It’s time to rein in the ESG

Opposition to ESG practices is growing as Congress and attorneys general from across the country highlight practices that cause major banks, asset managers and financial advisors to take ESG covenants that violate their fiduciary responsibilities to their investors.

The ESG and the Corporate Equity Index (CEI) are part of the so-called “ethical investing” movement driven by progressives, activist shareholders, and proxy voters, which push investments toward liberal priorities that run counter to investors’ interests.

When banks or asset managers control the holdings of thousands, if not hundreds of thousands of investors, they wield enormous power in the markets. When those banks and asset managers use that same power to push ESG targets over investor returns, they are defrauding the investor.

CEI was created by the Human Rights Campaign (HRC), the largest LGBTQ+ lobbying organization in the country. Companies are awarded a CEI score and can lose points if they do not comply with HRC’s demands. These demands include a set of progressive social priorities that have nothing to do with maximizing returns for investors. It is now common within companies to see Diversity, Equity, and Inclusion (DEI) officers enforce the dictates of the HRC.

ESG opposes fossil fuel investing, pushes to unionize private companies, pushes racial and gender equality on meritocracy, and showcases their impact on who is chosen to sit on corporate boards.

Massive asset managers, led by BlackRock and State Street, two of the largest shareholders in many of the world’s largest companies, enforce ESG and CEI on the companies they’ve invested in, even when it means bypassing those companies’ boards. comp.

This amounts to a complex system that forces corporations and their boards to comply with a political agenda that conflicts with the interests of the corporations, their boards of directors, the retirees and investors who have entrusted their savings to these banks and asset managers.

And this is not only about politics, but also about our economy and national security. These investments often represent a diversion from the economic, energy, and national security needs of the United States. In addition, these changes lead to an increase in the cost of goods, which greatly affects the US economy.

As Congressman James Kummer (R-KY), chairman of the House Oversight and Accountability Committee, said at a congressional hearing in May, “ESG is a political movement that affects consumers, not just investors.”

Congressman Gary Palmer (R-Alrina), who also serves on the committee, said, “What we’re seeing in ESG-driven investments is not only a threat to our economy, but a threat to our food supply. It’s also a huge help to China.”

As Secretary of State, I oversee the state’s securities industry. In a free market economy, we cannot prevent investors from investing in anything they want. But we can ask those who are entrusted with the retirement savings of Missouri citizens to put their interests ahead of progressive activists. On June 1, it passed a rule requiring investors to agree to acknowledge their choice to forgo higher returns for non-financial goals. It did so in the wake of the legislature’s failure to develop legislation that would protect investors. Georgia, Mississippi, and Wyoming are some of the states that follow Missouri’s lead in ESG.

Any investor who wishes to invest in companies that comply with ESG and CEI practices is entitled. But every investor, whether ESG/CEI invested or not, has the right to know when a bank or asset manager chooses to invest their pension or portfolio in a way that sacrifices maximum return.

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