GIVE AND TAKE — We all know there’s no such thing as a free lunch, so it should come as no surprise that the conference-closing win claimed by developing nations at COP27 came with strings attached.

The often-fractious 134-bloc of poorer countries kept beating the drum for loss and damage funding throughout this year’s U.N. climate summit in Sharm el-Sheikh, Egypt.

And they claimed victory when the United States and other wealthier nations agreed to create a fund to provide money and resources to recover from disasters linked to climate change, which they argued is largely the fault of legacy polluters.

“We are not here with cap in hand begging, this is not charity. This is an issue of climate justice,” said Molwyn Joseph, minister of health and environment for Antigua and Barbuda and chair of the 39-member Alliance of Small Island States.

But securing the historic deal meant bargaining with a small group of petrostates and emerging economies that sought to block the conference from doing much to mitigate global warming through stricter emission cuts. The final cover text reiterated an agreement from a year ago to phase down coal, but it also opened the door to natural gas.

As a whole, it barely held to a pact made at COP 26 in Glasgow, Scotland.

“The current text is not enough,” said Kathy Jetnil-Kijiner, climate envoy for the Marshall Islands. “But we’ve shown with the loss and damage fund that we can do the impossible. So we know we can come back next year and get rid of fossil fuels once and for all.”

Sara Schonhardt and Karl Mathiesen at POLITICO’s E&E News have more on the story.

DIVESTMENT IN THE DUST — Under pressure from California state lawmakers and environmentalists, the country’s largest public pension fund is bolstering its case for staying engaged with fossil fuel companies rather than divesting over their role in global warming.

Board members and staff of the $440 billion California Public Employees’ Retirement System appeared pretty content with the fund’s handling of climate and sustainability issues at a meeting last week, snubbing activists who’ve targeted its $7.4 billion of fossil fuel investments.

The standoff reflects the continuing tension around the question of how to use financial muscle to effect change: Can pension funds and other major investors accomplish more by walking away from companies that refuse to align with their goals or by working “from the inside” to help shape policies through shareholder proposals or using their influence in more subtle ways.

CalPERS bragged at the board meeting about its 30 percent reduction in weighted average carbon intensity for financed emissions since 2015 and touts engagement successes at fossil fuel giants including ExxonMobil and Chevron. CalPERS and the California state teachers’ retirement system have both opposed state bills that would have required them to divest. The latest effort failed this year.

The opposition from CalPERS and CalSTRS — the nation’s second largest pension fund — is a real roadblock for activists hoping the divestment movement can make the leap from university endowments to the financial system, where fund managers are bound by fiduciary duty to seek the best returns for investors.

“I think most individuals who choose to divest are doing it because it makes them feel good,” said Jonathan Berk, a professor of finance at Stanford. “I don’t know why universities choose to divest, maybe they’re giving in to student pressure. I think you’re better off engaging because potentially you could achieve some good, but divesting clearly is a waste of time. The idea that private companies are going to solve the environmental crisis is a little naive.”

SWINGING BACK TO PRO-ESG — The Labor Department issued a final rule on Tuesday rolling back a Trump administration policy that limited the ability of fiduciaries to consider environmental, social and governance factors in making investment decisions.

Labor Secretary Marty Walsh said the rule change makes clear that 401(k) plans and other investment vehicles “can take into account the potential financial benefits of investing in companies committed” to promoting ESG, POLITICO’s Nick Neidzwiadek reports.

Though the previous policy didn’t explicitly make ESG investing against the rules, Democrats and some industry groups argued that it had created a chilling effect.

Republicans likely won’t be happy with the Biden administration’s move. They’ve been pushing back against ESG investing at the state level, with some going as far as to stop doing business with investment firms like BlackRock Inc., and are poised to expand those efforts.

COAL EMISSIONS ON WAY TO RECORD — Coal-burning emissions are on track to set records this year, spurred by increased generation in Europe and India to replace fuel supplies cut off by Russia's war on Ukraine, reports Benjamin Storrow for POLITICO'S E&E News.

The International Energy Agency said the rise in coal use is “a worrying sign of how far off track the world is in its efforts to put emissions into decline towards net zero — especially the narrow but achievable goal of doing so by 2050.”

On the positive side, the United States continued to see sharp drops in its coal use. China, the world’s biggest coal market, meanwhile has been experiencing an economic lull, helping to dampen coal generation.

The Global Carbon Project says that coal this year is on track to produce 15.1 billion metric tons of carbon dioxide, which is more than oil and natural gas. Coal’s emissions had previously peaked at just over 15 billion tons in 2014.

Read more here.

GAME ON — Welcome to the Long Game, where we tell you about the latest on efforts to shape our future. We deliver data-driven storytelling, compelling interviews with industry and political leaders, and news Tuesday through Friday to keep you in the loop on sustainability.

Team Sustainability is editor Greg Mott, deputy editor Debra Kahn and reporters Jordan Wolman and Allison Prang. Reach us all at [email protected], [email protected], [email protected] and [email protected].

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PROGRAMMING NOTE: We’ll be off for Thanksgiving this Thursday and Friday but back to our normal schedule on Monday, Nov. 28.

—Saudi Arabia is investing in renewables at home in a way that may help it sell more fossil fuel abroad, according to the Financial Times.

— A Texas startup that styled itself as an “anti-woke” bank is shutting down, the Wall Street Journal reports.

—Researchers have linked wind turbines to the “thundersnow” that occurred during the massive storm that hit western New York over the weekend.