The Daily Signal - INTERVIEW | White House Has 'Weaponized' ESG Movement, State Financial Officers Foundation CEO Says

Episode Date: May 17, 2023

The chief executive officer of the State Financial Officers Foundation says "we never really saw the [environmental, social, and governance] movement weaponized in a way that this White House and administration [have] weaponized it." "Certainly, fund managers like BlackRock, State Street, Vanguard have weaponized it, and so it's really just been in the last two years that we've seen them use funds, like pension retirement funds, in a way that leverages those dollars to push these social agendas," Derek Kreifels says of the so-called ESG movement. "And so, our simple premise and argument has been, if most Americans knew how their pension fund dollars were being invested, they would probably be appalled and shocked," Kreifels says. "And so, we launched a campaign called 'Our Money, Our Values.'" Kreifels adds:  It's available at our website OurMoneyOurValues.com, where we're trying to educate Main Street America on the dangers of ESG investing and what they can do specifically at the retail level to go to their neighborhood financial adviser and ask certain questions about the kind of fund managers that are managing their dollars and how to change that if there are companies that are managing dollars that they don't necessarily agree with their actions.Kreifels joins today's episode of "The Daily Signal Podcast" to further discuss environmental, social, and governance policies, some of the ways that the State Financial Officers Foundation is helping states navigate the ESG issues and what resources are available to them, and what the media are missing in its coverage of ESG.  Hosted on Acast. See acast.com/privacy for more information. Learn more about your ad choices. Visit megaphone.fm/adchoices

This is the Daily Signal podcast for Wednesday, May 17. I'm Samantha Sherris, and joining today's show is Derek Kreifles. Derek is the chief executive officer of the State Financial Officers Foundation, whose mission, according to its website, is to drive fiscally sound public policy by partnering with key stakeholders and educating Americans on the role of responsible financial management in a free market economy. Derek joined me during the Heritage Foundation's 15. anniversary last month to discuss environmental, social, and governance policies, also known as ESG,

some of the ways the State Financial Officers Foundation is helping states navigate the ESG issue and what resources are available to them and much more. We'll get to my conversation with Derek right after this. This is Mike Howell at the Heritage Foundation. I know how the left and the deep state operate because I've seen it from the inside. When I was working for the Trump administration, I learned how the left made our lives miserable and how they continued to think they can play by their own rules. Well, now we're taking all of these tricks and tactics that were deployed against the Trump administration

and turning them against the Biden regime. Through the work of the oversight project, we're exposing the left for what they are and embarrassing some actors responsible. We're using strategic foias and fearless litigation to force these bureaucrats to deliver documents they'd prefer to never see the light of day. But for our work to be successful, we need patriots like you to stand with us.

You can take action now. Visit heritage.org slash oversight to learn more. There's no time to waste. Derek Kreifles is joining us today. Derek is the CEO of the State Financial Officers Foundation and has been one of the leading voices opposing environmental, social, and governance or ESG policies. Thanks so much for joining us.

Yeah, thanks for having me. It's great to be here. Yes. Well, we are so happy to be interviewing you today on such an important topic. As I mentioned, the State Financial Officers Foundation has really been one of the most vocal organizations in the fight against ESG policies. But before we get any further, can you just remind our audience what ESG is and some of the concerns surrounding it? Absolutely. So ESG stands for environmental, social, and governance. It's a form of investing

that really sidesteps the democratic process. It is a group of activist investors, fund managers, and banks that are trying to push the leftist agenda, the social policy through and sidestep the democratic process. They know they can't get some of this legislation passed in Congress anymore, and they know that they can't get it through the courts. And so this is kind of a last-ditched effort to try to make sure that their vision of America, which is very different than ours, is achieved.

Yes, absolutely. And I wanted to talk specifically now about your foundation and some of the ways that you've been able to help states navigate, you know, these ESG issues and what resources are available to them. Absolutely. So we provide the tools. We're a 501c3 educational organization. So we get to provide tools to state governments, mainly state treasurer, state auditors, state controllers. We represent 28 states, 35 state officials from 28 states. And so a great group of freedom-loving free market men and women who are most cases are statewide elected officials. And over the last year and a half, we've been providing information and data so that they can make decisions that are best for their states. We've seen eight states divest over $5 billion from companies like BlackRock.

We've seen model policies pushed out and enacted that strengthen fiduciary responsibility in their states. We've seen model policies that enact an anti-discriminatory policy towards fund managers that might be boycotting the fossil fuel industry, for example. And so we are there just to provide the tools and the information, and then each of those state officials working with their governors, their AGs, can make the best decision for their state on what is the best solution. Over the last couple of years and even over the last couple of months, really, the momentum around ESG has been building and we've been having more conversations around it. When did you first notice the issue of ESG come to light? Do you

think it was gradual? Was it, you know, all at once? Where do you see it as? Yeah, we've known about ESG investing for several years. You know, we worked with several different financial. financial firms that we knew were that had ESG products available to their customers. But we never really saw the movement weaponized in a way that this White House and administration has weaponized it. Certainly fund managers like Black Rock, State Street, Vanguard have weaponized it. And so it's really just been in the last two years that we've seen them use funds like pension retirement funds. in a way that leverages those dollars to push these social agendas. And so our simple premise and argument has been,

if most Americans knew how their pension fund dollars were being invested, they would probably be appalled and shocked. And so we launched a campaign called Our Money, Our Values. It's available at our website, Our Money, Our Values.com, where we're trying to educate Main Street America on the dangers of ESG investing and what they can do specifically at the retail level to go to their, you know, neighborhood financial advisor and ask certain questions about the kind of fund managers that are managing their dollars and how to change that if there are companies that are

managing dollars that they don't necessarily agree with their actions. What are some of the type of questions that you could ask if you wanted to, you know, figure out whether or not your money is being invested this way or another? Yeah, so a few of them, you know, It would be, you know, is my money invested in a fund manager that is focused on DEI initiatives or environmental issues? Or are they enacting shareholder proposals during proxy season that would do any of those things? And so we kind of lay that out in a really simple downloadable PDF that doesn't cost anything, doesn't ask for anybody's personal information. They can go to that website, download it, and take it into their financial advisor.

That's great. I wanted to also ask about some, in your view, what you've been seeing as some of the most visible examples of ESG just in our daily lives. Yeah. So, you know, we can certainly see it on the global scale. It's been happening in Europe for, you know, several years before it really hit here in a strong way. You know, many people saw in the news a situation in Sri Lanka where, you know, the government broke down. There was mass chaos. Families didn't have fuel for their vehicles. Didn't have cooking fuel. You know, most Sri Lankan families, they were an island nation.

They cook their food on a small little gas stove, and they didn't have the fuel to be able to cook. All of that was a direct result of ESG policies put in place by the federal government there. We've also seen Dutch farmers protesting, driving their tractors to block interstates and to raise awareness of what the Dutch government's trying to do in the name of methane mitigation because cows, the waste from cows, you know, puts methane into the air. And so what a lot of these ESG protesters don't understand. And, you know, I'm based in the heartland. I'm in Kansas City. a lot of our treasures are plain states, flyover states, that we work with agriculture and farmers.

And you cannot mass produce food without some of these products, some of these chemicals and some of the things that they're fighting against. And so we are just, we're trying to, again, educate the agricultural community, the business community. We've seen different initiatives being introduced in shareholder proposals,

even on social issues like abortion rights, right, where some nefarious shareholders are introducing, you know, proposals that would require like T.J. Max, Walmart, Lowe's, to offer, you know, a three-day paid trip for, you know, an abortion to California. And so it's some of those kinds of things that we're seeing that are very real, that they're doing all under the ESG banner, under that social aspect of the ESG.

I want to talk a little bit of, about some of the state efforts. We've seen so far the governors of Utah, Kentucky, West Virginia, and Arkansas in 2023, signed legislation into law aimed at combating ESG policies and more than a dozen states have introduced or are considering taking action on similar bills. What is your message to these states

that have yet to pass legislation, you know, maybe are still working through it? And why is it, you know, so important in your view for them to do so? Well, I think the message message should be directed to the people of those states first to say if you want to retire when you feel like you should be able to, ESG could change the year of your age of retirement. It could make a difference between you retiring at age 65 or having to wait until you're 66

or 67 because, frankly, the returns aren't going to be there. When companies and institutional investors invest their dollars in a way that are focused on these social issues, they're not paying attention to the best rate of return for their investment. And so we've seen resistance in states from pension funds. A lot of state staff, you know, the deep state is just as deep and dark in the state governments as they are in the federal government. And the bureaucrats engaged in those different pension funds, they're pushing back. And they're, you know, they're buddies with some of the big fund managers that we've been

talking about. And so they're scared. They are trying to scare people by, you know, making huge fiscal notes where they're not willing to back up the math on those. And we've seen time after time even the same talking points being shared in multiple states. And so, you know, our state treasurer, state otters, they're not going to go away. They're not going to back down. They're here to bring some sanity to pension systems to fiduciary. law, which is really what we're talking about. That's the foundation of the argument, fiduciary

responsibility. Without that, you can't have good returns to provide for retirement for folks. I also wanted to get your thoughts on, if we look at the media coverage of ESG, what do you think is being missed in the reporting of ESG? That's a great question. You know, I think, I don't know if it's missing in the actual reporting of ESG, but I would say I've been surprised by the lack of ESG being on the forefront of some of our presidential candidates. As more and more come forward and announced their candidacy, this is the biggest issue affecting all levels of the American financial system. They're trying to change it, right? It's an introduction of a form of socialism, modeled after, you know, the CCP and everybody else.

So, you know, my encouragement, you know, is to follow some of the, you know, Mike Pence has been probably the most vocal person to bring attention to the ESG issue. I would just encourage, you know, Senator Scott and Nikki Haley and everybody else to pick up the mantle and start making sure that voters know how dangerous this is for our entire financial security. Derek, just before we go, I wanted to give you the opportunity to share any final thoughts. Well, you know, we're just really appreciative, you know, here this week celebrating Heritage's 50th anniversary. And I've often said in public that Heritage Foundation is the firewall, right, for the conservative movement. So we absolutely have to make sure that the Heritage Foundation is strong and out front.

They do so much to support organizations like SFOF and other organizations. organizations around the country, organizations that aren't in the swamp where, you know, we're, we're in the states. And so we just applaud everything that Dr. Roberts has been doing under his leadership. And we just want to do everything we can to support that. Well, thank you so much, Derek Kreifles of the State Financial Officers Foundation for joining us today. Thanks so much for having me. Really appreciate it. And that'll do it for today's episode. Thank you for listening to my interview with Derek Kreifles. Make sure you subscribe to The Daily Signal wherever you get your podcast and help us reach even more listeners by leaving a five-star rating and review. We read and appreciate

all of your feedback. Thanks again for listening. We hope you have a great Wednesday and we'll be back with you all this afternoon for top news. The Daily Signal podcast is brought to you by more than half a million members of the Heritage Foundation. Executive producers are Rob, Louie, and Kate Trinko. Producers are Virginia Alan and Samantha Asheras. Sound designed by Lauren Evans, Mark Geinney, and John Pop. To learn more, please visit DailySignal.com.