New York, Cuomo are leaders in ESG and Washington should take note
The morning after Memorial Day, New York Gov. Andrew Cuomo reopened America’s economy at a pop-up table in the New York Stock Exchange. After ringing the bell returning traders to the floor for the first time since the onset of the public health crisis, Cuomo delivered the defining speech on economic growth for the COVID-19 era. We would, as a nation, invest in infrastructure-driven economic growth by unleashing the potential of Americans who have been worn down but not counted out.
Such an approach may seem common sense today. It was not in 2011 when Cuomo first took office. To the contrary.
In fact, no other elected leader has ever made an all-in bet that strategic, rigorous and targeted infrastructure investments would drive economic growth which would, in turn, produce community cohesion. This strategy was entirely untried and thus untested in 2011. This was a risky strategy for an ambitious politician to take at the age of 53.
Cuomo had inherited one of the most balkanized sectionalist diverse economies in the world. The vast wealth of Wall Street sat alongside abject poverty. It has untold diversity including its myriad cities, suburbs, rural regions, and tribal communities. Governing New York is, in important ways, like running the country. No wonder that four of its governors have become presidents, including Theodore Roosevelt and Franklin D. Roosevelt.
Since 2011, Cuomo has mastered a formula for driving economic growth through infrastructure investments. It is what global financial institutions, including pension funds, call Economic, Social and Governance investment decisions. In common vernacular, it is called investing in the American Dream.
For Cuomo, it all boils down to three elements. Provide sizable opportunities for pensions, sovereigns and insurance funds to drive money into infrastructure projects through money managers via debt and equity vehicles. Second, foster a progressive energy future. Third, provide economic opportunities to financial and construction firms owned by women, people of color and veterans. Tied, put in place career ladders into economic affluence for our brethren.
Global finance firms are then investing into the American Dream or, ESG. For this reason, the rebuttable presumption of these investors must be that Cuomo’s portfolio of projects are ESG compliant. Today, one of the shortcomings of the ESG discussion is that investors put talk before action. New York provides an opportunity to get the sequencing right.
These global investors will be rewarded. They already are being rewarded. On June 14, Cuomo cut the ribbon on the first terminal of a multibillion-dollar modernization of LaGuardia Airport. The modernization of John F. Kennedy got started to the tune of over $12 billion. The $1.5 billion Jacob Javits Center is 75% complete. An $8 billion Penn Station transformation is on its way.
The governor will bring renewable hydro energy from Canada to downstate New York’s costly market. The state will drive the modernization of the East Coast Amtrak Corridor connecting Massachusetts, Rhode Island, Connecticut, New York, New Jersey, Pennsylvania, Delaware, Baltimore and the District of Columbia.
Cuomo is a national leader in innovative community infrastructure. He is establishing innovative public-private partnerships with public educational institutions. Cuomo has forged partnerships between small businesses and Cornell’s Center for Material Research, itself a land grant university. Career ladders to opportunity are a signature feature of these projects. SUNY Empire State College has established a route into cutting edge careers for students at Finger Lakes Community College majoring in networking and cybersecurity.
In the Brooklyn Navy Yard, students at Medgar Evers College are primed to drive innovative manufacturing processes.
The New York Metropolitan Transportation Authority is a key entity within Cuomo’s ESG portfolio. It encompasses the boroughs of New York City through its subway system and key parts of the state through its railroad system. The MTA runs up Connecticut. It is the connective tissue with New Jersey.
The MTA is at the heart of the region. The rhythm of the system today revolves around the travels from home to work and back of our first responders. New Yorkers of all backgrounds and incomes run the system. Disadvantaged business enterprises resource 30% of its contracts.
In other words, an investment into the MTA is an investment in the American Way. These discussions in Washington, D.C., over whether to support the Authority are nothing more than an unfortunate impulse to debase our national character.
The federal government should be financially fueling the MTA rather threatening to punish it for protecting its public integrity as emergency infrastructure.
One of the most important vital discussions though tied to the governor is occurring within financial circles.
Wall Street is no longer simply the Easy Street of Reagan and his progenitors. Gov. Cuomo’s decision to present his economic growth strategy at the stock exchange is thus of great import.
Cuomo has created a new class of private money managers and investors. These contenders are fighting to place their money into his New York portfolio. The state itself represents a supremely prized portfolio of ESG assets. At the same time, these new contenders are fighting also for America’s entire ESG portfolio. Global financial firms will drive much of their investments through this new Wall Street.
This new Wall Street will flourish economically because it will adopt Cuomo’s investment hypothesis: e pluribus unum. We, as a nation, stand on this hypothesis; that is, economic empathy means the appreciation of fortitude in one another and the indelible strength of our combined catalytic force.