Steyer's passion for climate change didn't strike in a bolt of lightning. "I don't think there was one moment," he says. "My feeling was, I kept watching it and waiting for America to engage."
Not long after George W. Bush was elected president in 2000, Steyer met Chris Lehane, a former Clinton White House operative known in D.C. circles as the "master of disaster" for his crisis management during the Clinton years. Lehane became Steyer's informal advisor and sounding board for a speculative entry into the political arena. In 2003, Steyer briefly considered running for governor of California during the infamous recall election of Gray Davis, in which Arnold Schwarzenegger eventually defeated a woolly cast of candidates who included Gary Coleman from Diff'rent Strokes.
"We didn't think he could win," says Hume, "because it was going to be a short campaign, and Tom didn't have any name recognition, and he would have been tagged with the rich-hedge-fund-manager problem."
The year Bush was reelected, Steyer found himself on the receiving end of left-wing ire when student activists at Yale began investigating how exactly he made his money. During an internecine political battle with Yale management, the activists learned that a sizable chunk of the university's endowment was in Steyer's hedge fund. Consequently, they began a media campaign to embarrass Yale by attacking Farallon, accusing the firm of investing Yale's money in companies with anti-labor and anti-environment practices. They were soon joined by Steyer's other alma mater, Stanford, which also had millions tied up in Farallon. The anti-Farallon group started a website called unfarallon.info, a repository of negative news on Tom Steyer, and organized public protests and political theater events, one featuring a giant papier-mâché globe and a woman wearing a sign that read my name is farallon capital management, who used a hammer to smash parts of the Earth where Farallon allegedly caused ecological damage.
Steyer was stung, angry at being singled out as the go-to bludgeon to attack Yale. "Tom was so angry because it was a completely unfair smear campaign," says his brother Jim. "It woke Tom up, I think, to the fact that he could be used as a political pawn, and people would play politics even if it was irrelevant."
But in truth, the critique of his investments was not only relevant but also just the tip of the iceberg: As early as 2000, Steyer's fund had invested heavily in the energy companies developing the Canadian oil sands – the very companies he is now fighting.
Behind the scenes, Steyer and his wife were embarrassed because they were personally committed to social justice and environmental causes. Taylor was starting a community bank in Oakland and had begun to dabble in grass-fed, hormone-free cattle ranching (buying an 1,800-acre property in Pescadero, California, which they dubbed TomKat Ranch). Now Steyer's hedge fund compromised their moral purity. "It was a little flare going off in our minds," says Taylor. At the time, she says, they both thought, "One day we want to be totally aligned. We haven't earned that moment just yet, but we're going to get there."
But first he needed to find a new career so he could extricate himself from the conflicts of his fund without having to shut it down.
The next year, during the 2006 midterm elections, Steyer teamed up with Lehane and others for a Democratic fundraiser in San Francisco to support his friend Nancy Pelosi in her congressional reelection campaign. Taylor enlisted Jackson Browne and Bonnie Raitt to play at the party, later stealing the limelight by singing Billy Joel's "Summer, Highland Falls" a cappella.
Afterward, Bill Clinton stepped up to speechify and marveled, "How can I follow this?"
The Steyers were a hit. "Tom realized, 'Oh, my God, I really have the ability to influence things,' " says Jim Steyer. " 'I'm a player.' "
Steyer became a top donor to Hillary Clinton during the Democratic primaries for president in 2008 the following year. When Obama won, Steyer's name circulated as a possible candidate for secretary of treasury. Like his friend Bob Rubin before him, he would fit the profile of the Wall Street insider who knew how the economy worked from the trenches. But Obama demurred, picking Timothy Geithner instead. Jim, Steyer's loyal older brother, says Obama made a big mistake. "They should have listened to my brother," he says, "because he's smarter and richer than they are. It's that simple. Obama did not recognize Tom's talent. He will rue the day that he failed to recognize it."
Lacking traction with the new administration, Steyer decided to strike out on his own. In 2008, he was among a group of donors who gave $100 million to Stanford to build an energy research institute. He also began preparations for handing over the management of his investment company to a partner so he could clear the decks for a move into politics. In 2010, he co-chaired a campaign, along with then governor Arnold Schwarzenegger and former Reagan secretary of state George Shultz, spending $5 million to defeat a proposition that would have overturned California's aggressive greenhouse-gas-emission laws. He then underwrote a series of ballot initiatives in California, among them an initiative to close corporate tax loopholes and funnel the extra revenue into education and the environment. That one cost him $30 million, but he won again, emboldening him for an entry to the national stage.
As Steyer's stock rose among democratic pooh-bahs, he befriended former Clinton adviser John Podesta, who invited him to join the board of the Center for American Progress. During hiking and snowshoeing adventures together, Podesta encouraged him to start NextGen Climate Action Committee to take the fight to Washington and beyond. "He thinks about his kids, and he thinks about the future, and that's what got him into this," says Podesta.
All Steyer needed was a convincing message. And in July 2012, he found one in Bill McKibben's essay in Rolling Stone, which described the critical science behind climate change, painting a dark picture of impending doom. McKibben argued for an urgent new movement in which universities, churches, and governments divest from oil companies that foster climate change, with the Keystone XL pipeline as the front in an escalating war against fossil fuels. Set on fire by the story, Steyer called McKibben and asked him to go hiking in the Adirondacks in upstate New York, near McKibben's Vermont home.
"He proved, among other things, to be an astonishingly good hiker," says McKibben. "He's a logical guy, and logic would dictate that we could take action in the face of a serious crisis. I think he comes from a world of business where people do act on things. And if they don't, they go out of business. His sense is that we may well be going out of business."
Soon after, Steyer pledged to pull his personal money from environmentally unsound investments, something his wife says "he's free to do because he's no longer representing a bunch of investors." He's representing himself. (Steyer remains a limited partner at Farallon, but has segregated his own money into a separate fund that is free of ecologically unsound investments.)
Steyer now trained his lasers on the Keystone pipeline. As a former energy investor, he understood the vulnerability of the oil companies. If he could get President Obama to cancel the pipeline, he argued, the higher costs of distributing the Canadian oil using trucks and ships would make the oil sands less profitable and diminish the flood of fuel into the market. (To be sure, others disagree with this analysis, arguing that global demand will find a way to burn the fuel one way or another.)
The idea was to make Keystone an inflection point in the larger struggle to bring climate change into the center of the political conversation in America. "My experience of American politics is that people raise issues and they get addressed in an effective but imperfect way," says Steyer. "But that's sort of the American system: Mind the problem and worry it, and then we attack it with overwhelming power and put it away – and that's the end of that problem."