The chief executive officer of the State Financial Officers Foundation says “we never really saw the [environmental, social, and governance] movement weaponized in a way that this White House and administration [have] weaponized it.”
“Certainly, fund managers like BlackRock, State Street, Vanguard have weaponized it, and so it’s really just been in the last two years that we’ve seen them use funds, like pension retirement funds, in a way that leverages those dollars to push these social agendas,” Derek Kreifels says of the so-called ESG movement.
“And so, our simple premise and argument has been, if most Americans knew how their pension fund dollars were being invested, they would probably be appalled and shocked,” Kreifels says. “And so, we launched a campaign called ‘Our Money, Our Values.’”
Kreifels adds:
It’s available at our website OurMoneyOurValues.com, where we’re trying to educate Main Street America on the dangers of ESG investing and what they can do specifically at the retail level to go to their neighborhood financial adviser and ask certain questions about the kind of fund managers that are managing their dollars and how to change that if there are companies that are managing dollars that they don’t necessarily agree with their actions.
Kreifels joins today’s episode of “The Daily Signal Podcast” to further discuss environmental, social, and governance policies, some of the ways that the State Financial Officers Foundation is helping states navigate the ESG issues and what resources are available to them, and what the media are missing in their coverage of ESG.
Listen to the podcast below or read the lightly edited transcript:
Samantha Aschieris: Derek Kreifels is joining us today. Derek is the CEO of the State Financial Officers Foundation and has been one of the leading voices opposing environmental, social, and governance, or ESG, policies. Thanks so much for joining us.
Derek Kreifels: Yeah. Thanks for having me. It’s great to be here.
Aschieris: Yes. Well, we are so happy to be interviewing you today on such an important topic. As I mentioned, the State Financial Officers Foundation has really been one of the most vocal organizations in the fight against ESG policies. But before we get any further, can you just remind our audience what ESG is and some of the concerns surrounding it?
Kreifels: Absolutely. So ESG stands for environmental, social, and governance. It’s a form of investing that really sidesteps the democratic process. It is a group of activists, investors, fund managers, and banks that are trying to push the leftist agenda, this social policy, through and sidestep the democratic process.
They know they can’t get some of this legislation passed in Congress anymore, and they know that they can’t get it through the courts. And so this is a last-ditch effort to try to make sure that their vision of America, which is very different than ours, is achieved.
Aschieris: Yes. Absolutely. And I wanted to talk specifically now about your foundation and some of the ways that you’ve been able to help states navigate these ESG issues and what resources are available to them.
Kreifels: Absolutely. So we provide the tools. We’re a 501(c)(3) educational organization. So we get to provide tools to state governments, mainly state treasurers, state auditors, state controllers. We represent 28 states, 35 state officials from 28 states.
Aschieris: OK.
Kreifels: And so a great group of freedom-loving, free market men and women who, most cases, are statewide elected officials. And over the last year and a half, we’ve been providing information and data so that they can make decisions that are best for their states.
We’ve seen eight states divest over $5 billion from companies like BlackRock. We’ve seen model policies pushed out and enacted that strengthen fiduciary responsibility in their states. We’ve seen model policies that enact an anti-discriminatory policy toward fund managers that might be boycotting the fossil fuel industry, for example.
And so we are there just to provide the tools and the information, and then each of those state officials working with their governors, their AGs can make the best decision for their state on what is the best solution.
Aschieris: Over the last couple of years and even over the last couple of months, really, the momentum around ESG has been building and we’ve been having more conversations around it. When did you first notice the issue of ESG come to light? Do you think it was gradual? Was it all at once? Where do you see it as?
Kreifels: Yeah. We’ve known about ESG investing for several years. We worked with several different financial firms that we knew … had ESG products available to their customers. But we never really saw the movement weaponized in a way that this White House and administration has weaponized it. Certainly, fund managers like BlackRock, State Street, Vanguard have weaponized it. And so it’s really just been in the last two years that we’ve seen them use funds, like pension retirement funds, in a way that leverages those dollars to push these social agendas.
And so our simple premise and argument has been, if most Americans knew how their pension fund dollars were being invested, they would probably be appalled and shocked.
So we launched a campaign called “Our Money, Our Values,” it’s available at our website OurMoneyOurValues.com, where we’re trying to educate Main Street America on the dangers of ESG investing and what they can do specifically at the retail level to go to their neighborhood financial adviser and ask certain questions about the kind of fund managers that are managing their dollars and how to change that if there are companies that are managing dollars that they don’t necessarily agree with their actions.
Aschieris: What are some of the type of questions that you could ask if you wanted to figure out whether or not your money is being invested this way or another?
Kreifels: Yeah, yeah. So a few of them would be, “Is my money invested in a fund manager that is focused on [diversity, equity, and inclusion] initiatives or environmental issues, or are they enacting shareholder proposals during proxy season that would do any of those things?”
And so we lay that out in a really simple, downloadable PDF that doesn’t cost anything, doesn’t ask for anybody’s personal information. They can go to that website, download it, and take it into their financial adviser.
Aschieris: That’s great. I wanted to also ask about, in your view, what you’ve been seeing as some of the most visible examples of ESG just in our daily lives.
Kreifels: Yeah. So, we can certainly see it on the global scale. It’s been happening in Europe for several years before it really hit here in a strong way.
Many people saw on the news a situation in Sri Lanka where the government broke down. There was mass chaos. Families didn’t have fuel for their vehicles, didn’t have cooking fuel. Most Sri Lankan families, they’re an island nation, they cooked their food on a small, little gas stove, and they didn’t have the fuel to be able to cook. All of that was a direct result of ESG policies put in place by the federal government there.
We’ve also seen Dutch farmers protesting, driving their tractors to block interstates and to raise awareness of what the Dutch government’s trying to do in the name of methane mitigation, because the waste from cows puts methane into the air.
And so what a lot of these ESG protesters don’t understand—and I’m based in the heartland. I’m in Kansas City. A lot of our treasures are our Plains states, flyover states. We work with agriculture and farmers. And you cannot mass produce food without some of these products, some of these chemicals, and some of the things that they’re fighting against. And so we’re trying to, again, educate the agricultural community, the business community.
We’ve seen different initiatives being introduced in shareholder proposals, even on social issues like abortion rights, where some nefarious fund shareholders are introducing proposals that would require T.J. Maxx, Walmart, Lowe’s to offer a three-day paid trip for an abortion to California.
And so it’s some of those kinds of things that we’re seeing that are very real that they’re doing all under the ESG banner, under that social aspect of the ESG.
Aschieris: I want to talk a little bit about some of the state efforts. We’ve seen so far the governors of Utah, Kentucky, West Virginia, and Arkansas in 2023 sign legislation into law aimed at combating ESG policies. And more than a dozen states have introduced or are considering taking action on similar bills. What is your message to these states that have yet to pass legislation, maybe are still working through it, and why is it so important in your view for them to do so?
Kreifels: Well, I think the message should be directed to the people of those states first to say, “If you want to retire when you feel like you should be able to, ESG could change the year of your age of retirement, could make a difference between you retiring at age 65 or having to wait until you’re 66 or 67, because, frankly, the returns aren’t going to be there.”
When companies and institutional investors invest their dollars in a way that are focused on these social issues, they’re not paying attention to the best rate of return for their investment.
And so we’ve seen resistance in states from pension funds, a lot of state staff. The deep state is just as deep and dark in the state governments as they are in the federal government. And the bureaucrats engaged in those different pension funds, they’re pushing back and they’re buddies with some of the big fund managers that we’ve been talking about.
And so they’re scared. They are trying to scare people by making huge fiscal notes where they’re not willing to back up the math on those. And we’ve seen time after time even the same talking points being shared in multiple states.
So our state treasurers, state auditors, they’re not going to go away. They’re not going to back down. They’re here to bring some sanity to pension systems, to fiduciary law, which is really what we’re talking about. That’s the foundation of the argument: fiduciary responsibility. Without that, you can’t have good returns to provide for retirement for folks.
Aschieris: I also wanted to get your thoughts on, if we look at the media coverage of ESG—
Kreifels: Yeah.
Aschieris: … what do you think is being missed in the reporting of ESG?
Kreifels: That’s a great question. I don’t know if it’s missing in the actual reporting of ESG, but I would say I’ve been surprised by the lack of ESG being on the forefront of some of our presidential candidates.
As more and more come forward and announce their candidacy, this is the biggest issue affecting all levels of the American financial system. They’re trying to change it, right? It’s an introduction of a form of socialism modeled after the [Chinese Communist Party] and everybody else.
So my encouragement is to follow some of the—[former Vice President] Mike Pence has been probably the most vocal person to bring attention to the ESG issue. I would just encourage Sen. [Tim] Scott and [former U.N. Ambassador] Nikki Haley and everybody else to pick up the mantle and start making sure that voters know how dangerous this is for our entire financial security.
Aschieris: Derek, just before we go, I wanted to give you the opportunity to share any final thoughts.
Kreifels: Well, we’re just real appreciative here this week celebrating Heritage’s 50th anniversary. And I’ve often said in public that Heritage Foundation is the firewall, right, for the conservative movement. So we absolutely have to make sure that The Heritage Foundation is strong and out front.
They do so much to support organizations like [the State Financial Officers Foundation] and other organizations around the country, organizations that aren’t in the swamp. We’re in the states. And so we just applaud everything that [Heritage Foundation President Kevin] Roberts has been doing under his leadership, and we just want to do everything we can to support that.
Aschieris: Well, thank you so much, Derek Kreifels of the State Financial Officers Foundation, for joining us today. Always appreciate it.
Kreifels: Thanks so for having me. Really appreciate it.
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