Are your retirement funds safe? No, I don’t mean market volatility and inflation caused by the Biden administration’s attack on American energy. I mean from the agendas of self-serving investment managers and radical climate activists who are placing partisan politics above fiduciary duty.
Cancel culture is spreading through our financial institutions like a plague, as banks and investment firms discriminate against industries they deem politically incorrect — from firearms manufacturers to fossil fuel producers. When it comes to the energy we all rely upon, the consequences of this brazenly anti-free market movement could have unsettling ripple effects throughout our economy — especially now that the Biden administration wants to require all businesses to disclose their “climate risk.”
When Wall Street and Washington are openly colluding to deny financial services to targeted businesses while forcing dollars into their own “green” investments instead, the free market is no longer truly free.
Fortunately, a new Texas law is fighting back, and nearly a dozen other states are following suit to protect our tax dollars and the energy resources we rely on.
Pension funds invest workers’ money to grow their retirement savings. Fund managers should make smart investments in order to maximize returns and ensure retirees have enough money to live on. But under a new trend known as Environmental, Social, and Governance investing, they are not making the smartest investments; they are aligning investments with the ideology of climate agitators. If that’s not bad enough, they will often vote on their clients’ behalf to adopt anti-energy resolutions or replace company board members with climate activists — even against the best interests of that company and industry. These investors are not good stewards for the hard-working men and women who are depending on their financial decisions.
For example, a small hedge fund owning just 0.2% of ExxonMobil’s shares recently forced a takeover and replaced three of the company’s board members with climate alarmists whose agendas will work directly against Exxon’s financial interests. In the last year, Exxon has already adopted plans to deliberately produce less oil and recently adopted a disastrous “Net Zero by 2050” policy to align with the anti-American Paris Agreement. The Paris Agreement is not law and has not been ratified by the U.S. Senate.
The elite class wants to force American businesses to march in lockstep on the climate change ideology — consequences to pensioners’ retirement be damned.
This trend is threatening the stewardship of our tax dollars. Texas is legendary for its commitment to limited government and its strong economy — the ninth largest in the world, surpassing even Russia and Canada. Low taxes are part of our DNA. When investment firms that promote the climate agenda are responsible for managing large portions of our public pensions, Texans are left questioning whether our tax dollars are being stewarded responsibly. Our teachers, peace officers, first responders, and public servants should never have a doubt that their pensions are safe.
That’s why Texas passed Senate Bill 13, the first legislation of its kind in the country. SB 13 prohibits financial institutions that boycott, divest from, or sanction the energy industry from doing business with the State of Texas. It is the ultimate free-market solution: businesses can run their organizations however they see fit — but if they engage in anti-energy investing practices that harm our state, we will not reward them with control of Texans’ tax dollars.
Climate activists condescendingly claim that divesting from fossil fuels is essential to staving off the climate apocalypse, even if it results in financial sacrifice. In 2008, Barack Obama boldly declared, “Under my plan… electricity rates would necessarily skyrocket.” Families struggling to make ends meet are just supposed to accept inflation.
Ironically, the climate movement’s pleas for divestment do not stand up to science.
According to climate data models, including the Environmental Protection Agency and the United Nations, even enacting each and every line of the Green New Deal today wouldn’t make a lick of difference on climate change. Eliminating all fossil fuels and all manmade carbon dioxide emissions would result in less than two-tenths of a degree temperature difference at the end of the century. Even the biggest and loudest campaigns to eliminate fossil fuels would have a microscopic impact — if any at all.
Ultimately, the best science suggests that our climate is likely to remain mild and manageable while technology and innovation continue to improve our resiliency, environmental protection, and overall well-being. Access to affordable, reliable energy provided by fossil fuels is essential to modern life, and nothing improves our resiliency to any challenge thrown our way than a prosperous and energy-rich society.
The only real effect of this energy discrimination movement would be more poverty, a higher cost of living for everyone, and — ironically — more pollution. Denying capital to American energy companies does not stop the use of fossil fuels. Despite decades of multibillion-dollar renewable subsidies, oil, natural gas, and coal are still the only significant sources of firm and reliable energy. Instead, the ESG agenda will just cede power to overseas producers like OPEC and Russia. It makes no sense to give power, influence, and money to countries that pollute with abandon and maintain poor human rights records.
Instead, we should continue to produce energy here in the United States, where we can do so more responsibly and efficiently than any other country — while also keeping prices low and strengthening our national security.
Since SB 13 was signed into law, nearly a dozen other states have filed similar legislation. Others, like West Virginia, have proactively withdrawn their funds from institutions like BlackRock that publicly endorse the climate agenda.
Together, the states can exercise their collective power to send a strong message that our tax dollars should be stewarded by fiduciaries, not climate alarmists.