Derek Kreifels
From Louisiana to West Virginia, state financial officers are taking action to protect their citizens from Environmental, Social, and Governance, or ESG. Subjective by nature and intentionally ambiguous, ESG is an investment scheme aimed at using investment portfolios to push a partisan political agenda without any regard for the values of pension holders and shareholders.
Unelected activists have been using ESG as a vehicle to force their personally preferred progressive policies on everyday Americans. The result has been higher prices on everything from gasoline and groceries, and at the same time, lower returns for hardworking Americans’ pension funds and retirements. This in spite of the fact that prioritizing investments based on ideological goals above maximizing investment returns violates laws in many states related to fiduciary duty.
Larry Fink, founder and CEO of BlackRock Inc, the world’s largest asset management corporation, has been the key lynchpin in forcing funds and companies to comply with ESG mandates. In fact, he has been rather candid, stating that BlackRock was “forcing behaviors” through its ESG investment strategy.
While it’s not new, the American people are finally learning the truth about ESG and how it’s bad for America and their hard-earned investments. And now, for the first time, there is a unified pushback against the strategy. State treasurers and financial officers are leading this effort and taking decisive action.
Just this week we saw Missouri Treasurer Scott Fitzpatrick announce his state had pulled approximately $500 million in pension funds from BlackRock. That follows Louisiana Treasurer John Schroder and South Carolina Treasurer Curtis Loftis, who in the last two weeks have announced divestments of $800 million and $200 million, respectively, from the asset management firm.
In January, West Virginia Treasurer Riley Moore declared that he has “a duty to ensure that taxpayer dollars are managed in a responsible, financially sound fashion which reflects the best interests of our state and country, and I believe doing business with BlackRock runs contrary to that duty.”
To date, Missouri, South Carolina, Louisiana, Utah, Arkansas and West Virginia have all moved to protect their state funds from BlackRock, with total divestments since January 2022 now exceeding $3 billion.
One of ESG’s primary objectives is to deny the financial capital that oil and gas companies need to produce the energy Americans use to heat their homes and power their vehicles. Last November, Treasurer Moore led 15 state financial officers in sending a letter to American financial institutions putting them on notice that they may take their states’ $600 billion in collective assets if the banks continued to ban financing to energy producers.
This past August, Texas Comptroller Glenn Hegar listed BlackRock among financial companies that boycott energy companies, subjecting it to divestment provisions outlined in the state’s code.
Hegar said that his research “uncovered a systemic lack of transparency that should concern every American regardless of political persuasion, especially the use of doublespeak by some financial institutions as they engage in anti-oil and gas rhetoric publicly yet present a much different story behind closed doors.”
Indeed, BlackRock was still trying to have it both ways in a September letter to state attorneys general, in which the company said it was “disturbed” over “political initiatives,” as it termed the pushback against BlackRock’s ESG efforts. “One of BlackRock’s most critical tasks as a fiduciary investor for our clients is to identify short- and long-term trends in the global economy that may affect our clients’ investments. We do this across all sectors – from healthcare to technology to energy.”
While BlackRock has been exposed and has been given a financial black eye, the fight is clearly far from over. Fink and other self-anointed activist corporate officials are still forcing ESG in one form or another onto other companies. Retirees’ pensions are still at risk from lower-yielding investment decisions that are based on political considerations in which they’ve had no input.
State financial officers who take their duty of protecting financial assets from political chicanery seriously will not shrink from the fight. More financial officials are expected to step up in the days and weeks to come. Companies pushing ESG have finally been put on notice.
Derek Kreifels is the CEO of the State Financial Officers Foundation.
The views and opinions expressed in this commentary are those of the author and do not reflect the official position of the Daily Caller News Foundation.
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