COHEN: States are waking up to grim reality behind ESG push by financial elites

The recent move by Louisiana and Missouri officials to liquidate their states’ investments in Wall Street heavyweight BlackRock reflects the growing recognition that the interests of financial elites are at odds with the aspirations of ordinary Americans.

Louisiana will withdraw its $794 million investment in BlackRock by the end of the year, and Missouri will follow by terminating its $300 million account with the company.

The issue is not only the financial security of government employee pension plans. The political agenda pursued by investment houses, such as BlackRock, State Street and Vanguard, is increasingly seen as a threat to the way of life of people far removed from the boardrooms of Wall Street. (RELATED: KREIFELS: Red States Warns Left’s Woke ESG Movement)

“Your blatant anti-fossil fuel policies would destroy Louisiana’s economy,” State Treasurer John Schroder wrote in an Oct. 5 letter to BlackRock CEO Larry Fink. “This divestment is necessary to protect Louisiana from actions and policies that would actively seek to cripple our fossil fuel sector.”

“In my view,” continued Schroder, “your support for ESG [Environment, Social, and Governance] investing is inconsistent with the best economic interests and values ​​of Louisiana. I cannot support an institution that would deprive our state of the benefits of its strongest assets. Simply put, we cannot participate in the paralysis of our own economy. »

“Quixotic Climate Agenda”

Weeks before Louisiana and Missouri announced they were ending their investments in BlackRock, Texas Attorney General Ken Paxton and 18 other state attorneys general sent their own letters to Fink. “The time has come for BlackRock to be clear on whether it truly values ​​our states’ most valuable stakeholders, and current and future retirees, or risks even greater losses than those risked by BlackRock’s chimerical climate program. “

While Louisiana and Missouri have opted out of BlackRock, other states considering sending a message to ESG funds could vote proxies against the management of the investment house. It would raise a public stench and draw attention to the many perils of ESG investing.

Environmental, social and governance (ESG) issues are not limited to BlackRock. Bloomberg (October 24) reports that the sector is coming under increased regulatory scrutiny and enforcement globally. Widespread suspicion that ESG asset managers sell products that promise more than they can deliver in terms of truly “sustainable” investing has tarnished the ESG name. “This has raised questions about funds’ ESG credentials and fueled concerns about widespread greenwashing,” Bloomberg noted.

At a deeper level, ESG asset managers, who might believe themselves to be at the forefront of a green energy transition that preserves the planet, seem to ignore what Mark P. Mills of the Manhattan Institute calls the “immutable energetic realities”. The digital age, with all its stylish gadgets, has fundamentally changed our relationship with energy.

“Historically, the energy costs of making a product roughly tracked the weight of the thing being produced,” Mills wrote in a recent Manhattan Institute report. “A refrigerator weighs about 200 times more than a hair dryer and it requires nearly 100 times more energy to manufacture. But it takes almost as much energy to make a smartphone as a refrigerator, even though the latter weighs 1,000 times more. The world produces nearly 10 times more smartphones per year than refrigerators. Thus, the global manufacture of smartphones now consumes 15% more energy, like the entire automotive industry, even though a car weighs 10,000 times more than a smartphone.

Equally immutable are the barriers that stand in the way of achieving “net zero” carbon emissions over the next two decades. For example, the transition from gasoline-powered vehicles to electric vehicles, where mineral extraction would replace crude oil extraction, would cause environmental degradation on a scale that cannot be captured on the spreadsheets of an ESG asset manager. Mills cites a seminal May 2021 report from the International Energy Agency (IEA) which finds that only partial decarbonization of global energy consumption “shows the need to increase the supply of minerals such as lithium, graphite, nickel and rare earths by 4300%, 2500%, 1900% and 700%, respectively.

Another kind of degradation will result from efforts to reduce atmospheric levels of carbon dioxide (CO2). Today’s gradual increase in CO2 levels has been very beneficial to plant life, including crops, and efforts to reduce CO2 in the air – whether by government decree or through strategies ESG investing – pose a threat to all forms of life. “Life begins to fade at half of current CO2 levels and dies almost completely at a quarter of current values,” notes William Happer, physics professor emeritus at Princeton University. “Geological history has demonstrated that life flourishes abundantly at double or quadruple today’s CO2 levels.”

For you but not for me

“ESG-style decarbonization is a fraud by which its proponents devise a system to constrain our lives, but not theirs,” says Scott Shepard, director of the Free Enterprise Project at the National Center for Public Policy Research.

“People who live in mansions and fly to Davos on private jets have nothing to do to push the carbon restrictions that will hamper living standards and future prospects for the rest of us,” he added.

Bonner Russell Cohen, Ph.D., is a senior fellow at the National Center for Public Policy Research.

The views and opinions expressed in this commentary are those of the author and do not reflect the official position of the Daily Caller News Foundation.

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