This past week I had a long conversation with a group of random gentlemen at the local diner. All five of us were belly up to the counter drinking coffee, eating omelets and talking turkey. Well, not so much turkey as Environmental Social Governance (ESG) and how it is impacting their retirement accounts. That’s right class, today we talk about how your retirement accounts are now planting the political seeds of marketplace manipulation.
It didn’t not take long for the words “Vanguard” and “BlackRock” to come up with retirement accounts being discussed and I recalled a story headline this past week about BlackRock and a retirement account. Here is the article referenced.
Dissecting this data, it would appear that state pension fund managers who have announced publicly that they will include ESG goals in their investment decisions collectively control more than $3 trillion in retirement assets and include the five largest public pension plans in the U.S. Among them are The California Public Employees Retirement System (CalPERS), California State Teachers Retirement System (CalSTRS), the Teachers Retirement System of Texas, New York City pension funds, New York State Common Retirement Fund, Maryland State Retirement and Pension System, and the New York State Teachers Retirement System.
This is an incredible strategy that everyone in oil and gas should pay attention too. If you do not want to believe me that you should pay attention to this, ask Darren Woods the CEO of ExxonMobil. In June 2021, CalSTRS, CalPERS, and NY State Common Retirement Fund joined three of the world’s largest asset managers, BlackRock, Vanguard, and State Street, voting to elect clean-energy advocates to the board of Exxon and divert its investments away from oil and gas and toward alternative fuels.
According to NetZeroAssetManager, many state pension funds outsource asset management to firms like BlackRock and Vanguard, are among 236 asset managers who signed on to the Net Zero Asset Management Initiative. These signatories, which collectively control $57 trillion in assets, promise to achieve “emissions reductions” and to cast shareholder votes that are “consistent with our ambition for all assets under management to achieve net zero emissions by 2050 or sooner.”
Meanwhile in Texas, their state has successfully divested themselves from ESG with the help of Jason Isaac Director of Life:Powered, a national initiative of the Texas Public Policy Foundation to raise America’s energy IQ. The Crude Life interviewed Isaac shortly after Texas became the first state to break through on the ESG Narrative allowing fossil fuels to have a seat at the table.
“We were the first state to actually get it passed and we are currently working and helping educate policy makers in other states around the country,” Isaac said. “It’s great because the leftist environmentalist climate cult media is starting to write about this and their alarm sensors are up because we got this done in Texas.”
Isaac continues explaining the difference between Texas and states who tried but failed in passing similar legislation. He also explained how municipalities and the state are tied to companies like BlackRock and Bank of the West.
“We found out it’s sitting in some with Bank of the West and in 2018 Bank of the West came out and said they were going to start divesting and not making funds available companies that are investing in fossil fuels,” Isaac said. “(Wyoming) Governor Mark Gordon who was then the Treasurer of Wyoming said we are going to pull all our funds out of Bank of the West accounts. And now Mark’s the Governor of Wyoming and they are continuing that.”
This past December, the state of Florida revoked all proxy voting authority given to outside fund managers. According to Gov. Ron DeSantis, this action was taken to “combat woke corporate ideology” and to “clarify the state’s expectation that all fund managers should act solely in the financial interest of the state’s funds.”
Jonathan Berry, a former regulatory head at the Department of Labor and is also a partner at Boyden Gray sees how the ESG trend is a little more on the political side and can become a slippery slope ripe for another way to abuse power for appointed and elected leaders.
“States are recognizing that the financial system is being weaponized against industries that are the life blood of a lot of heartland states,” said Berry. “Pension plan proxy votes are often being used against both the economic and political interests of a lot of government workers.”
Derek Kreifels, CEO of the State Financial Officers Foundation, said corporate executives often talk to him in confidence that “they hear from folks on the left on a daily basis. Up until the fall of last year, they rarely heard from those of us who were right of center.”
He added in the interview that most people do not comprehend how a retirement account can promote a progressive agenda, “but once you do, frankly people are pretty outraged by it.”
As the ESG industry grows, corporate activism has proliferated. According to the U.S. SIF Foundation, which tracks “sustainable” investing, 149 institutional investors and 56 investment managers filed shareholder resolutions on ESG issues between 2018 and 2020.
The largest and, some believe, most activist asset manager is BlackRock, with approximately $10 trillion in assets under management. “Every company and every industry will be transformed by the transition to a net zero world,” BlackRock chief executive Larry Fink wrote in his 2022 letter to CEOs. At a public forum in March, he stated that “behaviors are going to have to change, and this is one thing we’re asking companies. You have to force behaviors and at BlackRock we are forcing behaviors.”
Even JPMorgan Chase CEO Jamie Dimon joined the 180 other CEOs to announce that stakeholder capitalism had replaced shareholder returns as the “modern standard for corporate responsibility.”
Will short term gain equal long term pain?
Time will tell because Wall Street has profited from this ESG trend of platitudes and altruism. According to Bloomberg Intelligence’s ESG Outlook report for 2021, ESG assets exceeded $35 trillion in 2020 and are on track to reach $50 trillion by 2025, more than a third of the $140 trillion global assets under management.
And Wall Street’s soldiers in the field have a special interest in promoting ESG funds, because ESG funds are actively managed. When a fund is “actively managed” they carry higher fees than passively managed index funds.
It’s no wonder old established money and young idealists are loving ESG. One group gets to preserve and control the money, while the others become a group of taxpaying ESG Warriors blindly funding the entire movement with their middle class jobs or start up debt from ESG friendly banks.
Furthermore, advocates of ESG investing say that it is “forward-thinking and delivers better returns”, as well as social benefits, but some are questioning whether these funds achieve either goal.
This goes to the core of the issue. Who are the group of appointed people decided what is ESG worthy and what isn’t? An example is Disney’s public protest against a Florida law banning sex ed for children in Kindergarten through third grade, while the company continues to support the oppressive regime in China.
As I wrap up this week’s ESG University Classroom Column, I would like to remind everyone reading this, if ESG predictions and investments fail to deliver profits, those impacted will be pensioners and taxpayers, not Wall Street, Madison Avenue or the slue of appointed ESG officials.
Makes one wonder if history is going to repeat itself once again due to special interests using government corporate powers for corruption.
In 1974, there was quite a bit of misuse of private companies’ pension money, so the federal government passed the bi-partisan Employee Retirement Investment Security Act (ERISA), which established that pension managers had a legal obligation to act solely in the interests of retirees.
The one ESG loophole is that ERISA does not apply to public pensions, leaving state pension managers more leeway to invest for ideological reasons. Looks like another formula to reinterpret the Spirit of the Law from 1974.
When trying to gauge new ESG Approved Retirement Accounts, out of all the bells, whistles and buzzwords, remember this one little thing when it comes to budgeting your money. Over the past year, an index of energy companies delivered a return of more than 60 percent since the COVID Lockdown of 2020.
Class dismissed til next week.
Questions on today’s lesson? Know someone using Ethical Energy? ESG University wants to know who these leaders are as we continue to showcase and highlight ESG solutions in energy. For consideration, please email studio@thecrudelife.com companies, people and organizations showing ESG in action.
ESG University Classroom Column is written by Jason Spiess and no way reflects the mission or position of his other media companies. ESG University is an educational paper with classic newspaper op/ed elements sprinkled in. Because of this, we must categorize the column as Opinion and Editorial and run this disclaimer.
If anyone would like to schedule an interview, meeting or news tip email studio@thecrudelife.com
Industrial Integrity and Energy Ethics are the new entry level expectations in oil and gas, and The Crude Life continues to create original Local, Boots-On-The-Ground Journalism while showcasing other environmentally conscious companies.
Communication is vital in today’s energy extraction and empowerment.
About The Crude Life
The Crude Life produces original content that focuses on industry, the people, energy innovations, community building and it’s proactive culture. Our custom content is non-polarizing, trusted and often news making.
The Crude Life promotes a culture of inclusion and respect through interviews, content creation, live events and partnerships that educate, enrich, and empower people to create a positive social environment for all, regardless of age, race, religion, sexual orientation, or physical or intellectual ability.
Part of our mission is to enable people, companies and communities to affect change, demonstrate their transformative actions and drive energy awareness through storytelling and access to resources.
Sponsors, Music and Other Show Notes
Studio Sponsor: The Industrial Forest
The Industrial Forest is a network of environmentally minded and socially conscious businesses that are using industrial innovations to build a network of sustainable forests across the United States.
Weekly Sponsor: KBL Complete Services
Strikingly dynamic, incomparably strong and absolutely reliable, KBL Complete Services excels at all of your pipeline needs. From AGM Surveys, ILI tool tracking, Digsite Locating, and Equipment Decontamination, to Project Management, KBL Complete Services are ready to make your project a success.
Weekly Sponsor: Great American Mining Co
Great American Mining monetizes wasted, stranded and undervalued gas throughout the oil and gas industry by using it as a power generation source for bitcoin mining. We bring the market and our expertise to the molecule. Our solutions make producers more efficient and profitable while helping to reduce flaring and venting throughout the oil and gas value chain.
Join Podcasters from across the world and all walks of life as they unite to bring civil solutions to life and liberty.
Studio Email and Inbox Sponsor: To Be Announced
Featured Music: Alma Cook
For guest, band or show topic requests, email studio@thecrudelife.com
Spread the word. Support the industry. Share the energy.
If anyone would like to schedule an interview, meeting or news tip email studio@thecrudelife.com
Industrial Integrity and Energy Ethics are the new entry level expectations in oil and gas, and The Crude Life continues to create original Local, Boots-On-The-Ground Journalism while showcasing other environmentally conscious companies.
Communication is vital in today’s energy extraction and empowerment.
About The Crude Life
The Crude Life produces original content that focuses on industry, the people, energy innovations, community building and it’s proactive culture. Our custom content is non-polarizing, trusted and often news making.
The Crude Life promotes a culture of inclusion and respect through interviews, content creation, live events and partnerships that educate, enrich, and empower people to create a positive social environment for all, regardless of age, race, religion, sexual orientation, or physical or intellectual ability.
Part of our mission is to enable people, companies and communities to affect change, demonstrate their transformative actions and drive energy awareness through storytelling and access to resources.
Sponsors, Music and Other Show Notes
Studio Sponsor: The Industrial Forest
The Industrial Forest is a network of environmentally minded and socially conscious businesses that are using industrial innovations to build a network of sustainable forests across the United States.
Weekly Sponsor: KBL Complete Services
Strikingly dynamic, incomparably strong and absolutely reliable, KBL Complete Services excels at all of your pipeline needs. From AGM Surveys, ILI tool tracking, Digsite Locating, and Equipment Decontamination, to Project Management, KBL Complete Services are ready to make your project a success.
Weekly Sponsor: Great American Mining Co
Great American Mining monetizes wasted, stranded and undervalued gas throughout the oil and gas industry by using it as a power generation source for bitcoin mining. We bring the market and our expertise to the molecule. Our solutions make producers more efficient and profitable while helping to reduce flaring and venting throughout the oil and gas value chain.
Join Podcasters from across the world and all walks of life as they unite to bring civil solutions to life and liberty.
Studio Email and Inbox Sponsor: To Be Announced
Featured Music: Alma Cook
For guest, band or show topic requests, email studio@thecrudelife.com
Spread the word. Support the industry. Share the energy.
