysis conducted in the course of drafting our comment letter shows that significant crossover exists among the organizations funding the seven major climate initiatives cited in the proposed rule. The global network of non-profits that are pushing climate change policies through financial regulation are backed by numerous well-known activist philanthropies and climate groups that have pushed Keep-It-in-the-Ground policies for several years, such as Bloomberg Philanthropies, Environmental Defense Fund (EDF), New Venture Fund (NVF), Rockefeller Brothers Fund, and William and Flora Hewlett Foundation. Notable among this group is the Sea Change Foundation, which describes itself as a private family foundation that’s based in Bermuda and dedicated to addressing climate change. However, it’s been accused of being a front group for Russian climate lobbying in the U.S. Sea Change is a funder of climate initiatives that include the Asia Investor Group on Climate Change, Ceres, Investor Group on Climate Change, and UN Principles for Responsible Investment, all of which are cited by SEC as sources that are demanding climate disclosure regulations like the agency proposed. Concern about the group’s involvement in U.S. policy recently arose when Sea Change was prominently featured in a March 31, 2022, letter from 20 members of Congress to House Oversight Committee Chairwoman Carolyn Maloney (D-N.Y.) requesting a hearing “on the coordinated attempts by Russian entities to buy influence and finance U.S. environmental non-governmental organizations (NGO) in an effort to reduce the energy security of the United States.” The lawmakers wrote, “a Bermudan shell corporation known as Klein Ltd. was used to siphon millions of dollars to an environmental NGO called the Sea Change Foundation. This shell company was specifically tied to the Russian government through one of its directors, Nicholas Hoskins.” According to Business Insider, Hoskins served as “the vice president of a London-based investment firm whose president until recently chaired the board of the state-owned Russian oil company Rosneft” and was “a director at a hedge fund management firm that has invested heavily in Russian oil and gas.” As a result of these positions, Hoskins has been deeply vested in the economic success of Russian oil in addition to being connected to its government. Hoskins formed Klein Ltd, according to research conducted by Environmental Policy Alliance. Lawmakers noted in their letter, “According to IRS tax filings from 2010 and 2011, Klein Ltd. donated $23 million to the Sea Change Foundation and was responsible for almost 50 percent of contributions made to the organization during those years. This organization gave $100 million in grant money to environmental groups, such as the Sierra Club, the Center for American Progress, the US Climate Action Network, and the Natural Resource Defense Council, with the purpose of reducing ‘reliance on high carbon energy.” Each of these groups has lobbied to end oil and natural gas production in the United States and are part of the broad Keep-It-in-the-Ground network. Based on these connections, lawmakers stressed, “It is critical that Congress gains a better understanding of the role that Russian financing has had in shaping American environmental policy and sentiment.” It’s regrettable enough that President Joe Biden actively lobbied Russia to increase its exports of crude oil to the United States in the months leading up to the invasion in Ukraine. With all the atrocities Russia has committed, SEC should not compound the situation by justifying financial regulations by citing to a network of sources that’s tied to multi-million dollar lobbying campaigns designed to limit American producers and benefit Russian producers, and by extension, the Russian military. Before moving forward with this rule, SEC should allow lawmakers to conduct appropriate oversight so the commission can fully understand the scope of influence our strategic adversaries have in advancing climate change regulation that would saddle American companies with over $10 billion in regulatory costs. This is the third in a series of posts on SEC's climate disclosure rule. Read the first post here.
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