Conservative states working to keep state funds out of the environmental, social, and corporate governance (ESG) movement are finding that, when it comes to state fund managers, you can lead them to water but can’t always make them drink.
Simultaneously, pension managers are also voting against shareholder proposals that would examine companies’ exposure to China, the AAF reported.
“I don’t like this term, but you essentially have a deep state within these pension programs that is not listening to elected leadership,” AAF President Tom Jones told The Epoch Times. “The elected leadership has given very clear guidance on this: Here’s what we want you to do regarding ESG, this is what the voters of our state have said they want,” Jones said, but fund managers continue to vote shares according to their own personal beliefs.
Under the slogan of “where ESG goes to die,” Florida has been one of the most aggressive states working to remove politics from state investments.
On May 2, 2023, DeSantis signed into law a bill that barred state officials from using public money to promote ESG goals.
Florida has also taken other steps against the ESG movement, such as barring banks from imposing personal social credit scores on their customers.
Jimmy Patronis, the state’s chief financial officer, stated that Florida was “fighting back against ESG and social credit scoring … Floridians deserve a banking system that works for them and not some corporate activists.”
“To participate in banking with state or local governments, financial institutions will have to sign an attestation that they will not discriminate against individuals or businesses on the basis of ESG standards,” Florida Deputy Chief Financial Officer Frank Collins told The Epoch Times.
Despite this, Florida’s SBA, which manages the state’s pensions, voted for a resolution at Boeing on April 18, requiring race and gender equity audits, the AAF reports. On May 4, the SBA voted in support of a “Diversity and Inclusion” audit at UPS. The SBA voted for climate activism resolutions at Berkshire Hathaway on May 6, and at UPS on May 4.
However, the AAF report cites instances such as the Ohio Public Employees Retirement System (OPERS) voting for a resolution at AT&T to block the company from donating to pro-life lawmakers; voting for a resolution at Home Depot against donating to police foundations; voting for racial equity audits at Disney and Home Depot; and voting for a “net zero emissions audit” at ExxonMobil.
The Ohio Public Employees Retirement System, however, denied that political issues are a factor in how they manage state funds.
“OPERS does not permit ideologies to influence our investment or proxy voting decisions,” Michael Pramik, OPERS spokesman, told The Epoch Times.
ESG Shareholder Proposals Escalate
A March 2023 Wall Street Journal report stated that the number of shareholder proposals related to ESG has increased from about 600 in the 2020 spring annual meeting season to 682 so far this year.“What we’ve seen is that the left has very significantly captured the leadership space in the financial sector,” Jones said.
But as conservatives begin to follow the same path, the number of shareholder proposals against ESG initiatives has increased fourfold, from fewer than 20 in 2020 to 74 this year.
AAF reported that at Apple Inc.’s March 10 shareholder meeting, Florida’s SBA and OPERS, as well as Pennsylvania, North Carolina and California pension funds, voted against a proposal to report to shareholders “on the nature and extent to which corporate operations depend on, and are vulnerable to, Communist China, which is a serial human rights violator, a geopolitical threat, and an adversary to the United States.”
OPERS and Florida’s SBA voted against similar shareholder proposals at Intel, Goldman Sachs, McDonald’s, Merck and Starbucks, as in many cases did Pennsylvania and California pension managers.
“The ESG movement has consistently ignored the perils and risks of investing in China, including via passive investment products that funnel U.S. investment to Chinese companies connected to forced labor, companies aiding the authoritarian Chinese government’s attacks on democracy, and companies helping to construct China’s historic buildup of coal-fired power, to name a few,” Nick Iacovella, senior vice president at the Coalition for a Prosperous America, told The Epoch Times. “If these supporters of the ESG movement really cared about what they preach, they would use the movement to end investment in China.”
Glass Lewis responded to an Epoch Times request for comment by highlighting its corporate policy, which states that “Glass Lewis evaluates all environmental and social issues through the lens of long-term shareholder value. We believe that companies should be considering material environmental and social factors in all aspects of their operations and that companies should provide shareholders with disclosures that allow them to understand how these factors are being considered and how attendant risks are being mitigated.”
The Epoch Times reached out to Florida’s State Board of Administration to comment but did not receive a response by press time.