26 Jan 2022 ICYMI: Soukup Provides ESG 101
In his daily newsletter providing a much appreciated sanity check for those of us pushing back against the liberal ESG agenda, FEP ally and author of The Dictatorship of Woke Capital, Stephen R. Soukup, provided a must-read overview last week explaining the ESG agenda and why we must remain vigilant against this threat to our culture and pocketbooks.
Soukup begins by explaining the many reasons why ESG investing isn’t going away anytime soon. What’s the first reason listed you might ask? Why it’s the government of course. That’s correct, leftwing government agencies at the federal, state, and even local levels continue to prop up this flailing and arguably unlawful investment practice by using public employees’ pension funds as a testing ground for ESG investment strategies. Worse yet, being unsatisfied with its command over the retirement funds of government workers, Biden’s Labor Department is also pushing regulations all but forcing their ESG strategy on the private sector.
After listing several other reasons for ESG staying-power such as ideological stubbornness and its corporate ringleader, BlackRock’s Larry Fink, Soukup’s newsletter goes on to define several key terms in the anti-woke pro-free market capitalism nomenclature. Leading with ESG itself, which is short for “Environment, Social, and Governance” investing, Soukup frames ESG for what it really is: a tactic. Elaborating further on the concept, Soukup writes:
“It is a specific investment approach designed to maximize investors’ emotional fulfillment while, at the same time, purporting to hold businesses accountable for their behavior. ESG is more aggressive and coercive than traditional socially responsible investing….It has general characteristics (many of which need greater clarity and definition) all of which revolve around the idea that one can ‘do well by doing good.’”
Understanding that ESG is a tactic is key to approaching the problem and winning the battle. Sadly, as Soukup points out, ESG is just one of many tactics in the broader strategy of shareholder activism that our movement must address. As he reminds us, “Shareholder activism is about changing companies’ behavior, regardless of its effect on its shareholders’ return on investment and, sometimes even, regardless of the effect on the company itself.”
Indeed, this change in company behavior – regardless of its effect on its shareholders’ return on investment – is one of the chief concerns with the potential impact of ESG on retirement funds, not to mention the potential dereliction of fiduciary duties from fund managers who place ESG priorities above the pecuniary interests of their clients who hope to earn enough to retire one day.
To read Soukup’s full post and learn more about ESG investing and the broader issue of woke capitalism, click here.