You know that the so-called “Masters of the Universe” at Wall Street’s big money managers have taken it upon themselves to use their influence over investors’ money to push their own political agenda on markets. In other words, you invest, and they win.
That agenda has been pursued via an investing philosophy known as Environmental, Social, and Governance (ESG) investing. A particular target for ESG investing has been oil and gas companies, which have found it very difficult to raise capital in the face of an investment industry that has become hostile to their efforts.
The capital restrictions have strangled oil and gas exploration and helped land the United States in the current surge of prices for energy products.
Now Arizona AG Mark Brnovich is suggesting that the efforts of ESG funds to strangle capital to certain markets may even be an anti-trust violation. He writes in the WSJ:
The biggest antitrust violation in history may be in plain sight. Wall Street banks and money managers are bragging about their coordinated efforts to choke off investment in energy. It’s nearly impossible to raise money to explore for oil and gas right now, and we may all be experiencing rising energy costs because of this market manipulation. Russian and Chinese aggression overseas also is exacerbating inflation.
Here’s what is happening: The biggest banks and money managers seek to implement a political agenda, such as compliance with the Paris Climate Accord. Then a group mobilizes: Climate Action 100+, for example, comprised of hundreds of big banks and money managers that together manage $60 trillion. The group uses its coordinated influence to compel companies to shut down coal and natural-gas plants. The activism can include pushing climate goals at shareholder meetings and voting against directors and proposals that don’t comport with the agenda, even if other decisions may benefit investors.
Firms report their plan to carry out these activities back to Climate Action 100+ headquarters. This helps ensure maximum coordinated effort toward the common goal of overhauling the energy industry. Money managers wield influence over these companies because they represent investors who are shareholders, often through their 401(k)s or pension plans. In other words, your retirement funds are likely helping facilitate these political campaigns to advance far-left policy goals, with consumers bearing the costs of increased energy prices.
Climate Action 100+ is one of many activist groups that operate like this, with a significant impact on critical investments in America’s energy infrastructure. Decarbonization of capital expenditures is one of their major goals. Investment in oil and gas exploration and production in 2021 was nearly 25% below 2019 levels. One private-equity CEO described trying to raise wide-scale capital for drilling oil as almost impossible.
An axiom of economics is that if you produce less, the cost will go up. The price of Brent crude hit $114 a barrel last week, an eight-year high, amid tensions over the Russian-Ukraine war. This hurts the pocketbook of all Americans, especially lower-wage workers, who spend a greater percentage of income on fuel.
While climate activists believe they know best, the U.S. can’t maintain its security while depending on foreign dictators and oligarchs to supply its energy. Current economic trends and international tensions heighten the need for domestic companies to maximize efficiency and productivity. Proper corporate governance is good not only for shareholders but for the stability of America and the world.
As attorney general of Arizona, I have a responsibility to protect consumers from artificial restrictions on production. That’s why I’ve launched an investigation into this potentially unlawful market manipulation. The resources of hard-working Arizonans should never be compromised in the name of spurious political activism, especially if that activism is a coordinated conspiracy that allocates markets in violation of the law.
Your Survival Guy has been raising the alarm bells over ESG investing for years:
- You Invest, They Win: ESG Is a Money Grab
- Who’s the REAL Winner from ESG Investing?
- BLACKROCK’S BILLIONS: Guess Where Those ESG Fees Are Going?
- ESG Ratings Are a Subjective Mirage
- It’s a Trap: High Fees Hamstring ESG Returns
- ESG Funds: You Invest, They Win—Here’s Why
- Wealth Management Pitfall: ESG, Part I
- Wealth Management Pitfall: ESG, Part II
- Calling Out Index Fund Activism
- YOU LOSE: When China Wins, America’s Elite Win
Action Line: Americans suffering at the pump feel just how badly ESG and anti-oil politicians have hurt their family budgets. Don’t allow money managers to use your investments in their index funds to push a political agenda you don’t agree with. Instead, focus on investing in individual securities with the help of a qualified fiduciary you can trust. If you need help building a portfolio with individual securities in mind, I would love to talk with you. If you would like to get to know me before we talk on the phone, there’s no better way than signing up for my free monthly Survive & Thrive letter. In the letter each month, I encourage and push you to achieve the personal and financial security goals you’ve set for your family. Click here to subscribe. We’ll get to know each other, and get serious about your future success.
E.J. Smith - Your Survival Guy
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