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ESG Investing Threatens the American Dream

Posted on Thursday, May 2, 2024
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by AMAC Newsline
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AMAC EXCLUSIVE

ESG chart

Corporate America must decide: Will it allow progressive activists to drive Environmental, Social, Governance (ESG) agendas that diminish profits and further divide Americans, or will it return its focus to producing high quality goods and services that help and serve all people?

Corporations that yield to political agendas harm shareholders, customers, vendors, employees, and small businesses. Proceeding down this path will ruin our business community and free-market spirit. There are, however, signs that the tide is turning.

As the Attorney General of Kentucky, I saw the potential dangers ESG posed to our citizens. Asset managers virtue signal on climate and social policies using their customers’ money. That has meant refusing to invest in industries they find personally objectionable—coal, oil, natural gas—at the expense of the return on investment to teachers, firefighters, police officers, and other public servants.

So, I launched an investigation into the ESG-related investment practices of Vanguard and State Street Bank. Within a month, Vanguard pulled out of the Net-Zero Asset Managers Initiative. I also published a Kentucky-specific opinion on fiduciary duty and ESG in pension funds, clarifying that these public funds cannot be used to pursue ESG goals in Kentucky.

Common sense tells most people that taxpayers and shareholders deserve better than to have their hard-earned savings leveraged for political purposes.

Thankfully, conservative leaders have taken other meaningful steps to address this concern. For example, when BlackRock supported an effort to have companies divest from oil and gas, 15 states responded by passing legislation in 2023 that either prevents firms from doing business with the state if that firm boycotts the state’s key industries or prevents the use of state funds for ESG investing purposes.

In April, West Virginia added Citigroup Inc.; TD Bank, N.A.; The Northern Trust Company; and HSBC Holdings, PLC to the state’s Restricted Financial Institution List after determining that the institutions are engaged in boycotts of fossil fuel companies as defined under state law. Just two weeks before, Texas divested $8.5 billion from BlackRock after the Texas State Board of Education Chairman concluded the firm was hurting key oil and gas interests.

Florida also took measures to completely block the ideological ESG agenda from being used when it comes to their state pension funds. Lawmakers there reclaimed the State Board of Administration’s proxy voting rights from large asset managers, arguing investment decisions should be based on giving Florida retirees the “highest return” possible.

Continued awareness efforts are underway to stop asset managers from secretly voting against a state’s economic interests with shareholder dollars through proxy votes at annual shareholder meetings. At the 1792 Exchange, we publish an annual report that lists the proxy votes of all 50 states and their asset managers. This database, along with scrutiny from state officials, saw support for ESG proposals decline nearly 20 percent year-over-year. Additionally, one of the two largest proxy advisory firms, ISS, approved a new “ESG-Skeptical” voting alternative created by Bowyer Research.

Not only do big asset managers push political agendas under the banner of ESG, many banks, insurance companies, and other businesses refuse to do business with certain customers based on strident adherence to ESG criteria. Cancelling supply chains, customers, and small businesses for not adhering to a radical left-wing agenda is a major problem that we’ve highlighted in our Corporate Bias Ratings. Concerned shareholders continue to present our ratings to management at annual shareholder meetings as they push for companies to treat all people fairly.

Great strides have been made to roll back the ESG political agenda harming Americans’ wallets, but the work is far from over. ESG advocates have changed their strategy, with some rebranding their messaging to “conscious capitalism” or “transition investing” to mask their agenda-driven tactics.

As ESG moves into the shadows, we are also carefully monitoring climate legislation coming out of Europe that could affect 3,500 American companies as well as efforts at the state and federal level that would force companies to pour time and money into achieving ideological goals rather than providing products and services to customers and maximizing returns for shareholders.

ESG and stakeholder capitalism, no matter what name it goes by, is a threat to the American Dream. At the 1792 Exchange, we combat that threat, no matter its form, every single day for the hard-working American people.

Daniel Cameron served as the 51st Attorney General of the Commonwealth of Kentucky. He currently serves as the CEO of the 1792 Exchange.

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PaulE
PaulE
22 days ago

While many financial management firms and some public corporations have dropped the ESG designation after severe blowback from both investors and the general public, the reality is that ALL of the values associated with the ESG movement continue to be pushed actively by most of the firms who championed it. That much is crystal clear from listening to numerous quarterly earnings announcements from the senior management of a lot of the companies involved, as well as reading their published 10Q and 10K reports.

Senior management at these firms have just stopped referring to ESG as ESG in both verbal and written documentation to the public. Now they just talk about the same agenda in more vague and nuanced terms in any sort of public statements. All to try and avoid further pushback. The last thing most of the people pushing this nonsense want is a lot of public attention highlighting the negative economic and long-term effects that ESG has on shareholder values and overall business viability.

However, rest assured that the CEOs of firms like BlackRock, Fidelity, State Street, Exxon, Chevron and many others remain as committed as ever to pushing this nonsense that negatively impacts company earnings, profits and growth. All things crucial to a business’s long-term success and viability. So, it is essential the public NOT be lulled into thinking the left has backed down and given up on this agenda. They haven’t. They have just changed the language they use to describe the exact same agenda they seek to try and impose on the overall economy over the long run.

Leslie
Leslie
22 days ago

My mother’s retirement is through CalPers. I take care of her legal and financial matters, but she was pretty shocked when I informed her recently that the “board” was investing her retirement money in ESG. And she and my father endowed two scholarships at the university where they worked, both lost well over 20% in 2022..not simply due to market fluctuations but some due to their investment portfolios being stacked with ESG and other DEI sticks. It took me 3 months to get the financial manager to actually give me the names of the stocks in the portfolio. We stopped funding the scholarships at that point. Students losing out!

David Millikan
David Millikan
22 days ago

This article is an excellent reason why to Vote for President Trump.
This garbage would never happen.

GT Patriot
GT Patriot
22 days ago

I will buy no stock in any company that professes to have an ESG or DEI or Trans
program

Susan
Susan
22 days ago

I spent my professional career working for an International Investment Firm. I first learned of ESG in 2010 and began teaching my clients why they didn’t want to participate. The bigger East/West Coast State Pension Funds were those behind the push. ESG was presented at many of the Conferences by CERES.Org who was partnered with CalPERS. When President Trump exited the US from the Paris Agreement, Ceres and CalPers created We Are Still In – “We Are Still In is a coalition of local leaders who support the Paris Climate Agreement despite the U.S. withdrawal. They represent over half of the U.S. population, economy, and emissions, and aim to accelerate climate action in 2021 and beyond.” U.S. Exits Paris, We Are Still In
The State of Texas banned the process from all their government funds in 2015 thru SB445. https://www.legis.state.tx.us/tlodocs/84R/billtext/html/SB00445I.htm. Interesting it included iclei.org in that ban. The way to stop it at the fund level is to implement a ban in the State Funds Investment Policies. Otherwise the investment firms don’t have to adhere to changing their strategies. Another way is to ban any investment firm that is a signer of the UNPRI.org – Principles for Responsible Investment. Check that out along with ShowMe 070706 HorizTable (unepfi.org) and read their re-defined Fiduciary Responsibility.

roger z smith
roger z smith
21 days ago

invest in israel

mark mayors
mark mayors
22 days ago

what a bunch of idiots

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