AMAC Exclusive – By Shane Harris
Last week, the mammoth investment bank Vanguard – which manages some $7 trillion in assets – shocked the finance world by announcing that it would be pulling out of an industry-wide initiative ostensibly aimed at combatting climate change known as Net Zero Asset Managers (NZAM). The move was the latest major blow to proponents of “environmental, social, and governance” (ESG) investing, and another indicator that the left’s grip on the world of corporate finance and big banking may be beginning to slip.
Prior to Vanguard withdrawing from NZAM, the initiative, which was just launched in late 2020, boasted 291 signatories representing $66 trillion in assets. Signatories commit to “supporting the goal of net zero greenhouse gas emissions by 2050 or sooner.” In practice, this means divesting from fossil fuels companies and only investing in corporations that embrace the far left’s climate agenda.
As recently as May, Vanguard was touting its commitment to NZAM’s goals, pledging that $290 billion of its assets would be “net-zero” by 2050. But in a statement last week, the firm said that it was withdrawing from the initiative to “make clear that Vanguard speaks independently on matters of importance to our investors,” and “provide the clarity our investors desire about the role of index funds and about how we think about material risks.”
On the same day that Vanguard announced it was withdrawing from NZAM, news also dropped that the Texas state legislature has subpoenaed BlackRock, another investment giant, over the institution’s ESG policies. Texas state Senator Bryan Hughes filed the subpoena and said he is seeking in-person testimony from BlackRock CEO Larry Fink, who has garnered a reputation as one of the leading proponents of ESG investing and woke corporate policies. “We will not allow these firms to continue to use Texans’ money to force a narrow political agenda,” Hughes said in a statement.
Elected officials in other states have also sought to hold woke investment banks accountable for what they argue is a violation of shareholders’ fiduciary interests. Many states have billions of dollars invested with institutions like BlackRock and Vanguard through public employee pension plans as well as general state funds.
West Virginia State Treasurer Riley Moore was one of the first to take action in January of this year when he dumped BlackRock over the firm’s ESG policies, withdrawing some $20 million in state funds. Then, in July, Moore announced that the state would no longer do business with five major financial institutions, including Goldman Sachs and JP Morgan, due to those institutions’ hardline stance against West Virginia’s all-important coal industry.
Moore’s actions helped touch off a series of similar moves from Republican officials in other states. A legal opinion from Kentucky Attorney General Daniel Cameron in May of this year decried ESG investing as a way for bank executives to “push their own political agendas and force social change.”
A few months later, a group of 19 GOP state attorneys general penned a letter to Fink accusing BlackRock of using “the hard-earned money of our states’ citizens to circumvent the best possible return on investment.” The letter specifically outlines several ways in which BlackRock’s ESG policies may be in violation of numerous state laws on maximizing financial return to investors, while also raising antitrust concerns.
Then, in early December, Florida delivered one of the biggest blows to ESG investing when the state removed $2 billion worth of assets managed by BlackRock. Florida CFO Jimmy Patronis said in a statement at the time that “I need partners within the financial services industry who are as committed to the bottom line as we are – and I don’t trust BlackRock’s ability to deliver.” The move was made possible by a resolution pushed through in August by Governor Ron DeSantis which officially eliminated ESG considerations from state pension investments.
Investment banks that have embraced ESG have also faced pressure from congressional Republicans to back down from their social engineering schemes.
Just days before Vanguard announced it was withdrawing from NZAM, Congressman Jim Jordan of Ohio, the ranking member on the House Judiciary Committee, announced an investigation into whether or not investment banks acting collectively in the name of ESG are violating antitrust laws.
In November, a group of five Senate Republicans also sent letters to dozens of prominent law firms employed by investment banks notifying them that they have “a duty to fully inform clients of the risks they incur by participating in climate cartels and other ill-advised ESG schemes,” again hinting at potential antitrust violations. With a new GOP House majority set to take power next month, ESG investing could be a top target for congressional investigations, and may lead to outside lawsuits on antitrust grounds.
It seems clear that all of these pressures played at least some role in Vanguard backing down from its embrace of ESG last week. Though there is still a long way to go toward breaking the stranglehold that the left has on banking and the corporate world in general, conservatives – and everyone who doesn’t want left-wing activists to decide how their money is invested – can take heart in that they finally seem to have some momentum.
Shane Harris is a writer and political consultant from Southwest Ohio. You can follow him on Twitter @Shane_Harris_.
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To Shane Harris, Your coverage of the environmental, social, governance investment strategies is appreciated. Praise goes to Congressman Jim Jordan , Florida CFO Jim Patronis, and Texas state senator Bryan Hughes for their actions in dealing with these ESG schemes and the proponents of these schemes, the Left – wing activist element. The standards for banking, and corporations should involve Honor, Honesty, Integrity and when called for Courage and Loyalty. You finished your article on a positive note, and I would say the more coverage this matter has the better things will be concerning investments and investment law.
Contact your local and state reps to find out if the state investments go thru any of these freak shows masquerading as financial institutions. If so, demand a change to non-woke financial institutions. No reason for our tax dollars to be wasted supporting these losing investment strategies.
Can’t wait for the low carbon people to find out how to control solar flares and other things that control our climate like the water pushed into the stratosphere by the Tonga volcano. An IQ of 180 is great, but it isn’t infinite like the Good Lord’s. Also the fact that He does things simply by wanting them done. Keep looking up, and if you haven’t asked Christ to save you, it’s not too late as long as you’re still here. He loves everyone, but only saves the ones who want Him.
Thank you Gin Your point is always correct
Me either, but I can guess what their plan is: more taxes and climate summits.
Great! But who is handling all that non-ESG business now?
The democrats and King Larry Fink. Oh, I forgot; John (private jet) Kerry.
SEC needs to any disband any board which considers any criteria other than legally maximizing profit for shareholders who place their money thus confidence in them. If Exxon states ” We are not about alternative sources. We are about drill, drill, drill ” I applaud them and will invest in them.
If Exxon thinks the average investor believes the concept that they (Exxon) is serious about alternative sources, those investors are idiots.
Who knew these CEO’s were such cowards. I guess LARRY the FINK will be king weiny. Blackrock under head weiny wants to take customer monies to support his pet climate change. He should use his own money. His name tells it all!
WOKE is COMMUNISM.
WOKE IS FOR LOSERS AND THE STUPID.
Vanguard was SMART for not going
LOSER WOKE and other businesses would be WISE to follow Vanguard.
I agree with the Kentucky Attorney General. These firms are just bending the knee to the woke agenda. Hey GOP, we have to get to the point where the rule of law actually means something again. I really like Ron DeSantis and what he’s doing in Florida to eliminate ESG. He’s like Trump without the ego. And good for Jim Jordan of Ohio regarding his investigation of ESGs violations of anti trust laws.
Jim Jordan sold out to RINO McCarthy! I lost all respect for him! I am sick and tired of the do nothing demicans and republicrats!
That is so they won’t be sued for being crappy fiduciaries by clients/investors.
These woke groups have their agendas and they do not take you into consideration.. Their goal is to remake the world like they think it should be regardless of casulties. They want to bypass the constitution, local laws, community standards, and common sense. Your job, your standard of living, your beliefs, are of no concern to them. These woke groups are pushing ideas that will have detrimental effects on our families, many are not reversible once they are in place.
So happy to see Vanguard step up to fight this insanity! My funds there were in jeopardy due to this wokism! When I am investing my hard earned money, I don’t want it to be controlled by any woke group.
It is ridiculous for companies to be pushed around by any one group!
My retirement is in Vanguard funds, so ditto!
I read about this a couple days ago and I’m glad Vanguard did this cuz my 401K with my company is invested with a lot of Vanguard funds. I don’t want any of my hard earned retirement account to go to any of this ESG crap! I need my investments to make as much as they can so I can stay free when I finally retire!
Get woke, go broke. This green and ESG stuff is nothing more than a scam by the WEF, Davos crowd, and the so-called elites….. with backing from young and dumb kool-aid drinking goofballs with signs.
Oh, you are so correct!
My employer started with a new payroll company this week, Paylocity. In an email from HR which detailed some of the new features, one is “the ability to connect with coworkers and send peer recognitions”. This came across as a big red flag to me. We have to download their app with location services. I have tried finding out more about the company, It does have an “ESG” logo. This peer recognition thing sounds a bit like a social credit system in the making
Wouldn’t it be nice if some conservative or libertarian billionaire started a bank or stock company which dealt with the real issues and not a lot of woke garbage!
Try these (stock symbols): DRLL and STRV. I own both but have no affiliation with either. I also don’t have a ton of money invested, but I’m giving them a try since they are against “Woke” in all it’s forms.
Best decision by all of these states. Only concern should be profits
This whole WOKE and Green Energy is a joke!!
Wind Generators will never be a viable green source of energy. This is one of the biggest White Elephants ever promoted by our government. Solar and Wind might be ok for very remote areas where utility power is not feasible, and this is only for very small small applications.
Green energy is nothing but the NWO scheme.
We have to get the U.S. down to the level of other third world countries! No engineers have been employed in their fake news! The woke want to define the science, jujst like the CDC and Fauci!
How is it that all these braines of finance can be so stupid about things that dontnwork. Right now ,going green.
Yippee !!!!!!!!!!!!! Someone is watching… at what might be the light at the end of the tunnel !
And it could be a deep pit with a slippery slide to a hard crash at the bottom and sooner than we think :) Point being.. Ever heard of FTX….??? HUMMMMM? How about ENRON….?? HUMMMM? or
Madoff …. HUMMMM ??? when will these greedy MOFOS learn that you can fool some of the people some of the time but you can’t fool all of us forever as you get richer illegally.
Hooray for these astute state leaders as they turn back the tide on this WOKE GARBAGE. It is on its way to the trash heap and not soon enough. What has been so wrong with staying the course and doing the right thing time and again. That is what the investment world has been preaching for 100 years. Stay on course, invest wisely, learn the basics, get real quality advice and enjoy the true honest fruits of your labors. Millions of hard working Americans with conservative ideas and beliefs have accomplished that for more than 100 years. Turning many into wealthy tycoons who have laid the path for where we are now. It is often so hard to see the reality behind the curtain why so many Billions of people want to invest in America. ” The Midas Touch ” if you build it they will come.” It happens everyday somewhere in America. HONESTLY!!! I believe we are seeing the edge of the Event Horizon, the left is beginning to slip on the grip it has had for a few years. The last 2 have been and are the worst I have lived with in my lifetime. It sems now as I look back for 65 years that each time the left gains a foothold they stumble tragically and terrible things happen to the country. I can name almost every left leaning administration that has been in power for at least 4 years and the horrible effects they have had on our lives. It has often boiled down to one thing one terrible word ” GREED”, before during and after.
What you said is true but does it seem like each generation takes longer to catch on to the lies?
Because to many of the younger generation have never had to work hard for what they want they have had it handed to them. They don’t know what it’s like to do without. When children have to earn what they want it teaches them a lot about life
BlackRock started it.