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GOP State Officials Urge Asset Management Giant to Stop Its ‘Wholly Partisan’ Push for Green Initiatives

Financial officials send a letter to State Street Global Advisors urging the firm to offer investors options that do not incorporate environmental, social, and governance concerns. (Photo Illustration: Rafael Henrique/SOPA Images/LightRocket via Getty Images)

A group of financial officials from 16 states sent a letter to asset management giant State Street Global Advisors on Thursday urging the firm to offer investors options that do not incorporate environmental, social, and governance concerns, which push green initiatives.

State Street offers both an ESG and non-ESG fund, but the letter points out that current wider firm policies governed by shareholder proposals are all restricted to options that in some way incorporate ESG factors.

The request from state officials follows a move from State Street, along with JPMorgan Asset Management, in February to not renew its membership with environmental coalition Climate Action 100+, as the U.S. House continues to investigate the coalition to see if it violates antitrust law.

“Today’s letter from state financial officers across the country is both a continuation of the important fight against ESG and its pernicious influence, as well as an important new message to asset managers and banks alike,” Derek Kreifels, CEO of the State Financial Officers Foundation, told the Daily Caller News Foundation, adding:

Fiduciaries of public funds will not blithely accept token gestures and hollow assurances that financial institutions are retreating from their ESG activism. Those who persist in using the power of all assets under management and their proxy voting power to push a radical political agenda under the guise of ESG will be held to account by state financial officers.

In recent years, major companies, including financial institutions like State Street, have aimed to use ESG initiatives to push company policies that do not focus on maximizing profits and shareholder value, but rather advocate for action on climate change and the promotion of race-based equity policies.

To provide options in how shareholders’ assets are used to best align with personal views, State Street implemented the option to vote through proxy voting service Institutional Shareholder Services on different value-based proposal options, which would materially change how the company operates, according to the company.

State Street offers eight voting choices, including voting in tandem with the company’s board, sustainable policy, socially responsible investment policy, and Catholic faith-based policy, all of which the letter argues in some way incorporate ESG considerations.

“This use of non-ESG-denominated funds to push ESG issues makes those non-ESG fund denominations at very least inapt, if not a demonstration of the provision of material misinformation,” the letter reads. “The problem is compounded by the fact that with these same non-ESG-denominated funds State Street declines to support in its benchmark policy proposals or pressure companies to evaluate and respond to other, non-ESG risks.”

In its benchmark policy proposal, State Street advocates against requiring companies it is invested in consider the dangers and risks of green technology not being “technologically feasible” or affordable, according to the report. The policy also opposes companies taking into consideration the possibility that the models used for certain climate determinations are accurate.

Despite the voting options being marketed as a way to provide non-ESG alternatives, the letter argues that these options all in some way pressure businesses to adopt certain practices, such as accounting for climate risk as well as adopting diversity, equity, and inclusion policies, and are “wholly partisan,” according to the letter.

The state financial officers call for a new voting option that would be pro-fiduciary while also against ESG-aligned proposals, and for State Street to not punish board directors for going against ESG-related proposals.

“We further ask that State Street offer, in time for the upcoming 2024 season of annual general meetings, at least one voting choice option that endorses ‘pro-fiduciary’ proposals while opposing ESG-supporting proposals, and that does not punish boards or directors for being insufficiently ESG-motivated, but rather for failing to address the issues and concerns of pro-fiduciary proponents,” the letter reads.

House Judiciary Committee Chairman Jim Jordan, R-Ohio, issued a subpoena to State Street as well as other asset managers in December as part of an investigation into possible collusion between top financial firms and ESG initiatives. In 2022, Florida banned the state government from placing its funds with asset managers that utilize ESG considerations when managing funds.

State Street did not immediately respond to a request to comment from the Daily Caller News Foundation.

Originally published by the Daily Caller News Foundation

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