❮ Return to Our Work

Blog Post | April 19, 2021

In Latest Disappointment From Yellen, John Morton Is Treasury's New Climate Counselor

2020 Election/TransitionClimate and EnvironmentFinancial Regulation
In Latest Disappointment From Yellen, John Morton Is Treasury's New Climate Counselor

The U.S. Treasury Department announced today that John Morton would be appointed as its first Climate “Counselor,” tasked with organizing financial-related climate work across the executive branch’s financial regulators. 

Climate activists were encouraged when, at Treasury Secretary Janet Yellen’s January 19th confirmation hearing, she promised to appoint a “very senior-level” official to lead a climate “hub” at the department. Environmentalists waited with bated breath as nearly 13 weeks passed, the dire state of the climate emergency worsening by the hour. 

But Morton is unfortunately a net negative for the desperate and urgent cause of planet preservation (pun deeply intended). 

Morton would likely characterize himself as an environmentalist — he was formerly the White House senior director for energy and climate change at the National Security Council, is a Partner at a climate change “advisory firm” which counsels businesses on how to profit from climate advances, and has expressed an understanding of the need to transition to a global low carbon economy.

Indeed, there is an urgent need for the public to understand exactly which clients Morton has worked for. As an ethical obligation to ensure transparency, he should release a full list of clients publicly by the end of this week.

But Morton is not an environmentalist in any sense of the word — his faith that neoliberal free-market practices, albeit with some nifty green investing thrown in, will solve climate change is completely out of touch with science and reality. And when climate change is so deeply destabilizing to the global financial system and the financial status quo is contributing to climate disaster in a devastating manner, there is no time to waste on the same strategies that got us into this mess.

Judging by his work history, John Morton deeply believes that Earth’s precious natural resources, materials that the UN has designated as literal human rights, should have a price tag — no matter that the profit model of the fossil fuel industry, which is to give literal fossils a financial value and drill, frack, mine, and pollute as if the Earth’s resources are infinite, is exactly what has driven us to the brink of climate apocalypse. 

Since March 2020, Morton has been a Partner at “Pollination Group,” an investment firm that intends to navigate the climate transition by “design[ing] and invest[ing] in breakthrough ideas that deliver financial returns.” Pollination Group recently joined forces with HSBC Global Asset Management to create an asset management venture focused on “natural capital”. Its goal is to put a financial value on water, soil, and air in order to “protect” the environment. If that sounds both ridiculous and horrifying, that’s because it is.

It is difficult to understate how dangerous this idea is. The climate crisis is already hitting vulnerable (poor, Black and Brown, Indigenous, frontline) communities the hardest. Allowing these resources to come under corporate control could further limit access to the critical resources — clean water, breathable air, and soil which can grow safe food — that climate disaster will render scarce. If Morton is able to set this as the United States’ policy for responding to the changing climate, the potential knock-on effects for decades to come could be monstrous.

Morton views the transition to a sustainable economy as a “competitive race” which he says will have winners and losers. “The question is, the speed at which [the transition] will occur and who will be the winners and losers from a technology standpoint, a business standpoint, sector standpoint and indeed… national standpoint.” And it’s clear that Morton sees value in this, considering his work at Pollination Group was precisely to assist clients in squeezing profits out of the transition to a green economy. For Morton to not only acknowledge that some nations will win and some will lose, but also to imply that the U.S. should be a winner at the expense of other countries, is deeply disturbing.

It should not have to be said that preserving a livable planet for everyone is a worthy goal regardless of the financial gains, regardless of if our country “wins”, and regardless of which businesses profit the most. The climate leader at Treasury, if they are following the facts and are committed to protecting financial stability, will inevitably run into anger from the powers that be and must be willing to charge forward regardless. 

It is no surprise, however, that Morton has such faith in the private sector capitalism which got us to this point. He is a serial revolver — moving back and forth between public service and private business upwards of four times. Considering his history using government expertise to assist private corporations and, in turn, remaining loyal to the private sector while in government, it is worrying but not shocking that he appears to not yet comprehend that a market-driven response to climate change dooms us to a non-response

Morton spent two years between 2002 and 2004 as an investment officer at Global Environment Fund (GEF). Contrary to its appealing name, GEF is a global private equity fund manager “focused on seeking superior long-term financial returns by investing in businesses that advance resource or energy efficiency and safety and security.” Their definition of safe resource investments includes natural gas assets. While working at GEF, Morton was simultaneously the Director of National Security for John Kerry’s 2004 presidential campaign. Prior to private equity, Morton worked for Mercer Management Consulting (now Oliver Wyman), a management consulting firm under MarshMcLennan.

Also concerning is Morton’s status as a Senior Fellow at the Atlantic Council, an industry-funded think tank, which receives sizable donations from corporations including Chevron, BP, ExxonMobil, Cheniere, BlackRock, JP Morgan Chase, Facebook, Google, and Raytheon. It recently produced a report commissioned by Trump’s Secretary of Energy that recommended the administration expand nuclear power, natural gas exports, and oil and gas exploration. This variety of bought and paid for, anti-scientific advice should have no place in the Biden administration. 

The prospect of John Morton leading the financial regulatory response to climate change is also worrying considering his glowing praise of Brian Deese, former professional greenwasher for asset manager and climate destroyer BlackRock, and current leader of the National Economic Council. Morton called Deese’s appointment “promising,” and said that Deese “understands climate change, understands what the levers are that need to be pulled.” He even went as far as to say the more people like Deese who staffed the government, the more likely climate policy was to be “successful and cohesive.” 

This presents quite the conflict. BlackRock has spent years trying to convince the public they are on the side of climate action while at the same time making it less likely that necessary climate action will occur, given their massive fossil fuel holdings. Deese was paid $4.8 million between salary and vested stock units in 2020 — an exorbitant salary even by Wall Street standards, all ostensibly to add a few climate-related disclosures to BlackRock offerings, while making plentiful television appearances whenever BlackRock was getting bad climate-related press. A savvy operator like BlackRock CEO Larry Fink does not compensate this generously unless he’s getting a particularly valuable asset. The only probable explanation is that Fink knew Deese was up for a major job in the next Democratic administration, which was arguably the primary reason Fink hired him in the first place. For Morton to endorse and take pride in this speaks to what he views as acceptable “business as usual” wheeling and dealing. 

Further, BlackRock has spent nearly a decade trying to keep itself from being designated a “Systemically Important Financial Institution” (SIFI), which is a label saved for financial institutions deemed “too big to fail” and thus requiring increased oversight and regulation. After the Treasury Department’s Office of Financial Research produced a red-alert report on large asset managers implying BlackRock deserved SIFI designation in 2013, BlackRock got to work lobbying to ensure they could avoid the increased regulation that could possibly cut into their profit margins. 

As a “very senior-level” official in the Treasury Department, Morton will undoubtedly have Yellen’s ear on matters such as SIFI designations. It is therefore extremely worrying that Morton appears to admire Brian Deese and thus BlackRock’s private-sector leadership.

Regardless of Morton’s conflicted past, what might be most concerning is what his professional experience lacks — financial regulation. What does it say about Janet Yellen’s seriousness when it comes to climate change that her most senior-level official tasked with incorporating climate risk and climate action into financial regulation has no experience in the complex world of regulation?

With no relevant experience and apparent full-fledged trust in private markets to solve climate change, John Morton is about as contrary to Sarah Bloom Raskin, the climate leader and financial regulatory expert that many climate experts supported for the job, as one could get. 

For Janet Yellen to know full well that climate and financial regulatory activists were lining up behind Bloom Raskin, and then for her to wait nearly thirteen weeks before appointing someone who literally wants to put a price on water, is a stinging dismissal of the reality of climate change and its potential to wreak havoc on financial stability, not to mention humanity. 

Yellen’s tenure is off to a disappointing start. She must change course immediately if the Treasury Department is to be a positive part of Biden’s promised whole-of-government approach to fighting climate change.

Photo: “John Morton” by New America is licensed under CC BY 2.0

2020 Election/TransitionClimate and EnvironmentFinancial Regulation

More articles by Dorothy Slater

❮ Return to Our Work