Most presidential candidates publish a hagiographic autobiography tying the personal challenges they’ve overcome to their policy goals and vision for the country. Vivek Ramaswamy’s Capitalist Punishment: How Wall Street is Using Your Money to Create a Country You Didn’t Vote For, released in April of this year, contains almost no information about who he is and fails to mention that he is running for president. Instead, the 240-page book mainly deals with contemporary issues in corporate governance law which are hard to imagine fitting neatly into a stump speech.

But then, Ramaswamy is an unusual presidential candidate running a strange campaign. He appears to be borrowing the strategy pioneered by the likes of Andrew Yang and Pete Buttigieg four years prior: project an image as a whiz-kid outsider, say yes to every media request, and support policies popular with the party base but ludicrous to policymakers. This strategy is serving him well; a recent poll put Ramaswamy in second place at 13 percent of the vote, ahead of household names like Ron DeSantis, Mike Pence, and Nikki Haley.

Buttigieg leveraged his long-shot campaign into a cabinet position, and Yang very nearly became mayor of New York. Where will Vivek Ramaswamy be in four years? If a Republican wins the White House, Capitalist Punishment seems to suggest Ramaswamy has his eyes set on an influential position at the Securities and Exchange Commission (SEC) or perhaps in the Department of Energy. Should his star continue to rise, Ramaswamy may be among the favorites for the nomination in 2028.

For this reason, the book is worth taking seriously. Its primary object of scrutiny is “environmental, social, and governance investing,” or ESG. This is a catchall term which has come to refer to everything from racial and gender diversity in boardrooms to investment in renewable energy infrastructure. Although the idea has been around for decades, it came into vogue in the late 2010s, when stock market index providers started creating ESG ratings and indices to entice socially conscious investors.

Capitalist Punishment has many villains, the most important of which are the asset managers BlackRock, State Street, and Vanguard (popularly referred to as the “Big Three”). Combined, they own about 20 percent of the average publicly traded company. Ramaswamy accuses these giant asset managers of two sins: greenwashing and the newly coined “greensmuggling.” The greenwashing phenomenon has been well-documented and extensively criticized from the left; either to provide a PR boost or to entice socially conscious investors, companies downplay their negative environmental impact and embellish their emissions reductions. Greensmuggling is, according to Ramaswamy, more pervasive and sinister. It occurs when funds not explicitly advertising ESG goals or strategies use their power as investors to implement a pro-ESG agenda.

Much of the book is spent making the case that greensmuggling is illegal for various reasons. Ramaswamy argues that asset managers are violating pension regulations by investing funds for any reason except the financial benefit of their beneficiaries; he claims that the large percentages of firms partially owned by the Big Three constitute an antitrust violation; and he asserts that the Big Three are breaking various SEC rules. Although it is hard to imagine Republican primary voters getting particularly incensed about these technical legal questions, one imagines that BlackRock’s lawyers will read these chapters with great interest should Ramaswamy manage to secure a position in the next administration or get a test suit in front of the ultraconservative Supreme Court.

The most interesting part of Ramaswamy’s polemic comes when he dispenses with the tedious legal theory and takes up the concrete problems of climate finance and the energy transition. Up until now, the relationship between asset managers and climate change has drawn little attention outside academia and the financial press. It was probably in the latter that Ramaswamy first discovered it. Matt Levine, the influential Bloomberg columnist whom Ramaswamy once attempted to hire as a biographer, has covered the issue extensively.

Why should asset managers care about climate change? Because, as fully diversified firms which own large stakes in all publicly traded companies, they are mostly immune to the risks facing individual businesses but vulnerable to systemic risks which affect the entire economy. If Exxon Mobil’s stock craters, it makes little difference to an asset manager which holds Exxon alongside hundreds of other equities. But if climate-induced natural disasters cause hundreds of stocks to crater, the asset manager is in big trouble.

Therefore, at least in theory, a firm like BlackRock has a strong economic incentive to prevent climate change, and the financial means to do so. The political scientist Benjamin Braun has called this new alignment of incentives “asset manager capitalism,” and the geographer Brett Christophers has shown how asset managers are expanding their influence from the world of financial assets to the world of real assets, especially housing and infrastructure. The legal scholar John Coates calls the concentration of power this entails — wherein a dozen or so companies control the entire economy — “the problem of twelve.”

Ramaswamy skillfully weaves these developments into a paranoid narrative that manages to squeeze in a vow not to eat bugs and a history of the World Economic Forum. In his telling, the liberal trustees of the largest American pension funds invest with the world’s largest asset managers on the condition that their liberal executives will call up CEOs and tell them to stop pumping oil and start doing racial equity audits. As an added bonus, the decarbonization of the economy promises to be lucrative for the asset managers, so they have an extra incentive to artificially raise the price of oil.

Of course, actual evidence of decisive asset manager action to spur decarbonization is limited. The strongest example Ramaswamy points to is a high-profile proxy battle in 2021, when the Big Three voted out the board of Exxon and replaced them with candidates put forward by the ESG-conscious Engine No. 1 hedge fund. Ramaswamy fails to mention that a year after its victory, Engine No. 1 voted against a shareholder resolution for Exxon to reduce emissions. Meanwhile, US daily oil production is projected to reach its highest level ever in 2024. If, as Ramaswamy suggests, asset managers are leaning on oil majors to cut production, they’re not doing a very good job.

That’s not to say that asset managers have no role in the energy transition. Private finance has moved to the center of consensus climate solutions in recent years. The Inflation Reduction Act, championed as the most important climate legislation in history, relies mainly on subsidies and derisking — that is, government guarantees of baseline revenue levels — for energy projects owned by asset managers. As Christophers has pointed out, even if such an approach is better than nothing, it is wholly inadequate, at best providing a little more than half of the funding that the IEA says is needed by 2030 to prevent 2 degrees of warming. In spite of the incomplete nature of a finance-led climate transition, a better solution looks unlikely in the near term. Advocates of climate action are thus left in the difficult position of defending asset managers from Ramaswamy’s partially justified attacks. Although he exaggerates and misrepresents some of the facts of the situation, Ramaswamy is correct that a climate transition organized by finance is undemocratic.

He employs these true arguments in the service of his false conclusion, a slick repackaging of the same old climate denialism. Referencing the debunked arguments of Steven Koonin and William Nordhaus’s heavily criticized DICE model, a framework which is unable to account for tipping points, Ramaswamy argues that continued fossil fuel production is economically and socially optimal.

It is only in the final chapter of the book, titled “Solutions,” that Ramaswamy approaches an actual policy to address “greensmuggling.” Rather than proposing an outright ban on the consideration of ESG factors, he argues that states should require money managers to obtain the express consent of capital owners to invest in an ESG-promoting fund. The resulting administrative burden would be enormous for pension funds; the California Public Employees Retirement System has two million members, and obtaining permission from every single one of them to make an investment would be impossible. This would likely force many large institutional investors to entirely avoid anything that could be called ESG. If Ramaswamy is the next SEC chairman, administrative tweaks like these could cut off much of the financing for the finance-led climate transition. In other words, we would go from a partial but incomplete response to climate change to no response at all.

Whether he continues his ascent through Republican politics or fades into irrelevance, Vivek Ramaswamy has succeeded in making the power of the finance industry over decarbonization a right-wing talking point. In the absence of a strong, democratic, state-led response to climate change, the idea of elite cabals of financiers imposing a new world order is only likely to grow in the popular imaginary. This should make climate advocates and asset managers alike nervous.