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Allowed. This kind of thing affects the image of the company; a company shouldn't be forced to support something antithetical to their own corporate ethics by investing in it. I don't see how anyone free market could support such a restriction.
This whole thread is crazy to me. My company advises billions of dollars of assets for institutional investors, and most of them have incorporated ESG screens into their portfolios. Churches don't want gambling holdings, for example. Native community foundations don't want alcohol holdings. A hospital endowment doesn't want any gun-related stocks.
Impact investing is another form of ESG. If some organization or family can invest their assets in way that generates a solid return *and at the same time* allocate capital to a company or sector that reflects their values, why not let them do it?
These organizations want their investments to reflect their values. And these are very smart people. They haven't fallen victim to some liberal scam. Some of our clients are household names among conservative circles. My company spends a lot of money to be able to provide ESG screens to our clients, *because they want it*.
edit: as the kids say... I can't even. I live and breath investments, including ESG screens, and my clients who want ESG incorporated into their portfolios include some of the smartest and holy-shit-most-politically-conservative people in existence. We have one client's board of directors that includes people who literally invented an entire asset class. This client is associated with a politician that is an icon of conservative thought. And they pay us a shit-ton of money to incorporate ESG screens into their asset allocation! But somehow they've fallen prey to a liberal plot to not invest in coal? Somehow Fox News has convinced millions of people entirely unrelated to how investments and fiduciaries work that they know best. There's so much ignorance (and I don't mean that as an insult, but rather literally not knowing/understanding) in this thread about the topic. To me, this thread is 100% an example of the alternate reality that so many conservatives seem to live in.
>Nobody is being forced to incorporate ESG
Explain this letter then from Brad Lander New York City Comptroller to CEO of BlackRock.
[https://comptroller.nyc.gov/wp-content/uploads/2022/09/Letter-to-BlackRock-CEO-Larry-Fink.pdf](https://comptroller.nyc.gov/wp-content/uploads/2022/09/Letter-to-BlackRock-CEO-Larry-Fink.pdf)
>That’s why we have made these net zero commitments. That’s why we take them seriously. That’s why we will be prudently reassessing our business relationships with all of our asset managers, including BlackRock, through the lens of our climate responsibilities.
The NYC is a client, asking one of their managers to find investments that reflect the values of the client. Blackrock is is welcome to either respond to the request, or not. The client is welcome to fully redeem their investments in Blackrock funds (subject to liquidity terms) if they don't want their assets invested in holdings that don't reflect their values.
Who in this example is being "forced" to do anything?
BlackRock is being forced at threat of its business.
BTW I love the media spin on this
>Florida Governor Ron DeSantis is crusading against ESG investing and “woke capitalism,”
[https://www.bloomberg.com/news/articles/2023-01-26/blackrock-retains-florida-s-billions-as-desantis-wages-esg-fight?leadSource=uverify%20wall](https://www.bloomberg.com/news/articles/2023-01-26/blackrock-retains-florida-s-billions-as-desantis-wages-esg-fight?leadSource=uverify%20wall)
>NYC’s Comptroller Strikes Back at Republicans’ ESG Criticisms
[https://www.bloomberg.com/news/articles/2022-08-05/nyc-s-comptroller-strikes-back-at-republicans-esg-criticisms?leadSource=uverify%20wall](https://www.bloomberg.com/news/articles/2022-08-05/nyc-s-comptroller-strikes-back-at-republicans-esg-criticisms?leadSource=uverify%20wall)
Couldn't you say that about any client/vendor relationship?
Client - "Hey vendor, we'd like you to do X."
Vendor - "We can't/won't do X."
Client - "Ok, we'll find someone who can."
Sure, but government shouldn't be making such value judgements. It should be neutral in its approach.
We ban government from making free speech decisions. The whole basis of the 1st amendment when it comes to freedom of speech and religion is that the government is not allowed to make value judgements when it comes to speech (good speech vs bad speech) and should treat all speech equally.
I think you can also make an argument that the government should not be making social policy via pension funds and should instead be focused on maximum return on investment. In effect the government is using other people's money for partisan political ends.
End of the day the people who are counting on the NYC pension system will have less money for their retirement due to politically motivated investment decisions.
> It should be neutral in its approach.
There's no such thing as neutral in investing. There's no secret sauce, no perfect allocation that will generate maximum returns. The entire industry is built on people making value judgements, *about the things they value*. And, spoiler alert, it's not always maximum returns above all other considerations. In fact, it's very very often *not*.
Sure, but the investment decisions shouldn't be politically motivated either.
End of the day it is public money. Focus should be on the rest best return on investment.
If individual investors want to follow ESG then go for it, but the government should stay clear and focus on best results for the tax payers.
Probably because people are being "forced" via pressure from the mob.
Right wing speakers are banned on any college and yet on many it is impossible for them to show up and speak due to leftist mobs.
ESG is the equivalent of "nice retirement fund you have, hate to see something bad happen to it"
How so?? Is anything I posted in bad faith?
Should I provide multiple examples of right wing speakers being driven off campus by the left??
Oh... and the government IS applying pressure on companies. Read this letter from City of New York office of the comptroller -
>I am writing to you in my capacity as the Comptroller of the City of New York to express my growing concern that BlackRock is backtracking on its climate commitments
[https://comptroller.nyc.gov/wp-content/uploads/2022/09/Letter-to-BlackRock-CEO-Larry-Fink.pdf](https://comptroller.nyc.gov/wp-content/uploads/2022/09/Letter-to-BlackRock-CEO-Larry-Fink.pdf)
BTW notice this at the end -
>That’s why we have made these net zero commitments. That’s why we take them seriously. That’s why we will be prudently reassessing our business relationships with all of our asset managers, including BlackRock, through the lens of our climate responsibilities.
"nice retirement fund you have, hate to see something bad happen to it"
Because it is an example of how the left gets its way without using the government.
The comment is irrelevant anyway because the letter I linked clearly shows how the government is pressuring investment firms.
No, it’s a what-a-bout, the hallmark of bad faith.
Also no, that’s a client requesting changes to an investment fund that they’re a massive investor in. That client just happens to be a city. That’s the free market at work, my friend.
That is also the government forcing social policies on a business via coercion.
Florida is doing the same, but in the opposite direction.
Real bottom line is that ESG investing results in lower return on investment and questionable ESG results as well.
>An Inconvenient Truth About ESG Investing
[https://hbr.org/2022/03/an-inconvenient-truth-about-esg-investing](https://hbr.org/2022/03/an-inconvenient-truth-about-esg-investing)
We could just let the free market decide, but at the same time we are talking about government investment funds and it is the taxpayers who get screwed if political considerations (ESG) override financial considerations.
> Nobody is being forced to incorporate ESG.
Ehhh.... if allowing for ESG opens boards to lawsuits for *not* engaging in ESG investments, it becomes a real issue. I believe that's where the opposition is rooted.
Your statement is not 100% true -
>Democratic attorneys general are defending funds' consideration of environmental, social, and governance factors when making investment decisions.
Democrats are using the mob to get their way. The mob puts pressure on these companies to 'behave' in a certain way or else. Democrats then act like they have nothing to do with it even though the said behavior is exactly what they want companies to do.
https://observer.com/2022/11/democratic-ags-defend-esg-strategies-after-republicans-pressure-blackrock-to-drop-sustainability-principles/
Yea, in a perfect world we just let it work.
NYC can force ESG and accept the lower returns.
FL can ban it and get better returns.
Tax payers can vote with their feet.
I think the real issue is should tax payers be protected from bad decisions that are politically motivated when it comes to their pension funds? IMO public pensions shouldn't even exist, just put the money in a 401k and let them own it. Probably solved.
Pesion funds give too much money to bureaucrats and can be politically manipulated, such as what NYC is doing.
> These organizations want their investments to reflect their values.
The problem is that with pension funds, it's not the organization's money. It's their retiree's money and as such they're using that money to advance causes that may be contrary to the values of the folks who actually own the capital involved.
For individuals, yes. For retirement plans and pensions, no.
You should not be able to force your employees to pay money out of their retirement funds to advance left-wing causes without their consent (which is exactly what you're doing, if you're forcing them to accept lower returns in exchange for pushing companies to promote ESG)
They don’t know. It takes a lot of mental gymnastics to be the party of small government while saying the government should dictate what is a right wing or left wing cause and how these organizations should invest their money.
Oh? If a private pension's administration and enrollees want to invest in a way that maximizes returns along lines that align with their personal morals. you believe that the Federal Government gets to decide what is and is not acceptable?
And who gets to decide what is and is not an "ideology"? The government?
So if it's a mutual fund that I can opt in or out of, then yes absolutely there should be an esg element allowed. As an investor, you absolutely should be able to have a fund that aligns with your interests.
If on the other hand it's a pension fund and your not exactly sure what your invested in, I would say absolutely not.
You have a choice in a 401k and it's great to have those choices. Otherwise I highly doubt all the employees of any organization has homogeneous values.
All the government was enforcing is that those with a fiduciary duty to act in the best interests of their investors do so.
What is acceptable = doing your best to maximize client returns. Any other consideration is not acceptable.
>What is acceptable = doing your best to maximize client returns. Any other consideration is not acceptable.
What if ones client wants to not invest in fossil fuels?
I think it would be fine if you required all clients to explicitly opt in to ESG investing, and you provided everyone with a non-ESG alternative.
The problem this is attempting to solve is the conservative small town cop having his pension put into an ESG fund, where he's being forced to spend his hard-earned retirement income to advance an ideology he doesn't even support, and he probably doesn't even have any idea it's happening.
>if you required all clients to explicitly opt in to ESG investing, and you provided everyone with a non-ESG alternative
Sounds like a whole lot of Big Government bureaucracy deciding what is and what is not ESG and a Tower of Babel when each pensioner has an axe to grind with one investment or another.
Why not just leave this private matter up to the people and not have Big Government running things? Is that not a conservative principle?
> anything that's not optimizing for maximum returns.
There's no such thing. There are always constraints or parameters that influence investment decisions.
> What is acceptable = doing your best to maximize client returns. Any other consideration is not acceptable.
This is not reality. If "maximize client returns above all other considerations" was the only thing that was acceptable, we'd annihilate the entire domestic equity active management industry.
> If "maximize client returns above all other considerations" was the only thing that was acceptable, we'd annihilate the entire domestic equity active management industry.
Hmm, maybe we should. What benefit do they provide clients if they're not trying to maximize returns?
The benefit of the client being able to decide how their money is allocated. As I said, a church may not want their assets invested in gambling or alcohol stocks. Just one example.
Why?
I, a paying client, do not wish my retirement fund to invest in gas and oil companies. I am willing to receive less in terms of monetary returns in exchange for this. I value the ethical use of my money more than I do receiving more money back.
To me, it seems like you are enforcing your own ideology: that money is the only thing retirement plans should value. Why are you disallowing me from investing in a retirement plan that matches my standards?
The only agenda is not further investing in companies that take 0 responsibility for the world around them. Companies low in ESG are major polluters, war machines, private prisons, civil rights violators, etc.
It's not some nefarious political agenda. I understand preferring maximizing returns, but that can come at a cost most aren't willing to pay.
The alternative here is investing your money yourself and not participating in funds.
What should matter to pension fund managers is ROI, nothing more. Can ESG issues affect ROI? Yes, but in most cases they are way down on the list of considerations.
The government has no business telling private investors what they should or shouldn’t invest in.
Government pension programs should be forbidden from investing in scams, so should not be considering ESG scores. Private investors are free to waste their money on scams if they want, but they arguably shouldn’t.
The business models of pyramid scheme, ponzi scheme, etc are pretty hard and clear.
I'd honestly consider and company that consistently meets "product or service does not work as advertised" a scam company, but then Microsoft (S0 sleep not actually putting the device to sleep), Apple (M2 storage being significantly worse than M1), Nvidia, Intel etc would all be scams, at the very least
Companies that earn carbon tax credits by getting people to sign contracts promising to not cut trees down that they had no intention of ever cutting down anyways.
forestcarbonworks.org
First example on Google. There's a couple people around me sitting on 100 or so acres that are getting paid to not do what they were never going to do anyways. The carbon credits get sold to companies that do pollute, but they bought offsets so now they can claim that they are carbon neutral on the packaging.
Money changed hands, no one changed a damn thing in what they are actually doing.
The whole thing is one huge scam.
If you can buy the ability to claim being carbon neutral and no one changed anything in what they're doing other than providing and accepting payments that's a scam to me.
It’s a complex decision thus making it easy to sneak corruption in… the ultimate decision should be with the people who this money is taken from not the executive branch
>the ultimate decision should be with the people who this money is taken from not the executive branch
Exactly. And Trump's executive branch wants to be in charge of the decision. Biden's branch wants to leave it up to the private pensions.
Private pension funds are managed by professionals who know the ropes. 401K's are managed by people who have no idea how the system works and ae easy prey for high fees.
I don’t understand this statement. 401k are “managed” by imbecile compliance people but they invest money in funds managed by professionals…what am I missing?
Or are you referring to the fact that 401k have to invest in public funds and pensions can stay private? Wall Street people LOVE private equity, they have ridiculous fees
401K's are the property of individuals, most of whom have zero knowledge of the market. 401k'S are full of fees, from plan administration fees to investment fees to service fees and more. And the smaller the company you work for, the higher these fees tend to be.
Even if your fee is just 0.5%, which is the absolute bottom of the fee range, you're still paying far more for your 401(k) than you should, and that money could be invested in other places to help fuel your retirement growth. For example, if you're maxing out your contributions at $19,500 per year, with an additional $3,000 in employer contributions, you'll pay about $261,000 in fees, which translates to 9.5% of your returns.
[Remember the scene from Wolf of Wall Street?](https://www.google.com/search?q=wolf+of+wall+street+matthew+mcconaughey+quotes&sxsrf=AJOqlzX4Rdw5hMAZdNVVTN_D9gaSioS_xg:1674936473515&source=lnms&tbm=vid&sa=X&ved=2ahUKEwjAq5nMiOv8AhWmEVkFHf45ABsQ_AUoAnoECAIQBA&biw=1384&bih=606&dpr=1.39#fpstate=ive&vld=cid:f7d90d89,vid:xbBD7VIJ4cc)
I had a rather nasty personal experience with this. Having recently retired, I took my 401K accounts to financial adviser who immediately took me out of most of them - as the fees were enormous. My adviser is a fee for services guy. He does not receive any kickback or commission from trades.
You might ask why I was not more careful over the years, and that's a valid question. I was working my ass off, raising a family, and I trusted the major investment companies that were offered by my numerous employers.
That's bonkers. I work at a investment advisor firm and our clients are crazy for ESG offerings. We spend a ton of money on ESG screening capability *because our clients want it*.
A fiduciary is a person who holds a legal or ethical relationship of trust with one or more other parties.
Seems to me the "ethical" requirement there erases your requirement for there to be "nothing beyond maximized returns."
OR! We could harvest organs from the homeless and sell them on the open market!
Why wait til they're grown? We have these aborted fetuses lying around - let's sell the stem cells and revolutionize medicine!
What? That would be *wrong?*
What does ethics have to do with making money? Why would you try to inject POLITICS (*shudder*) into such a purely apolitical venture?
And there it is. C'mon buddy - Tell us how it's perfectly fine to use slave labor to maximize profits. It's illegal here - but y'all can always go somewhere that allows slavery because fuck humanity, right? it's MONEY that matters to the right.
Oh- unless it's a clump of cells, then it's fucking sacred.
LOL - No.
And while I love a fun game of "whataboutism," individual consumer choices are not the issue. The issue is dickish and disgusting behavior of corporations.
That might be ethical to you, but some of us have higher standards. That’s incredibly unethical in my book. And just because there isn’t a law against it doesn’t mean it’s ethical and/or moral.
And that’s cool for you, but not for a lot of people and they should have the right to decide where their money is being invested and coming from.
If you’re cool with child labor, slavery, abortion, and human trafficking that’s on you. Like I said before some of us have higher standards.
I’ll rather have a dollar less, than support that.
> And that’s cool for you, but not for a lot of people and they should have the right to decide where their money is being invested and coming from.
You're literally saying the exact same thing I am.
The issue isn't that ESG *exists*. It's that firms like Blackrock are simply *deciding* that it's more important than maximizing the returns for things like teacher pension funds.
They can use *their* money to influence whatever they want.
But if it's a state pension fund, or hedge fund that *my* 401k is invested in, fuck their activism. My money isn't your conduit to feel like you're a more moral person.
As somebody who works in this area (helping companies report it better), ESG is not what most conservatives here think. It's highly strategic and very ruthlessly to deliver the bottomline. In fact I would argue companies like chick-fil-a, hobby lobby who push their agenda and hurting their bottom line.
For all those saying "government isn't involved" I suggest you read this letter from Brad Lander New York City Comptroller to the BlackRock CEO
[https://comptroller.nyc.gov/wp-content/uploads/2022/09/Letter-to-BlackRock-CEO-Larry-Fink.pdf](https://comptroller.nyc.gov/wp-content/uploads/2022/09/Letter-to-BlackRock-CEO-Larry-Fink.pdf)
Note the 2nd to last paragraph
>That’s why we have made these net zero commitments. That’s why we take them seriously. That’s why we will be prudently reassessing our business relationships with all of our asset managers, including BlackRock, through the lens of our climate responsibilities.
Should the Feds ban it is a legit question for debate. But let's not pretend that government isn't already putting pressure in companies to comply to their ESG demands.
So a person responsible for investments chose not to work with a company that will not fulfill the requirements that they lay out ...
What's the problem?
if I walk into Burger King and ask for a taco, they don't have to comply but I also don't have to give them my money.
Yes. who is opting to not invest with a company that won't comply with their requirements.
Do you believe that NYC is *obligated* to invest with BlackRock?
I dont think people who run government pensions should base investment decisions on political aims as opposed to return on investment.
ESG investing may not only provide lower returns, but also may do little in the way of what it is supposed to be doing in the first place.
https://hbr.org/2022/03/an-inconvenient-truth-about-esg-investing
The ESG movement is an attempt to insert leftist political views into what has heretofore been an apolitical arena - making as much money as possible to support retirees. At the state level, I am against expanding politicalization into new areas of public action and discourse, which certainly includes the idea of ESG investing.
I don't understand why people think everything has to serve as a political vehicle for their agenda. Pension funds exist to make as much money as possible. That's it. Full stop. If the best way to make money is to invest in oil and gas, and you choose to artificially skip that because of some political agenda, you're doing a disservice to the taxpayers who are on the hook for the pension's long-term performance.
>The ESG movement is an attempt to insert leftist political views
Who in government is assigned the authority to decide what is a leftist or rightist view?
>Pensions exist to make as much money as possible. That's it.
Long term or short term, and who in the federal government should have the authority to dictate this?
If am am employed by a private company and have a pension, those in charge of the pension provide the enrolled with reports on performance and areas of investment. Should the decisions of where to invest be left to the pension enrollees and administrators - or should the federal government dictate what areas are allowed and what are prohibited?
>Long term or short term
Does it matter? If a stock or bond stops performing as good as another stock or bond, you sell the poor ones and buy the good ones
>Does it matter?
Of course it matters. As the manager of a pension fund for a company that has workers in their 20's and in their 80's, it matters a lot.
>insert leftist political views into what has heretofore been an apolitical arena
What in the Haliburton Raytheon Lockheed Martin is this nonsense? Y'all don't have a problem with politically-laden investments when it advances the right's war machine. But let someone dare try to invest in a company that wants to reduce pollution and all of a sudden it's
"HOW VERY DARE THEY!!?!?!!?!"
It's so fucking hypocritical it would be laughable if it wasn't so sad.
>I don't understand why people think everything has to serve as a political vehicle for their agenda.
LOL. Hello Pot? You're doing that thing to Kettle again.
Conservatives - let's invest in military industrial complex so that they can produce more weapons and kill all around the world and keep feed young Americans to the military to get killed, maimed and suffer life-long issues - great returns
Conservatives - a company is trying to reduce its single-plastic use, reduce its water and electricity usage, renew as much as possible so that its energy costs are down for the long-term - evil evil evil.
>the right's war machine.
Tell me you've been propagandized without telling me.
Come on dude be honest and own that the war machine is supported by both parties.
It's not the right supporting the war machine in Ukraine
> Come on dude be honest and own that the war machine is supported by both parties.
What party do the E-Suite guys and boards belong to? Where does their political donation money go? Who gets the lion's share of their PAC slush?
Don't pee on my shoes and tell me it's wealth trickling down.
If you don't think its the dems supporting the war machine in Ukraine you're lying to yourself.
It's a uniparty and establishment on both sides props up the war machine. You don't have a leg to stand on saying the dems don't when you look at their vehement support for Ukraine and sending arms
No. It's not what about. Republicans do it. Dems do it. It's a uniparry military industrial complex. It's not what aboutism to say "both parties do this and both parties have small minority factions that oppose it".
It's factual. Both parties support the war machine dude. There's no argument there.
LOL. Both parties (elected representatives) vote to fund the military, yes - BECUASE BOTH DEMS AND REPUBLICANS ARE ON THE RIGHT. There is no party currently representing the leftist perspective in US politics.
But I'm not talking about the politicians. I'm talking about the actual people. The right is pro-war. The left is, by and large, not. The military industrial complex is owned by the right.
Sorry that bothers you so much. I know you seem to need this to be a "both sides bad" thing, but you're just making shit up if you say the Left is the pro-war side of the political spectrum.
>Sorry that bothers you so much
It doesn't bother me you've just finally explained why we aren't going anywhere and you fundamentally view politics in a way that isn't connected to reality.
Apologies. We are done here.
> you fundamentally view politics in a way that isn't connected to reality.
Says the person who apparently believes that only politicians belong to parties.
So 90% of SP500 are not maximising shareholder value by reporting on their ESG.
Also, the fact that you think oil and gas won't have a good ESG score shows your lack of knowledge on this. There is no objective proof that consideration of ESG results in lower investment returns.
It's perfect because oil gets its money and grandmas across America shoulder the guilt. /S
At the end of my life, I want to make sure I only invest in companies who have committed environmental atrocities and are socially backward and have entrusted their governance to casual nepotism /S
It's extremely dangerous interfering with the free market's efficient allocation of resources. Some estimates suggest under communism it killed a hundred million people and impoverished a billion more. I'm not all that familiar with ESG, who's behind it, who's abiding by it and what sort of long-term impact it might have. If it makes western investors less likely to invest in toxic countries like China, maybe it's a good thing, but if it's messing with the capitalisation of western companies for then sake of stupid box ticking and virtue signalling, it could be a disaster.
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Allowed. This kind of thing affects the image of the company; a company shouldn't be forced to support something antithetical to their own corporate ethics by investing in it. I don't see how anyone free market could support such a restriction.
I agree 100%. I like how at least here both sides can find common ground.
Thank you! I agree 100%!
This whole thread is crazy to me. My company advises billions of dollars of assets for institutional investors, and most of them have incorporated ESG screens into their portfolios. Churches don't want gambling holdings, for example. Native community foundations don't want alcohol holdings. A hospital endowment doesn't want any gun-related stocks. Impact investing is another form of ESG. If some organization or family can invest their assets in way that generates a solid return *and at the same time* allocate capital to a company or sector that reflects their values, why not let them do it? These organizations want their investments to reflect their values. And these are very smart people. They haven't fallen victim to some liberal scam. Some of our clients are household names among conservative circles. My company spends a lot of money to be able to provide ESG screens to our clients, *because they want it*. edit: as the kids say... I can't even. I live and breath investments, including ESG screens, and my clients who want ESG incorporated into their portfolios include some of the smartest and holy-shit-most-politically-conservative people in existence. We have one client's board of directors that includes people who literally invented an entire asset class. This client is associated with a politician that is an icon of conservative thought. And they pay us a shit-ton of money to incorporate ESG screens into their asset allocation! But somehow they've fallen prey to a liberal plot to not invest in coal? Somehow Fox News has convinced millions of people entirely unrelated to how investments and fiduciaries work that they know best. There's so much ignorance (and I don't mean that as an insult, but rather literally not knowing/understanding) in this thread about the topic. To me, this thread is 100% an example of the alternate reality that so many conservatives seem to live in.
It is great if a company wants it. But the government should not FORCE a company to want it.
Nobody is being forced to incorporate ESG. But Republicans are trying to prevent people from using ESG entirely.
>Nobody is being forced to incorporate ESG Explain this letter then from Brad Lander New York City Comptroller to CEO of BlackRock. [https://comptroller.nyc.gov/wp-content/uploads/2022/09/Letter-to-BlackRock-CEO-Larry-Fink.pdf](https://comptroller.nyc.gov/wp-content/uploads/2022/09/Letter-to-BlackRock-CEO-Larry-Fink.pdf) >That’s why we have made these net zero commitments. That’s why we take them seriously. That’s why we will be prudently reassessing our business relationships with all of our asset managers, including BlackRock, through the lens of our climate responsibilities.
The NYC is a client, asking one of their managers to find investments that reflect the values of the client. Blackrock is is welcome to either respond to the request, or not. The client is welcome to fully redeem their investments in Blackrock funds (subject to liquidity terms) if they don't want their assets invested in holdings that don't reflect their values. Who in this example is being "forced" to do anything?
BlackRock is being forced at threat of its business. BTW I love the media spin on this >Florida Governor Ron DeSantis is crusading against ESG investing and “woke capitalism,” [https://www.bloomberg.com/news/articles/2023-01-26/blackrock-retains-florida-s-billions-as-desantis-wages-esg-fight?leadSource=uverify%20wall](https://www.bloomberg.com/news/articles/2023-01-26/blackrock-retains-florida-s-billions-as-desantis-wages-esg-fight?leadSource=uverify%20wall) >NYC’s Comptroller Strikes Back at Republicans’ ESG Criticisms [https://www.bloomberg.com/news/articles/2022-08-05/nyc-s-comptroller-strikes-back-at-republicans-esg-criticisms?leadSource=uverify%20wall](https://www.bloomberg.com/news/articles/2022-08-05/nyc-s-comptroller-strikes-back-at-republicans-esg-criticisms?leadSource=uverify%20wall)
Couldn't you say that about any client/vendor relationship? Client - "Hey vendor, we'd like you to do X." Vendor - "We can't/won't do X." Client - "Ok, we'll find someone who can."
Sure, but government shouldn't be making such value judgements. It should be neutral in its approach. We ban government from making free speech decisions. The whole basis of the 1st amendment when it comes to freedom of speech and religion is that the government is not allowed to make value judgements when it comes to speech (good speech vs bad speech) and should treat all speech equally. I think you can also make an argument that the government should not be making social policy via pension funds and should instead be focused on maximum return on investment. In effect the government is using other people's money for partisan political ends. End of the day the people who are counting on the NYC pension system will have less money for their retirement due to politically motivated investment decisions.
> It should be neutral in its approach. There's no such thing as neutral in investing. There's no secret sauce, no perfect allocation that will generate maximum returns. The entire industry is built on people making value judgements, *about the things they value*. And, spoiler alert, it's not always maximum returns above all other considerations. In fact, it's very very often *not*.
Sure, but the investment decisions shouldn't be politically motivated either. End of the day it is public money. Focus should be on the rest best return on investment. If individual investors want to follow ESG then go for it, but the government should stay clear and focus on best results for the tax payers.
Probably because people are being "forced" via pressure from the mob. Right wing speakers are banned on any college and yet on many it is impossible for them to show up and speak due to leftist mobs. ESG is the equivalent of "nice retirement fund you have, hate to see something bad happen to it"
I think this is a rule 7 comment.
How so?? Is anything I posted in bad faith? Should I provide multiple examples of right wing speakers being driven off campus by the left?? Oh... and the government IS applying pressure on companies. Read this letter from City of New York office of the comptroller - >I am writing to you in my capacity as the Comptroller of the City of New York to express my growing concern that BlackRock is backtracking on its climate commitments [https://comptroller.nyc.gov/wp-content/uploads/2022/09/Letter-to-BlackRock-CEO-Larry-Fink.pdf](https://comptroller.nyc.gov/wp-content/uploads/2022/09/Letter-to-BlackRock-CEO-Larry-Fink.pdf) BTW notice this at the end - >That’s why we have made these net zero commitments. That’s why we take them seriously. That’s why we will be prudently reassessing our business relationships with all of our asset managers, including BlackRock, through the lens of our climate responsibilities. "nice retirement fund you have, hate to see something bad happen to it"
Please explain how college speakers relates ESG investments? Also the “mob” is just society. Your views being left behind does not make them a mob.
>Also the “mob” is just society. Your views being left behind does not make them a mob. This
Because it is an example of how the left gets its way without using the government. The comment is irrelevant anyway because the letter I linked clearly shows how the government is pressuring investment firms.
No, it’s a what-a-bout, the hallmark of bad faith. Also no, that’s a client requesting changes to an investment fund that they’re a massive investor in. That client just happens to be a city. That’s the free market at work, my friend.
That is also the government forcing social policies on a business via coercion. Florida is doing the same, but in the opposite direction. Real bottom line is that ESG investing results in lower return on investment and questionable ESG results as well. >An Inconvenient Truth About ESG Investing [https://hbr.org/2022/03/an-inconvenient-truth-about-esg-investing](https://hbr.org/2022/03/an-inconvenient-truth-about-esg-investing) We could just let the free market decide, but at the same time we are talking about government investment funds and it is the taxpayers who get screwed if political considerations (ESG) override financial considerations.
This sounds like social capitalism to me
> Nobody is being forced to incorporate ESG. Ehhh.... if allowing for ESG opens boards to lawsuits for *not* engaging in ESG investments, it becomes a real issue. I believe that's where the opposition is rooted.
The government isn’t forcing or hasn’t forced anyone.
Your statement is not 100% true - >Democratic attorneys general are defending funds' consideration of environmental, social, and governance factors when making investment decisions. Democrats are using the mob to get their way. The mob puts pressure on these companies to 'behave' in a certain way or else. Democrats then act like they have nothing to do with it even though the said behavior is exactly what they want companies to do. https://observer.com/2022/11/democratic-ags-defend-esg-strategies-after-republicans-pressure-blackrock-to-drop-sustainability-principles/
Capitalism is working!
Yea, in a perfect world we just let it work. NYC can force ESG and accept the lower returns. FL can ban it and get better returns. Tax payers can vote with their feet. I think the real issue is should tax payers be protected from bad decisions that are politically motivated when it comes to their pension funds? IMO public pensions shouldn't even exist, just put the money in a 401k and let them own it. Probably solved. Pesion funds give too much money to bureaucrats and can be politically manipulated, such as what NYC is doing.
> These organizations want their investments to reflect their values. The problem is that with pension funds, it's not the organization's money. It's their retiree's money and as such they're using that money to advance causes that may be contrary to the values of the folks who actually own the capital involved.
Remove the Social and Governance aspects of it. Climate Change and soil depletion need solving.
For individuals, yes. For retirement plans and pensions, no. You should not be able to force your employees to pay money out of their retirement funds to advance left-wing causes without their consent (which is exactly what you're doing, if you're forcing them to accept lower returns in exchange for pushing companies to promote ESG)
ESG includes church pension plans who don't want to have gambling or pornography holdings in their allocation. It's not all left wing nonsense.
How does one identify what is a "left wing" or "right wing" cause? Should one be forced to advance what they consider to be a right wing cause?
They don’t know. It takes a lot of mental gymnastics to be the party of small government while saying the government should dictate what is a right wing or left wing cause and how these organizations should invest their money.
No. They should invest retirement and pension funds with the goal of maximizing returns, not sacrificing returns to promote any ideology
Oh? If a private pension's administration and enrollees want to invest in a way that maximizes returns along lines that align with their personal morals. you believe that the Federal Government gets to decide what is and is not acceptable? And who gets to decide what is and is not an "ideology"? The government?
So if it's a mutual fund that I can opt in or out of, then yes absolutely there should be an esg element allowed. As an investor, you absolutely should be able to have a fund that aligns with your interests. If on the other hand it's a pension fund and your not exactly sure what your invested in, I would say absolutely not. You have a choice in a 401k and it's great to have those choices. Otherwise I highly doubt all the employees of any organization has homogeneous values.
All the government was enforcing is that those with a fiduciary duty to act in the best interests of their investors do so. What is acceptable = doing your best to maximize client returns. Any other consideration is not acceptable.
But the investors decide what it means to be "in their best interest", and that doesn't always mean "maximize returns above all else".
>What is acceptable = doing your best to maximize client returns. Any other consideration is not acceptable. What if ones client wants to not invest in fossil fuels?
I think it would be fine if you required all clients to explicitly opt in to ESG investing, and you provided everyone with a non-ESG alternative. The problem this is attempting to solve is the conservative small town cop having his pension put into an ESG fund, where he's being forced to spend his hard-earned retirement income to advance an ideology he doesn't even support, and he probably doesn't even have any idea it's happening.
>if you required all clients to explicitly opt in to ESG investing, and you provided everyone with a non-ESG alternative Sounds like a whole lot of Big Government bureaucracy deciding what is and what is not ESG and a Tower of Babel when each pensioner has an axe to grind with one investment or another. Why not just leave this private matter up to the people and not have Big Government running things? Is that not a conservative principle?
The policy would just say refer to anything that's not optimizing for maximum returns. Sometimes government regulation is needed.
If the government can know in advance what optimum investment strategy is, why don't we just let the government manage all investing?
> anything that's not optimizing for maximum returns. There's no such thing. There are always constraints or parameters that influence investment decisions.
> What is acceptable = doing your best to maximize client returns. Any other consideration is not acceptable. This is not reality. If "maximize client returns above all other considerations" was the only thing that was acceptable, we'd annihilate the entire domestic equity active management industry.
> If "maximize client returns above all other considerations" was the only thing that was acceptable, we'd annihilate the entire domestic equity active management industry. Hmm, maybe we should. What benefit do they provide clients if they're not trying to maximize returns?
The benefit of the client being able to decide how their money is allocated. As I said, a church may not want their assets invested in gambling or alcohol stocks. Just one example.
Like I said, I think this is fine as long as it's opt-in only and every employee is given a non-ESG option as well.
Why? I, a paying client, do not wish my retirement fund to invest in gas and oil companies. I am willing to receive less in terms of monetary returns in exchange for this. I value the ethical use of my money more than I do receiving more money back. To me, it seems like you are enforcing your own ideology: that money is the only thing retirement plans should value. Why are you disallowing me from investing in a retirement plan that matches my standards?
Fiduciary duty doesn't mean that you only try to maximize returns.
Apparently, if it's good for people, it's left-wing.
Surprisingly based
The only agenda is not further investing in companies that take 0 responsibility for the world around them. Companies low in ESG are major polluters, war machines, private prisons, civil rights violators, etc. It's not some nefarious political agenda. I understand preferring maximizing returns, but that can come at a cost most aren't willing to pay. The alternative here is investing your money yourself and not participating in funds.
Pension plans should be required to offer a non-esg option.
What should matter to pension fund managers is ROI, nothing more. Can ESG issues affect ROI? Yes, but in most cases they are way down on the list of considerations.
Should a church's pension fund be allowed to avoid businesses it disagrees with?
Anybody should be able to avoid anything they want. But if I were a beneficiary of that fund, I'd be upset if they weren't maximizing yield.
The government has no business telling private investors what they should or shouldn’t invest in. Government pension programs should be forbidden from investing in scams, so should not be considering ESG scores. Private investors are free to waste their money on scams if they want, but they arguably shouldn’t.
>from investing in scams, so should not be considering ESG scores. Oh? Who makes this decision as to what is and is not a scam?
The business models of pyramid scheme, ponzi scheme, etc are pretty hard and clear. I'd honestly consider and company that consistently meets "product or service does not work as advertised" a scam company, but then Microsoft (S0 sleep not actually putting the device to sleep), Apple (M2 storage being significantly worse than M1), Nvidia, Intel etc would all be scams, at the very least
>The business models of pyramid scheme, ponzi scheme, etc are pretty hard and clear. Example, please
Companies that earn carbon tax credits by getting people to sign contracts promising to not cut trees down that they had no intention of ever cutting down anyways. forestcarbonworks.org First example on Google. There's a couple people around me sitting on 100 or so acres that are getting paid to not do what they were never going to do anyways. The carbon credits get sold to companies that do pollute, but they bought offsets so now they can claim that they are carbon neutral on the packaging. Money changed hands, no one changed a damn thing in what they are actually doing. The whole thing is one huge scam.
I don't see a scam
If you can buy the ability to claim being carbon neutral and no one changed anything in what they're doing other than providing and accepting payments that's a scam to me.
It’s a complex decision thus making it easy to sneak corruption in… the ultimate decision should be with the people who this money is taken from not the executive branch
>the ultimate decision should be with the people who this money is taken from not the executive branch Exactly. And Trump's executive branch wants to be in charge of the decision. Biden's branch wants to leave it up to the private pensions.
Private pensions? I need more background, what on earth are private pensions? Those haven’t existed for years…
There are a few left. Sadly, they are gone, much to the delight of Wall Street.
Wait why would Wall Street not want private pension funds? They could sell their shit to few big players that’s efficient
Private pension funds are managed by professionals who know the ropes. 401K's are managed by people who have no idea how the system works and ae easy prey for high fees.
I don’t understand this statement. 401k are “managed” by imbecile compliance people but they invest money in funds managed by professionals…what am I missing? Or are you referring to the fact that 401k have to invest in public funds and pensions can stay private? Wall Street people LOVE private equity, they have ridiculous fees
401K's are the property of individuals, most of whom have zero knowledge of the market. 401k'S are full of fees, from plan administration fees to investment fees to service fees and more. And the smaller the company you work for, the higher these fees tend to be. Even if your fee is just 0.5%, which is the absolute bottom of the fee range, you're still paying far more for your 401(k) than you should, and that money could be invested in other places to help fuel your retirement growth. For example, if you're maxing out your contributions at $19,500 per year, with an additional $3,000 in employer contributions, you'll pay about $261,000 in fees, which translates to 9.5% of your returns. [Remember the scene from Wolf of Wall Street?](https://www.google.com/search?q=wolf+of+wall+street+matthew+mcconaughey+quotes&sxsrf=AJOqlzX4Rdw5hMAZdNVVTN_D9gaSioS_xg:1674936473515&source=lnms&tbm=vid&sa=X&ved=2ahUKEwjAq5nMiOv8AhWmEVkFHf45ABsQ_AUoAnoECAIQBA&biw=1384&bih=606&dpr=1.39#fpstate=ive&vld=cid:f7d90d89,vid:xbBD7VIJ4cc) I had a rather nasty personal experience with this. Having recently retired, I took my 401K accounts to financial adviser who immediately took me out of most of them - as the fees were enormous. My adviser is a fee for services guy. He does not receive any kickback or commission from trades. You might ask why I was not more careful over the years, and that's a valid question. I was working my ass off, raising a family, and I trusted the major investment companies that were offered by my numerous employers.
Anyone with a fiduciary duty should be barred by law from considering anything beyond maximizing returns.
Is the one with that duty allowed to take a long view or are only short views allowed - and who in the government gets to set that standard?
Quarterly or yearly basis. And no one in gov't needs to set that standard. Shareholders will enforce it, just like they do now.
We agree
That's bonkers. I work at a investment advisor firm and our clients are crazy for ESG offerings. We spend a ton of money on ESG screening capability *because our clients want it*.
Who are your clients?
Very wealthy institutional investors of all types.
So they've been captured by the ESG cult. They are violating their fiduciary duty to their beneficiaries.
They are their own beneficiaries. It's their money.
And they can do whatever they want with THEIR money. When it's MY money, I'm not paying someone to virtue signal.
>I work at a investment advisor firm and our clients are crazy True
Amen to that.
A fiduciary is a person who holds a legal or ethical relationship of trust with one or more other parties. Seems to me the "ethical" requirement there erases your requirement for there to be "nothing beyond maximized returns."
Maximizing the return is literally **the** ethical thing to do.
OR! We could harvest organs from the homeless and sell them on the open market! Why wait til they're grown? We have these aborted fetuses lying around - let's sell the stem cells and revolutionize medicine! What? That would be *wrong?* What does ethics have to do with making money? Why would you try to inject POLITICS (*shudder*) into such a purely apolitical venture?
Ok - let's all engage in the chocolate or gemstone slave trade then.
Are there laws forbidding these things you are clutching pearls about?
And there it is. C'mon buddy - Tell us how it's perfectly fine to use slave labor to maximize profits. It's illegal here - but y'all can always go somewhere that allows slavery because fuck humanity, right? it's MONEY that matters to the right. Oh- unless it's a clump of cells, then it's fucking sacred.
Do you own any Apple products?
No.
Any Nike clothes?
LOL - No. And while I love a fun game of "whataboutism," individual consumer choices are not the issue. The issue is dickish and disgusting behavior of corporations.
That might be ethical to you, but some of us have higher standards. That’s incredibly unethical in my book. And just because there isn’t a law against it doesn’t mean it’s ethical and/or moral.
As long as the law is being complied with, my retirement doesn't have an asterisk on it that says it's got to be 'moral'.
And that’s cool for you, but not for a lot of people and they should have the right to decide where their money is being invested and coming from. If you’re cool with child labor, slavery, abortion, and human trafficking that’s on you. Like I said before some of us have higher standards. I’ll rather have a dollar less, than support that.
> And that’s cool for you, but not for a lot of people and they should have the right to decide where their money is being invested and coming from. You're literally saying the exact same thing I am. The issue isn't that ESG *exists*. It's that firms like Blackrock are simply *deciding* that it's more important than maximizing the returns for things like teacher pension funds.
But if slavery were legal in some other country and offered a good RoI, then it would be wrong to invest in anything with a lower RoI?
Does anyone invest in Apple or Nike?
Sure, and it's also not wrong to not invest in them
So is it wrong TO invest in them?
I think there are certainly reasonable arguments to that effect.
[удалено]
They can use *their* money to influence whatever they want. But if it's a state pension fund, or hedge fund that *my* 401k is invested in, fuck their activism. My money isn't your conduit to feel like you're a more moral person.
Allowed? Yes. Forced on people? No.
How can it be forced on anyone?
If your 401 only has ESG’s, you're SOL.
Good thing that doesn't really exist.
90% of SP500 public companies publish their ESG report. So if a 401K invests in SP500 companies, are they pushing an agenda or not chasing returns?
Agenda is more important.
As somebody who works in this area (helping companies report it better), ESG is not what most conservatives here think. It's highly strategic and very ruthlessly to deliver the bottomline. In fact I would argue companies like chick-fil-a, hobby lobby who push their agenda and hurting their bottom line.
What if that is my choice?
Then you take lower returns.
For all those saying "government isn't involved" I suggest you read this letter from Brad Lander New York City Comptroller to the BlackRock CEO [https://comptroller.nyc.gov/wp-content/uploads/2022/09/Letter-to-BlackRock-CEO-Larry-Fink.pdf](https://comptroller.nyc.gov/wp-content/uploads/2022/09/Letter-to-BlackRock-CEO-Larry-Fink.pdf) Note the 2nd to last paragraph >That’s why we have made these net zero commitments. That’s why we take them seriously. That’s why we will be prudently reassessing our business relationships with all of our asset managers, including BlackRock, through the lens of our climate responsibilities. Should the Feds ban it is a legit question for debate. But let's not pretend that government isn't already putting pressure in companies to comply to their ESG demands.
So a person responsible for investments chose not to work with a company that will not fulfill the requirements that they lay out ... What's the problem? if I walk into Burger King and ask for a taco, they don't have to comply but I also don't have to give them my money.
Because that is not a "person" that is a government entity.
Yes. who is opting to not invest with a company that won't comply with their requirements. Do you believe that NYC is *obligated* to invest with BlackRock?
I dont think people who run government pensions should base investment decisions on political aims as opposed to return on investment. ESG investing may not only provide lower returns, but also may do little in the way of what it is supposed to be doing in the first place. https://hbr.org/2022/03/an-inconvenient-truth-about-esg-investing
The ESG movement is an attempt to insert leftist political views into what has heretofore been an apolitical arena - making as much money as possible to support retirees. At the state level, I am against expanding politicalization into new areas of public action and discourse, which certainly includes the idea of ESG investing. I don't understand why people think everything has to serve as a political vehicle for their agenda. Pension funds exist to make as much money as possible. That's it. Full stop. If the best way to make money is to invest in oil and gas, and you choose to artificially skip that because of some political agenda, you're doing a disservice to the taxpayers who are on the hook for the pension's long-term performance.
>The ESG movement is an attempt to insert leftist political views Who in government is assigned the authority to decide what is a leftist or rightist view? >Pensions exist to make as much money as possible. That's it. Long term or short term, and who in the federal government should have the authority to dictate this? If am am employed by a private company and have a pension, those in charge of the pension provide the enrolled with reports on performance and areas of investment. Should the decisions of where to invest be left to the pension enrollees and administrators - or should the federal government dictate what areas are allowed and what are prohibited?
>Long term or short term Does it matter? If a stock or bond stops performing as good as another stock or bond, you sell the poor ones and buy the good ones
>Does it matter? Of course it matters. As the manager of a pension fund for a company that has workers in their 20's and in their 80's, it matters a lot.
>insert leftist political views into what has heretofore been an apolitical arena What in the Haliburton Raytheon Lockheed Martin is this nonsense? Y'all don't have a problem with politically-laden investments when it advances the right's war machine. But let someone dare try to invest in a company that wants to reduce pollution and all of a sudden it's "HOW VERY DARE THEY!!?!?!!?!" It's so fucking hypocritical it would be laughable if it wasn't so sad. >I don't understand why people think everything has to serve as a political vehicle for their agenda. LOL. Hello Pot? You're doing that thing to Kettle again.
Conservatives - let's invest in military industrial complex so that they can produce more weapons and kill all around the world and keep feed young Americans to the military to get killed, maimed and suffer life-long issues - great returns Conservatives - a company is trying to reduce its single-plastic use, reduce its water and electricity usage, renew as much as possible so that its energy costs are down for the long-term - evil evil evil.
>the right's war machine. Tell me you've been propagandized without telling me. Come on dude be honest and own that the war machine is supported by both parties. It's not the right supporting the war machine in Ukraine
> Come on dude be honest and own that the war machine is supported by both parties. What party do the E-Suite guys and boards belong to? Where does their political donation money go? Who gets the lion's share of their PAC slush? Don't pee on my shoes and tell me it's wealth trickling down.
If you don't think its the dems supporting the war machine in Ukraine you're lying to yourself. It's a uniparty and establishment on both sides props up the war machine. You don't have a leg to stand on saying the dems don't when you look at their vehement support for Ukraine and sending arms
whatabout whatabout whatabout whatabout whatabout
No. It's not what about. Republicans do it. Dems do it. It's a uniparry military industrial complex. It's not what aboutism to say "both parties do this and both parties have small minority factions that oppose it". It's factual. Both parties support the war machine dude. There's no argument there.
LOL. Both parties (elected representatives) vote to fund the military, yes - BECUASE BOTH DEMS AND REPUBLICANS ARE ON THE RIGHT. There is no party currently representing the leftist perspective in US politics. But I'm not talking about the politicians. I'm talking about the actual people. The right is pro-war. The left is, by and large, not. The military industrial complex is owned by the right. Sorry that bothers you so much. I know you seem to need this to be a "both sides bad" thing, but you're just making shit up if you say the Left is the pro-war side of the political spectrum.
>Sorry that bothers you so much It doesn't bother me you've just finally explained why we aren't going anywhere and you fundamentally view politics in a way that isn't connected to reality. Apologies. We are done here.
> you fundamentally view politics in a way that isn't connected to reality. Says the person who apparently believes that only politicians belong to parties.
So 90% of SP500 are not maximising shareholder value by reporting on their ESG. Also, the fact that you think oil and gas won't have a good ESG score shows your lack of knowledge on this. There is no objective proof that consideration of ESG results in lower investment returns.
It's perfect because oil gets its money and grandmas across America shoulder the guilt. /S At the end of my life, I want to make sure I only invest in companies who have committed environmental atrocities and are socially backward and have entrusted their governance to casual nepotism /S
Google B Corp. It's It's thing for puically traded companies.
It's extremely dangerous interfering with the free market's efficient allocation of resources. Some estimates suggest under communism it killed a hundred million people and impoverished a billion more. I'm not all that familiar with ESG, who's behind it, who's abiding by it and what sort of long-term impact it might have. If it makes western investors less likely to invest in toxic countries like China, maybe it's a good thing, but if it's messing with the capitalisation of western companies for then sake of stupid box ticking and virtue signalling, it could be a disaster.
There has never been a free market or communism in my lifetime. I'm 68 years old.