Posted on 12/11/2022 4:07:28 PM PST by george76
th this week’s announcement by the asset management giant Vanguard that it is exiting the Net Zero Asset Managers Initiative, a sub-unit of the Glasgow Financial Alliance for Net Zero, it is clear that the Environmental, Social and Governance (ESG) movement is no longer in unfettered ascension. Although we're still far from being able to claim that U.S. investors are free of the talons of ESG, it is clear that the voice of investors and industry leaders who have been the target of these evangelists can no longer be ignored.
Created to repair the purported damage caused by capitalism, the ESG construct is in reality, far more sinister. The scheme was created as a mechanism to reorient capital flows toward political and social objectives that its progenitors from the World Economic Forum deem important. With help from its less attractive, though equally mischievous step-brother, the United Nations, they together seek to coerce political and social change that many investors do not want.
Vanguard’s announcement came about a week after Consumers’ Research and 13 state attorneys general asked the Federal Energy Regulatory Commission (FERC) to review Vanguard’s request to own energy company stocks, and sought to intervene in Vanguard's blanket authorization renewal request that was pending before the commission. Their brief pointed out that collectively, Vanguard, State Street and BlackRock hold the largest voting blocs for most of the S&P 500, and are the largest investors in public oil, gas, and coal companies, having a combined $300 billion fossil-fuel investment portfolio.
But their membership in the Net Zero Asset Managers initiative, created an intrinsic conflict of interest: support the decarbonization of the industries in which you invest, or do what is legally required and represent the best interest of their investors by maximizing returns. The decision was binary. For Vanguard, reason and legal obligation have won out over activism and social bullying.
Until now, asset-management firms have been happy to oblige the vision of these globalists because they believed they would benefit financially. Working in contravention of the sole interest rule and in defiance of legally mandated fiduciary obligations, the largest asset management firms have been attempting to force ESG adoption upon the boardrooms of publicly traded companies so as to transition them to the envisioned New World Order. Seeking power, wealth, and control, they have ordained themselves the arbiters of the acceptable, attempting to define which industries and companies should be permitted to participate in the capital markets and which should be relegated to a world they and their globalist masters unilaterally have decided should no longer exist.
But now, with Vanguard’s withdrawal from the Net Zero Alliance and BlackRock’s recent market thrashing, asset management meddling may have reached its apex. Beginning earlier this year, investors and states attorneys general and treasurers, like those involved in the Consumers' Research filing, began to assert that investors’ interests were not being fiduciarily represented. These asset management giants have until now believed that their sheer economic heft would allow them to coerce companies and investors into using the ESG yardstick while diverting capital into companies that would help shape the new world they and the global activists envision. With a combined portfolio of $15 trillion under management, they unequivocally represent economic heft. But economic scale aside, market returns and the legal protections conveyed to investors and codified in U.S. law remain an unforgiving reminder of reality.
This week Vanguard was reminded by business leaders and investors of its core business and related legal obligations. Its very existence was threatened by its ESG promises to impede returns. Likewise, BlackRock pension fund clients have reminded CEO Larry Fink that his annual pronouncements of the value of stakeholder capitalism and ESG are falling flat. In the face of abysmal returns and market conditions created by poor economic and monetary policy, investors are demanding an abandonment of the ESG eco-system.
BlackRock’s unprecedented $1.7 trillion losses in the first six months of the year has caused an exodus of pension fund clients worth nearly $4 billion. Arizona’s treasurer last February quietly pulled $543 million from BlackRock. Then in early August, 19 state attorneys general sent a joint letter to them expressing concerns that the company’s ESG agenda is impeding its ability to deliver a maximum return on investment for its shareholders. They wrote:
Rather than being a spectator betting on the game, BlackRock appears to have put on a quarterback jersey and actively taken the field. As a firm, BlackRock has committed to implementing an ESG engagement and voting strategy across all assets under management, and held over 2,300 company engagements on climate, the most of any category of engagement.
Then last month, Missouri Attorney General Scott Fitzpatrick divested $500 million in assets managed by BlackRock on behalf of the Missouri State Employees’ Retirement System. Louisiana’s treasurer, John Schroder told the Financial Times that he will divest $794 million. Utah and Arkansas likewise committed to pull $100 million and $125 million, respectively. Meanwhile, South Carolina’s state treasurer will remove $200 million of state retirement funds from BlackRock. And most recently, Florida announced it will pull $600 million of short-term investments, while freezing $1.43 billion of long-term securities, with an eye on reallocating the capital to other money managers by the start of 2023.
These state attorneys general and treasurers understand leverage. BlackRock assets under management dropped 16 percent year-on-year to $7.96 trillion, decreasing its net income by 17 percent. Meanwhile, shares in BlackRock are down roughly 30 percent this year ----underperforming the benchmark S&P 500 Index.
Vanguard has taken notice of BlackRock’s plight and correctly understands that the horizon looks stormy for those in the financial sector who choose to ignore their legal obligations to investors. Still, the ESG counter-revolution has only just begun. Whatever ESG ground that might be lost by private-sector asset management firms, one should assume that a doubling down by the Biden administration is already in motion. Whether through executive orders or regulatory mandates, ESG is the mechanism for governments and globalists to create the dystopic world they yearn for. Investors and states must maintain the pressure.
some good news on this front lately
So chase closing its 2 billion dollar credit card company ??
Why in the hell do CEO’s allow this fifth column? Specifically, they allow all the overhead for diversity and inclusion. They allow the overhead of Human Resources. They allow the overhead of anti-science climate excrement. They allow contributions to worthless and wasteful charities in the name of virtue signaling. They allow the active support of organizations like bLM. The allow sexual deviance in the form of supporting LGBTQXYZ++. All of these thing cost money and productivity.
They allow wokeness and political correctness to stifle free speech.
That’s the worst one. Without free speech there is not an exchange of ideas. Solutions are limited. Creativity dies. Speech is thought. Thinking dies. Wokeness isn’t about not offending people. It’s about shutting you up and controlling you.
CEO’s clearly see the negative impact because they create worthless programs and departments dedicated to innovation. That’s a bull💩idea, as if innovation never occurred in business before today. These eff’n morons don’t know how to solve the problem of a lack of creativity and innovation because they don’t know what’s causing the problem.
Corporate America survives despite itself today. It could be so much more, but I doubt that will ever happen. If fact, corporate America is doomed because it is run by thoughtless morons that can’t even see the enemy within.
Stepping off soapbox.
I was thinking that it would be better if he was in a 2' X 6' box at a 6' depth, with the contents of said hole placed firmly over the box.
Maybe a nice stone to mark the occasion...
When I wrote that, the thought crossed my mind that Elon Musk might be one CEO that has recognized what is occurring in big business. He’s fired 75% of worthless employees at Twitter and now Twitter is seeing a massive increase in users. Perhaps he didn’t go into the firings knowing the full extent of the problem, but there’s a good chance he gets it now. (I’m no Musk fan by the way. He needs to break ties with the CCP)
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Fink is committing suicide when the numbers catch up with him. Surely this is true. He will still have woke followers but people sometime or another find out they are falling behind and want to make money.
I wonder when the fiduciary issue comes to the forefront and actions are taken?
I also have a dream that one day the sheeple will figure out that green energy is not going to work and is just costing them a butt load of money. There is no viable solution to storage for no wind and no sun, not even low of each. The gallons of gasoline saved by the paltry numbers of EVs has cost the equivalent of $26 a gallon in subsidies. That is bound to make taxpayers happy someday. Maybe, I hope. As Manhattan Contrarian reports, NREL’s blue ribbon panel only offers that at the end of 10 years of research may result in some solutions that enable green energy someday leaving 3 years to meet the the 100% green energy goal. That is a painful 13 years at the current pace of waste. In the lengthy NREL report they identify lots of problems and virtually no solutions.
I was screening funds the other day and it dawns on me, I’m slow, that all the funds are trying to beat some benchmark. Most simply don’t, the low cost ETF is the index and does well against the index of course. What is more, the ETF trades all day long instead of the butt clenching wait until close if you are bent on selling into a falling market, I don’t. What is the point of paying some revolving door fund manger instead of buying an ETF? None.
I wonder how much longer mutuals go on and how much longer people are going to be willing to handsomely pay managers to be woke and not beat the indices handily? There are alternatives and there is nothing wrong with them.
They are not “allowing” this crap, they ENDORSE it.
CEOs fell way off the list of being remotely lionized to me when I dealt with their reliance on big expensive consulting firms like Boston to tell them what to do. Most just ain’t mavens of the business world. At least that is my experience with them.
What I don’t understand is how the Board allows this junk without going to jail. It becomes a bit like safety, until you are willing and able to put a value on your decisions it is all doable and justified. Nobody these days is willing to throw down the penalty flag and call horseshit.
Insurance companies are implementing this too. I’m convinced the ChiComs are handling the data.
We totally quit an insurance company because of this.
I can give specifics if you like.
Thanks!
Wow. Thanks for all the info.
This is wonderful news to read first thing in the morning. Ive wondered how in the world the “Evil Three”, as I call them, have been able to invest exactly opposite of the best financial wisdom just to push their ESG insanity. I’m thankful states and individuals still have the freedom to choose how their money is invested, I hope this is the beginning of the end for them. Between Big Tech censorship and Evil Three financial bullying, these last three years have seen such destruction of our way of life.
Glenn Beck got this out early. Hoping it’s really going and not just repackaged.
Doubtful, they will just call it something else.
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