With the woke investing movement known as Environmental Social and Governance gaining steam in corporate boardrooms and asset management firms across the U.S., red states are pushing back.
The ESG counteroffensive includes economic and legislative moves ranging from the leveraging of public investment to laws mandating that fiduciaries of public funds make investment choices based on financial rather than ideological criteria.
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The Biden administration’s woke Environmental, Social and Corporate Governance (ESG) policies are putting politics ahead of people and hurting retirees savings, a federal lawsuit filed Tuesday alleges.
The complaint, filed by the Wisconsin Institute for Law & Liberty (WILL) on behalf of two Waukesha County residents, seeks a temporary restraining order prohibiting the U.S. Department of Labor from implementing its controversial ESG rule, pending the resolution of the lawsuit. Ultimately, the suit seems a declamatory judgment that the rule violates federal law on administrative powers.
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Twenty-five attorneys general and several other plaintiffs have sued the Biden administration asking the court to halt a federal ESG policy that could negatively impact the retirement savings of 152 million Americans.
The lawsuit was filed in U.S. District Court Northern District Amarillo Division naming Secretary of Labor Martin Walsh and the U.S. Department of Labor as defendants.
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Prestigious business schools across the country are adding more opportunities to study diversity equity and inclusion (DEI) and environmental, social, and governance (ESG), a trend that’s expected to continue, professors told the Daily Caller News Foundation.
ESG prompts investors to consider factors such as environmental impact and social awareness when making investments, while DEI is a push to increase diversity and inclusion initiatives in institutions such as schools and the workplace. Harvard University, the University of Pennsylvania (UPenn), and Bentley University all offer courses in both subjects as they grow more prominent.
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Friday morning on The Tennessee Star Report, host Leahy welcomed former NYU professor and author Michael Rectenwald to the newsmaker line to talk about his new book, The Great Reset.
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CBS’ “60 Minutes” opened 2023 by airing a segment about the dangers of population growth featuring biologist Paul Ehrlich, who has long predicted societal collapse and disaster due to high population.
Ehrlich, a Stanford University professor, said humanity was not sustainable and reiterated his concerns that the planet’s human population was crowding out the natural environment to our own peril. While the world population is still rising, the rate of human fertility plummeted by roughly 50% across the globe in the last 70 years; the average family had five children in 1952, but now has fewer than three.
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The year 2022 brings an end to an era of illusions: a year that saw the end of the post–Cold War era and the return of geopolitics; the first energy crisis of the enforced energy transition to net zero; and the year that brought environmental, social, and governance (ESG) investing down to earth with a thump—for the year to date, BlackRock’s ESG Screened S&P 500 ETF lost 22.2% of its value, and the S&P 500 Energy Sector Index rose 54.0%. The three are linked. By restricting investment in production of oil and gas by Western producers, ESG increases the market power of non-Western producers, thereby enabling Putin’s weaponization of energy supplies. Net zero—the holy grail of ESG—has turned out to be Russia’s most potent ally.
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In the third of his four part review of Terrence Keeley’s Sustainable, Rupert Darwall writes that ESG rests on a vision of the free-market economy that says capitalism needs to be led by people with the right values, which raises the question: Whose values? This makes ESG inherently divisive, explaining the pushback ESG is now generating in red states. Keeley proposes a solution in keeping with the pluralism and diversity of modern America.
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Concern about catastrophic climate change has been the biggest factor driving ESG, yet the likelihood of climate change being catastrophic and the attainment of net zero are not open to debate or challenge by participants in financial markets. In the last of his four part review of Terrence Keeley’s Sustainable, Rupert Darwall argues that this undermines the function of financial markets as efficient, unsentimental allocators of people’s savings in a way that maximizes growth and economic well-being.
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ESG investment strategies can see investors giving up financial returns for no societal gain. In the second of his four part review of Terrence Keeley’s Sustainable, Rupert Darwall explores the implications of investment theory for ESG artificially constraining investment opportunities; the risks of regulators worsening an already inflated ESG bubble; and the distortions that arise from the widespread adoption of sustainability as an investment concept lacking an objective definition.
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ESG has its origins in a speech by UN secretary-general Kofi Annan at the Davos World Economic Forum in 1999. In the first of his four part review of Terrence Keeley’s Sustainable, Rupert Darwall shows how this created ESG’s dual mandate that accounts for its success – and its unsustainability as an investment strategy.
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The U.S. Labor Department announced plans to allow pension fund managers to “consider climate change and other environmental, social and governance factors,” also known as ESG, when choosing investments.
In an announcement about the final rule last week, the agency criticized the Trump administration, stating, “the department concluded that two rules issued in 2020 … unnecessarily restrained plan fiduciaries’ ability to weigh environmental, social and governance factors when choosing investments, even when those factors would benefit plan participants financially.”
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One of the top agenda items for the GOP’s new majority in the House of Representatives is the targeting of “woke” corporations on Wall Street, threatening investigations and other government action if such companies do not reverse anti-American policies and practices.
Politico reports that some of the measures the GOP will be scrutinizing include “ESG (environmental, social, and governance)” policies, divesting from fossil fuels, and race-based affirmative action hiring policies for the sake of “diversity.”
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Arizona Attorney General Mark Brnovich and 18 other attorneys general served six of the largest American banks this past week with civil investigative demands, similar to a subpoena. The demands ask for documents related to the banks’ involvement with the United Nations’ Net-Zero Banking Alliance (NZBA), which requires member banks to set emissions reduction targets in their lending and investment portfolios to reach net zero by 2050.
“American banks should never put political agendas ahead of the secure retirement of their clients,” Brnovich said in a statement. “These financial institutions are entrusted with protecting a different type of green.”
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From Harvard to Hong Kong, stakeholder capitalism is gaining popularity at elite business schools worldwide. Followers of this trendy concept believe that a corporation, instead of primarily operating to benefit shareholders, should work to benefit all interested parties — or “stakeholders” — including suppliers, local communities, and governments. Stakeholder capitalism largely overlaps with efforts to advance so-called “environmental, social, and governance” (ESG) outcomes — a vaguely defined trio of left-wing priorities.
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The Environmental, Social, and Governance (ESG) scoring system is undergoing intense scrutiny. It also has become quite a political football, with conservative governors, attorneys general, and other officials pushing back against the movement while progressive politicians argue that ESG needs to go further.
This political tug-of-war has exposed the evil essence of ESG: It is an attempt by progressives to arm-twist the leaders of investment firms controlling the allocation of over $20 trillion in investment capital away from firms disfavored by progressives, including, most notably, producers of fossil fuels.
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The asset management company BlackRock, which has been widely criticized for promoting multiple far-left concepts in the world of business, has seen its stock downgraded due to ongoing backlash.
According to The Daily Wire, UBS analyst Brennan Hawken downgraded the company last week due to its support for Environmental, Social, and Corporate Governance (ESG) policies. The target stock price was reduced from $700 to just $585, resulting in a one percent drop in BlackRock shares on Tuesday.
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Republican state treasurers are withdrawing $1 billion in assets from BlackRock’s control due to the asset manager’s alleged boycott of the fossil fuel industry, according to the Financial Times.
Republican South Carolina State Treasurer Curtis Loftus is pulling $200 million from BlackRock by the end of 2022, and Louisiana treasurer John Schroder said on Oct. 5 that he is divesting $794 million from the company, according to the FT. Utah treasurer Marlo Oaks said he removed $100 million in funds from BlackRock’s control, and Arkansas treasurer Dennis Milligan pulled $125 million from the company in March.
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As the leader of a nonprofit group whose mission is to promote economic freedom, sound public policy, and responsible financial management at the state level, I’m honored to help our nation’s financial officers practice good stewardship of taxpayer dollars. Their work often includes managing pension funds that are vital to millions of Americans’ retirement security. Over the past few years, a growing threat called ESG (Environmental, Social, Governance) has been negatively impacting state pension systems, ultimately putting retirees at risk. Sadly, our nation’s state financial officers and the retirees they have a fiduciary responsibility to protect are increasingly under siege by ESG ideologues who are motivated by politics rather than economics.
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In a House Financial Services committee hearing last week, Rep. Rashida Tlaib asked CEOs of major banks whether they would go along with her ESG agenda and commit to stop funding fossil fuels.
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After last week’s news that American Express, Mastercard and Visa, plan to keep lists of those who purchase weapons using their credit card services, Tennessee’s Attorney General is leading a coalition of 24 of his peers from various states in opposition of that plan.
“Giant financial companies must not use their combined market power to circumvent our
representative democracy,” said Tennessee Attorney General Jonathan Skrmetti. “As Attorney
General, I protect the people of Tennessee from corporate collusion that threatens to undermine their constitutional rights. Working together with my colleagues from other states, we will marshal the full scope of our lawful authority to stop this abuse.”
The mutual fund industry has gone “woke.” It’s not just the asset managers who screen socially “unacceptable” companies in industries involving, say, guns, fossil fuels, tobacco, or gambling. Those have been around for decades.
No, there’s something else amiss. And if you’re investing your hard-earned money, you might be part of the problem.
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Monday morning on The Tennessee Star Report, host Leahy welcomed Tennessee AG Jonathan Skrmetti in studio to comment upon ESG’s backdoor policy push and the origins and purpose of the National Association of Attorneys General.
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The international organization responsible for creating merchant category codes for credit card purchases has given its approval to establish one for transactions made at gun stores.
The International Organization for Standardization’s Registration and Maintenance Management Group met on Wednesday to discuss a request made by Amalgamated Bank to set up such a code.
An ISO spokesperson told The Center Square that RMMG members could not decide whether to approve the application. That elevated the discussion to the ISO leadership that oversees standards for retail financial services.
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Reports about ESG — “environmental, social, and governance” scores that progressive activists, money-management firms, and government agencies (namely, the Securities and Exchange Commission) assign to corporations — have become nearly ubiquitous in the news. There is even a website, esgnews.com, that keeps track of the latest ESG-related developments.
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Pro-market elected officials and thought leaders are fighting back against progressive activists’ creeping capture of corporate America through the Environmental Social and Governance movement..
ESG investment strategies, increasingly prevalent among large asset management firms, seek to leverage passive investors’ assets to steer corporate decision-making to promote progressive social and environmental priorities. ESG has often been compared to the “social credit” system used by China’s ruling communist elite to enforce political conformity on its population.
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Gov. Ron DeSantis and the trustees of the State Board of Administration, CFO Jimmy Patronis and Attorney General Ashley Moody passed a resolution Tuesday updating the state’s investment and proxy voting policies for its retirement system and pension plan. The resolution prohibits state fund managers from investing state money in funds that comply with the ideological agenda of environmental, social and corporate governance (ESG). The resolution also calls for an internal review of the state’s governance policies over the voting practices of the Florida Retirement System Defined Benefit Pension Plan.
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Arizona State Treasurer Kimberly Yee (R) recently shared that she notified Morningstar Inc. that they have 30 days to prove they are not actively boycotting Israel and breaking Arizona law.
“As Treasurer, it is my duty to ensure that Arizona does not do business with companies that are attempting to undermine Israel’s economy and violate Arizona’s anti-BDS law,” Yee said. “I will not allow companies to promote policies that are antisemitic and discriminatory efforts against Israel, which is America’s longtime friend and ally, and a significant trade partner with Arizona.”
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A U.S. Congressman from Tennessee testified in front of the House Rules Committee, where he spoke against proposed government regulations regarding Environmental, Social and Governance (ESG) standards that he says will negatively impact farmers.
“I’d like to support by urging support for my bipartisan amendment, number 631, cosponsored by the gentlelady from Michigan, Representative Alyssa Slotkin, to prohibit the Securities and Exchange Commission from enforcing any provision on its rule making on enhanced standardization of climate-related disclosures for investors that would directly or indirectly require farmers to submit climate-related information to public companies or the SEC,” said Rep. John Rose (R-TN-06).
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The Supreme Court’s decision in Dobbs v. Jackson Women’s Health Organization was a long-awaited victory for life. While Dobbs did not make abortion illegal, it did empower the residents of all 50 states to democratically determine abortion’s legal status through their elected representatives. Currently, 22 states provide or will soon provide protection for unborn children. The other 28 states place few or no limits on abortion. The abortion battle will now move to the ballot box in each state.
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At the inaugural UPS Impact Summit, the shipping company announced they will invest $8.75 million in Atlanta companies in a pledge to advance “ESG [environmental, social and justice agenda], diversity, equity and economic empowerment.”
“UPS is a purpose-driven company. We move goods while also doing good — this is who we are in our hometown and in every community we serve,” UPS Chief Executive Officer Carol B. Tomé said. “I’m proud of our Foundation’s approach to driving social impact here in Atlanta and around the world.”
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Maury County Mayor Andy Ogles, a Republican candidate in the August 4 primary for Tennessee’s 5th Congressional District, announced Tuesday that he is joining U.S. Representative John Rose (R-TN-6) in criticizing proposed Securities and Exchange Commission (SEC) regulations that impose requirements on public companies regarding their non-financial activities.
“The proposed enhanced reporting requirements that will pressure public companies to pursue liberal political objectives regarding their environmental, social impact, and governance (ESG) policies rather than sound profit and business objectives is quite simply an assault on capitalistic and free-market principles,” Ogles said.
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Tennessee U.S. Senator Bill Hagerty touted his participation on Saturday in a letter signed by more than 30 senators to Securities and Exchange Commission Chairman Gary Gensler pushing back against a proposed Environmental, Social, and Governance (ESG) regulation that would harm America’s farmers.
The proposed rule is entitled, “Enhanced and Standardization of Climate-Related Disclosures for Investors.”
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Blackrock has gone from being known as the largest asset manager in the world to being known as the investment company that pushes a social agenda on the companies it invests in. From cajoling corporate America into signing the manifesto of stakeholder capitalism, the Business Roundtable Statement on Corporate Responsibility, to putting anti-oil board members on the board of oil companies, Blackrock has developed a reputation, at least among conservatives, as a company that is imposing CEO Larry Fink’s social agenda on American capitalism.
In fact, the reputational issue is so prevalent that Fink spent much of the recent annual report rebutting it, arguing that what he is practicing is simply capitalism and that the imposition of climate change minimization measures and other ESG issues relevant to stakeholders is simply capitalism. The standard arguments here are that practicing ESG is not politics but rather risk management. Typically ESG proposals talk about reputational risk or the risk that at some point in the future governments will embrace the values expressed in ESG circles and impose them involuntarily on businesses. In such cases, for example, fossil fuel companies will be stuck with “stranded assets”, i.e. oil and gas wells rendered worthless by the coming age of enlightened energy regulation.
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Sixteen Republican governors, with Tennessee Governor Bill Lee not among them, sent the Biden administration and the SEC a letter on Tuesday telling them to back off a proposed “climate change” disclosure regulation.
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From Congress to the statehouse, Republicans are fighting a growing movement to force investments into funds that make decisions based on environmental, social, governance, or political criteria.
The Environmental Social Governance (ESG) movement has prompted the Securities and Exchange Commission to propose a rule requiring companies to report emissions and other climate risk data, while public pension funds like the Thrift Savings Plan are discussing using ESG metrics to govern investment decisions.
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U.S. Representative John Rose (R-TN-06) led a bi-partisan letter to Securities and Exchange Commission Chair (SEC) Gary Gensler defending America’s farmers against a proposed new Environmental, Social, and Governance (ESG) regulation.
In March, the SEC proposed a new ESG rule that would require public companies to include “climate-related” disclosures in their registration statements and periodic reports.
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A group of shareholders in America’s largest bank has banded together to fight against the company’s “woke” policies.
Members of a group called The Boardroom Initiative issued a shareholder proposal that rebuked some of Bank of America’s “wokeness,” and though the proposal was shot down, members of the group remained upbeat.
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States across the country are preemptively banning Environmental, Social and Governance (ESG) scoring, which some say would lead to a massive consolidation of wealth among the most powerful investment companies in America.
“In an attempt to secure vast amounts of wealth and influence over society, corporations, bankers, and investors, working closely with key government officials, have launched a unified effort to impose environmental, social, and governance (ESG) standards on most of the industrialized global economy. (ESG standards are also referred to as ‘sustainable investment’ or ‘stakeholder capitalism.’),” Justin Haskins at The Heartland Institute said.
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Blackrock CEO Larry Fink warned Environmental, Social and Governance (ESG) investors in his $10 trillion hedge fund’s annual shareholder letter that Russia’s invasion of Ukraine — and the resulting Western sanctions on Russia — had disrupted globalization and interdependent supply chains and would result in “increasing oil and gas supply” in the U.S. and “coal consumption may increase over the next year” in Europe and Asia to offset the drop in Russian exports.
As a result, Fink projected, “This will inevitably slow the world’s progress toward net zero in the near term,” referring to ESG goals like net zero global carbon emissions by 2050 that would encounter challenges, particularly as American consumers pay much higher prices with consumer inflation up 7.9 percent and producer inflation up 10 percent the past twelve months.
Those price pressures will mean more oil and gas production immediately, Fink said.
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Friday morning on the Tennessee Star Report, host Michael Patrick Leahy welcomed CEO of 2nd Vote Advisers Dan Grant in studio to discuss the newly proposed Sensible Taxation and Equity Promotion Act and how it will harm small businesses.
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Wednesday morning on the Tennessee Star Report, host Michael Patrick Leahy welcomed all-star panelist Crom Carmichael in studio to discuss the alliance of the administrative state under a Biden administration and how ESG equals CCP.
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Before Joe Biden’s election, environmental, social and governance (ESG) investing was sweeping all before it. Wall Street was coming to the planet’s rescue and saving capitalism at the same time. It was a self-serving myth. As I show in my new report Capitalism, Socialism and ESG published today, doing well by doing good is no more than Wall Street sales patter. But since the election, financial regulators have been falling over themselves playing catchup.
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