OPINION:
The left is weaponizing your retirement savings. This is happening even while CalPERS (the California Public Employees’ Retirement System) has just admitted that divesting from the fossil fuel industry “does nothing to reduce greenhouse emissions.” This is a stunning admission from one of the earliest and most powerful ESG advocates.
Despite results exposing the harm caused by politicized investing, President Biden recently doubled down and vetoed a bipartisan measure that would have overturned a Department of Labor rule that allowed retirement plans to consider ESG. That rule has enabled activists to use a back door to weaponize trillions of dollars for their own political agendas. Investment decisions made for nonfinancial reasons reduce returns, thus harming economic security for you, your family and our nation.
For the uninitiated, ESG, which stands for “environmental, social and governance,” is a set of undefined criteria that sound beneficial but are, in fact, a cover for progressives to advance their agendas on the back of your investments. ESG has not been legislated in the U.S. but is being imposed by “woke” asset managers, banks and unelected bureaucrats. A number of other prominent fund managers, such as the CEO of Vanguard, have recently declared the problems with ESG. Various prudent states have also taken action to exclude nonfinancial considerations such as ESG from affecting their employee pension funds — the exact opposite of the Biden ESG rule.
These are steps in the right direction. But given the veto by the White House, the next course of action requires a mass uprising by investors against the politicization of their portfolios. That can start with the current round of shareholder meetings.
Proxy season is upon us. Most large companies hold their annual shareholder meetings in April-June. This year, as in years past, progressive activists and groups — such as As You Sow — are filing hundreds of shareholder resolutions advancing ESG, despite the growing backlash against it. By As You Sow’s own count, more than 500 proposals have already been filed. Their goals include the corporate sponsorship of adhering to the Paris climate agreement, supporting abortion, paying for transgender surgeries, and the like. Fortunately, many such proposals have failed in the past. But they are being increasingly pushed this year, and large asset managers could help some of them pass.
Another example, from page 19 of As You Sow’s Proxy Preview 2023, says, “Fourteen proposals (including one that has yet to be disclosed) specifically seek reports about how each company ‘intends to reduce’ GHG emissions ‘in alignment with the Paris Agreement’s 1.5-degree Celsius goal requiring Net Zero emissions by 2050.’”
As pointed out by experts such as Steve Milloy, this 1.5-degree mandate “is arbitrary and has no scientific origin or meaning.” These proposals would make American energy more expensive and less reliable while shifting capital and technology to China, which abuses workers and the environment.
The Albertsons grocery chain is facing a shareholder proposal that demands the company hire on the basis of race and gender categories rather than skills and competence. Similar demands have been filed at Microsoft and many other companies.
Another shareholder proposal would require “transgender-inclusive” health care, which could cover the entire family and thus pay for children getting chemically castrated and mutilated. Others attempt to scare companies away from donating to Republican politicians. And proposals even call on the companies to pay higher taxes.
Are any of these proposals likely to increase shareholder value and your retirement savings? No. They are all about leveraging corporations to advance unpopular agendas Congress can’t legislate.
So what should you do about it? Here are some options:
First, consider transferring your assets to financial advisers who are aligned with your values.
Second, consider some of the solutions proposed in a recent op-ed by Justin Haskins on this issue, such as finding out if your portfolio is affected by ESG; switching from the “default” plan chosen by your manager to another that fits your values; paying close attention to investment fees (ESG fees are usually much higher); hiring a private investment adviser; and considering a Roth IRA, which allows more freedom to avoid ESG investments.
Third, ask your retirement account provider or mutual fund or exchange-traded fund (ETF) manager if they are going to vote your shares in support of any shareholder proposals from political activists such as As You Sow. Take action accordingly, including not delegating your vote to them.
Fourth, it’s always best to vote your own shares when possible.
As an investor, you can make a difference. Vote with your wallet. Vote no on politicized portfolios.
• Paul Fitzpatrick is president of the 1792 Exchange, an organization dedicated to advancing freedom by protecting small businesses and nonprofits and moving corporations back toward neutral.
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