“ESG is a highly subjective political score infiltrating all walks of life forcing progressive policies on everyday Americans resulting in higher prices at the pump and at the store.”

– Derek Kreifels, CEO, State Financial Officers Foundation

“ESG is a highly subjective political score infiltrating all walks of life forcing progressive policies on everyday Americans resulting in higher prices at the pump and at the store.”

– Derek Kreifels, CEO, State Financial Officers Foundation

What is ESG?

ESG stands for Environmental, Social, Governance and is used as an investment strategy to “encourage” organizations to “act responsibly.” ESG works by analyzing organizations across three criteria — their environmental footprint, their stance on social issues, and internal corporate governance.

However, political activists use ESG as a way to drive a progressive agenda and ideological allies in the business community help push this agenda through economic coercion and ignoring democratic processes.

Here is what ESG really means.

ENVIRONMENTAL

The progressive’s green agenda, driven by misguided strategies to combat climate change and reduce carbon emissions.

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SOCIAL

ESG’s social criteria force companies to adhere to political demands even when it has nothing to do with the company’s business.

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GOVERNANCE

This largely focuses on certain political contributions, the diversity and political activism of a company’s board, and the perception of disproportionate CEO pay as a measure of whether a company is a good financial investment.

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Does ESG Impact Me?

ESG impacts you even if you don’t actively invest.

As a hard-working American, you more than likely have a 401K, pension, or retirement plan being managed by a third-party investment firm. This investment firm could be investing your money in companies that do not share your political beliefs or have ESG business models that contradict your livelihood. These third-party investors are also taking these 401k and retirement plans and investing in companies overseas, like China, that do not adhere to the same standards as companies in America.

Even small business owners are impacted by ESG.

ESG is a completely subjective tool used to help investors determine the long-term sustainability of your company. This “tool” may force companies like yours to take positions on political issues that have nothing to do with your business and could determine whether or not you get a business loan.

ESG plays a major role in inflation.

ESG is impacting inflation. The environmental measures meant to bring about a transition to clean energy will raise the cost of gasoline, natural gas, and heating oil for decades to come. These same measures will also impact the food supply chain, adding burdensome costs to farmers and ranchers that will inevitably be passed to consumers.

ESG investing could damage the global competitiveness of the United States.

The investment firms that often force ESG-based metrics on companies in the United States do not apply those same metrics to foreign companies. For example, the investment firm BlackRock does not apply the same ESG standards to Chinese investments. But when talking about American companies, BlackRock CEO Larry Fink said: “Behaviors are going to have to change and this is one thing we are asking companies, you have to force behaviors and at BlackRock, we are forcing behaviors.” Meaning BlackRock expects American companies to follow ESG standards, but these standards do not apply to Chinese investments.

ESG investing could impact climate outcomes.

As climate activists in the United States are pushing for a green energy only country, the fossil fuel industry is shifting out of the United States. Allowing other countries and regimes to exploit environmental resources with little oversight and regulations will ultimately lead to worse environmental outcomes across the globe.

Take a deeper dive

Watch this in-depth video and share with your family and friends.

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What You Can Do

Demand the full financial analysis of any investment product including your 401k, pension, or retirement. If an investment advisor recommends an ESG investment over a non-ESG investment, request a full side-by-side analysis of the competing investments.

Demand full disclosure of the fee structures that an investment advisor gets from an ESG investment versus a non-ESG investment. If the fees are different, the investor should demand a full side-by-side analysis of the competing investment, including the difference in fees.

Demand investment advisors provide a comprehensive report detailing the metrics used by their advisors to determine if an investment meets ESG standards because ESG is subjective and varies from firm to firm.

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