Nineteen ‘freedom-loving states’ have joined together to form an alliance to push back on Joe Biden’s ESG agenda. Florida Governor Ron DeSantis organized the alliance of red-state governors who pledge to use pension funds in their states to force corporations to maximize shareholder value, not push a woke ideology.
Under President Joe Biden, the US Department of Labor put in place a rule that would allow managers of retirement plans to weigh climate change and other environmental, social, and governance (ESG) issues in their investment decisions. The move undid an effort under then-President Donald Trump to block such investments. The rule has become a focus in a fight over what proponents call sustainable investing and opponents to call “woke capitalism.” With the help of conservative Democratic senators, Republicans in Congress passed a measure to repeal the rule, but the White House said Biden would keep the rule in place by vetoing the congressional measure.
The governors released a joint statement Thursday after Biden said he would oppose Congress’ efforts to keep politics out of retirement funds. Joe Biden is all about politics in everything. Besides Florida, the other states in the alliance are Alabama, Alaska, Arkansas, Georgia, Idaho, Iowa, Mississippi, Missouri, Montana, Nebraska, New Hampshire, North Dakota, Oklahoma, South Dakota, Tennessee, Vermont, West Virginia, and Wyoming.
Is it just more of Joe Biden being determined to undo everything that Donald Trump did as president? Maybe. But it is likely just more Joe Biden being Joe Biden. The once mostly moderate Democrat now has gone completely to the far left side of the aisle. Most people get a little more conservative as they age but not Joe. He is all about everything that sounds progressive and includes the words ‘environment’ and ‘social’ as in social change. Fortunately for the American people, there are still a few Democrats who have not lost their minds and they sided with Republicans to repeal the rule. In other words, conservatives came together to nix woke investing. Unfortunately, Biden will veto that and keep the rule in place.
Never mind the importance of investment decisions in retirement funds. Employees sign up for their company’s retirement plan benefits and depend on them to provide dividends that will grow their retirement accounts. They are building their nest eggs for the future when they no longer are in the workforce. All investing comes with a certain amount of risk but woke companies that focus on social justice issues over common sense frequently go broke. That’s not good for investors, to state the obvious.
The Labor Department proposed a new rule that would change the Employee Retirement Income Security Act of 1974 (ERISA) in 2020 to require those overseeing pension and 401(k) plans to always put economic interests ahead of what it called “non-pecuniary” goals. That was during the Trump administration. It was meant to protect the people invested in retirement funds and ensure that their accounts grew. Eugene Scalia, a Trump appointee, said this move was to provide clear regulatory guideposts for plan fiduciaries “in light of recent trends” in ESG investing. (A fiduciary is someone with a legal responsibility to make financial decisions in the best interest of beneficiaries.) Scalia pointed out that “private employer-sponsored retirement plans aren’t vehicles for furthering social goals or policy objectives that aren’t in the financial interest of the plan.” Under the Biden administration, the Department of Labor rule gives options for workers and retirees to ensure fund managers consider climate risks when making investments. They also provide options to invest in sustainable businesses. Yada yada yada. Progressives never miss an opportunity to virtue signal, even in retirement accounts.
Many who signed on with DeSantis are past Trump stalwarts, including Arkansas Gov. Sarah Huckabee Sanders, who served as the former president’s White House press secretary but declined to publicly endorse his 2024 bid when asked in a phone call, according to reports.
In an op-ed, DeSantis explained that ESG is usually only employed for a few reasons – if those working at the top of corporations want to push their agenda or one that would benefit them, or are giving into the will of workers that want their employer to reflect their values.
In his new book The Courage to Be Free: Florida’s Blueprint for America’s Revival, the potential 2024 presidential candidate called for ‘crippling the ESG movement.’
Desantis is seen as one of the biggest fighters against ESG considering his ‘war with Disney.’
DeSantis said that ESG activism wasn’t going to fly in Florida. He fearlessly took on Disney. His motto is that “Florida is where woke goes to die.” The important thing with DeSantis is that he does what he says he’s going to do. He wins. And, he leads as he did in forming this alliance with other red states to bring common sense to retirement fund investing to protect employees who are depending on those retirement accounts.
The press release from DeSantis states that ESG is destabilizing the American economy. For example, many people point to the focus on woke politics at SVB as a reason for the bank’s collapse. The bank wasn’t doing banking, it was virtue signaling on social issues. What better example of go woke, go broke? Investors don’t concentrate on pronouns. They want results from investments.
‘President Biden threatened to veto this measure, which puts the pensions of thousands of hardworking Americans at risk to the radical environmental, social, and corporate governance (ESG) movement, rather than prioritizing investment decisions on the highest rate of return,’ the joint statement notes.
They added: ‘Retirees, already suffering from the reckless fiscal policies of the Biden Administration, will continue to experience diminished returns on the investment of their hard-earned money while the corporate elite continue to use their economic power to impose policies on the country that they could not achieve at the ballot box.’
Exactly. People on fixed incomes are doing enough belt-tightening in Biden’s economy. Seniors and retirees have it the toughest with making ends meet each month. It would be a little bit of peace of mind to know that sensible people are making decisions with an eye to profits, not social justice causes.