Climate Change Denial Versus Fiduciary Duty

By forbidding its staff to mention climate change while at work, the trustees of a Wisconsin public agency are failing at their role as fiduciaries.


The Wisconsin Board of Commissioners of Public Lands (BCPL) — a state agency that manages more than $1 billion in public funds and 77,000 acres of public lands, the income from which is used to fund Wisconsin’s school libraries and the state university system and make low-cost loans to municipalities and school districts — voted in early April to prohibit its staff from mentioning climate change while on the job. In addition to being ideological, this decision was feckless and feebleminded. Trustees have fiduciary responsibilities that include paying attention to material risks, regardless of whether those risks fit one’s political biases.

State Treasurer Matt Adamczyk, one of the three members of the board, explained the global warming gag order as follows: “[Climate change is] not a part of our sole mission, which is to make money for our beneficiaries. ... That’s what I want our employees working on. That’s it. Managing our trust funds.”

Exactly. Adamczyk is a trustee. As such, he is obligated to protect the assets of his beneficiary, the State of Wisconsin. That includes minimizing the beneficiary’s risk of financial loss.

Climate change and its attendant economic risks are real. The Securities and Exchange Commission, former secretary of the Treasury Hank Paulson and the U.S. military have all acknowledged the economic materiality of the climate crisis.

By prohibiting the BCPL’s staff members, who are charged with the day-to-day management of public money and land, from even remarking on climate change’s implications for their work, Adamczyk and his colleague Attorney General Brad Schimel are behaving in contravention of their duties as fiduciaries. They have left the BCPL staff dangerously hamstrung and, consequently, have put public assets at risk. Presumably, this is something that Schimel, Wisconsin’s top lawyer, considered in making his decision.


Fiduciaries are not expected to be clairvoyant, but they are expected to behave like similarly situated prudent people who are familiar with such matters. Such a standard reasonably includes paying attention to general global trends. And a summary glance at the newspapers today reveals that 97 percent of climate scientists agree that climate change is caused by human activities and has catastrophic implications for human civilization. That means expensive and destabilizing risks across all sectors, markets and firms. Commodity price volatility and disrupted supply chains can rattle manufacturing. Natural disasters and erratic weather can shock global financial markets. Expanded ranges of pests can impact timber and agriculture. Valuable real estate can be eroded or inundated by sea level rise. Climate change–driven migration and rising temperatures can shake labor markets. The oil and gas sector faces the risk of federal carbon emissions regulation and the challenges of a growing renewables sector.

All of this will impact U.S. portfolios, including those of the BCPL — not to mention the forests that the BCPL manages. Though there isn’t a specific prescription for how to address climate change in one’s portfolio, putting one’s head in the sand is not considered best practice.

We might indulge harebrained demagogues their bogus positions on carbon pollution, but adults who have assumed responsibility for managing other people’s money are held to a higher legal standard — the highest legal standard in U.S. jurisprudence, in fact. Fiduciaries must be sober, vigilant and competent. They don’t get to ignore real life when it doesn’t comport with their free-market orthodoxy. The U.S. political right, to which Adamczyk and Schimel belong, trumpets itself as scrupulous, dutiful and no-nonsense, prepared to review the bad news and make the hard decisions. The right-wing self-image sounds like the perfect fiduciary.

Alas, men like Adamczyk and Schimel embody perfectly what the ascendant element of this tradition has actually become: sloppy, vainglorious and incapable of appreciating, much less responding to, the central dangers faced by those they are legally bound to serve. They are not fit for the role of steward. They are best fit for a playpen.

By forbidding BCPL staff to mention climate change while at work — and committing the decision to public record no less — these men have produced a compromising fact pattern that suggests a very interesting and well-deserved lawsuit. If lawyers really are sharks, then some no doubt smell blood.

Marcie Smith is the executive director of the Responsible Endowments Coalition, a Brooklyn, New York–based organization that works to effect social and environmental change among college and university endowments.