(The Center Square) – A nonprofit group is calling out big banks and investment firms for ESG, or environmental, social and governance policies, that it says run counter to their fiduciary duties.
The Committee to Unleash Prosperity report, Politics Over Pensions, looks at investment fund managers and proxy voting behavior.
“Through a process known as proxy voting, these investment houses are supporting a leftist political agenda that’s goes by the acronym ‘ESG,’ which stands for ‘environment,’ ‘social,’ (also known as ‘social justice’) and ‘governance,’ ” according to the report.” It often encompasses other left-leaning priorities related to race, sex, and ethnicity. When these investment firms prioritize their political biases over company performance, their clients pay the price, in the form of lower shareholder returns that can easily add up to tens of thousands of dollars in losses per client.”
The Committee to Unleash Prosperity looked at “hundreds of major shareholder proposals, including what it said where the 50 most radical proposals related to left-wing activism. None of these proposals were supported by management at the targeted companies.”
The firms that received the best grades were Dimensional, Vanguard, T. Rowe Price and Fidelity. The firms that got the worst grades were Deutsche Bank, Swisscanto, Northern Trust, Storebrand Asset Management and BNP Paribas.
Deutsche Bank and Northern Trust did not respond to emails seeking comment on the report, its methodology or the bank’s report grade.
Storebrand Asset Management CEO Jan Erik Saugestad said the company invests in a sustainable manner because it is best for clients.
“We have no intention whatsoever to put politics ahead of our fiduciary duty,” he said in a statement. “Our role as investor carries a clear belief and a sole objective: We invest in a sustainable manner because we believe this will ensure the best long-term risk adjusted return for our clients. So, when it comes down to real life, it probably shouldn’t make much difference whether we call it ‘ESG,’ ‘sustainable investing’ or simply ‘investing.’ “
“The problem is not just at investment houses: In 2021, state pension funds supported 85% of leftist climate-oriented shareholder resolutions, as well as 91% of governance resolutions, and 93% of social-oriented resolutions,” according to the report. “This level of support, even by pension funds in Republican-leaning states, sharply exceeded that given by general shareholders and will be the subject of a future Committee to Unleash Prosperity report.”