The Daily Signal - Series Pt. 1: ESG Aims to 'Push Politics Into Business,' CEO Says

Episode Date: October 2, 2024

A leftist agenda known as ESG, or environmental, social, and governance, aims to "push politics into business," according to OJ Oleka, the new CEO of the State Financial Officers Foundation. State financial officers are under pressure from the Left to invest in businesses’ commitment to the ESG agenda at the risk of sacrificing their “fiduciary duty to get the best returns possible” on investments, says Oleka. He took the reins at the State Financial Officers Foundation Tuesday. As part of a three-part money and transparency series, Oleka joins “The Daily Signal Podcast” to pull the curtain back on what ESG is and how it might be affecting your local and state economy without your knowledge.  Utah Treasurer Marlo Oaks joins the show following the conversation with Oleka to explain how ESG policies and the Biden administration's climate agenda are hamstringing land usage in Utah.  Learn more about your ad choices. Visit megaphone.fm/adchoices

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This is the Daily Signal podcast for Wednesday, October 2nd. I'm Virginia Allen. How is the government using your money? This is a question that you as a taxpayer deserve an answer to. What we do know is that in red and blue states alike, there's been a huge push in recent years for ESG. ESG stands for environmental, social, and governance. ESG policies require businesses and the government to prioritize a social agenda over smart financial investment. And this affects the economic health of communities and entire states.

We're kicking off today a money and transparency series to dive into the topic and pull the curtain back on what ESG is and how it might be affecting your local and state economy without you even knowing it and even affecting the land in your state and how it's used. Over the next three days, we're going to be hearing from financial and state leaders from all over the U.S. that are working both in the nonprofit and governmental space. I had the opportunity recently to talk with these leaders at the State Financial Officers Foundation meeting in Alaska. And today, we're kicking off this three-day series with a double-header. First, newly announced CEO of the State Financial Officers Foundation, Dr. OJ. O'J. O'Leika

joins the show to explain the implications of the ESG agenda. He also shares the history of the state Financial Officers Foundation and why founder Derek Cryphels saw the need for such an organization. Then Utah State Treasurer Marlowe Oaks joins the show to explain how those ESG policies and the Biden administration's climate agenda is hamstringing land usage in the state of Utah. Stay tuned for both of these conversations after this. So what is going on with Ukraine? What is this deal with the border? How do you feel about school choice? These are the questions that come up to conservatives sitting at parties, at dinner, at family reunions. What do you say when these questions come up? I'm Mark Geine, the host of the podcast for you. Heritage Explains, brought to you by all of your friends here at the Heritage Foundation. Through the creative use of stories, the knowledge of our super passionate experts, we bring you the most important policy issues. issues of the day and break them down in a way that is understandable.

So check out Heritage Explains wherever you get your podcasts. It is my distinct honor and privilege to be joined today by Dr. OJ. O'leka. He is the newly announced head of SFOF and formerly served as the deputy treasurer for the state of Kentucky. Yes, ma'am. So when did you come at, are you born and raised in Kentucky? Is that right? Raised in Kentucky.

Michigan. Okay. But Kentucky's home for us now. I went to elementary, middle, and high school there, so it is home. My wife was born and raised there, and now we are in Frankfurt, Kentucky, with our two little girls. And have you always had a passion for finance? I've always had a passion for service, generally. Finance came later. Yes, finance came later, but really the journey started because of my family story. My parents came to this country from Nigeria with nothing, and they came in 1980. And they worked hard, played by the rules. My dad got a Ph.D. Michigan State University. My mother got her master's and became a labor and delivery nurse.

And they settled in Frankfurt. They bought a house and put three kids through college. And it was really while I was in college that I started to think, you know, what do I want to do? I had the chance to be student-vited president at the University of Louisville. And a lot of my colleagues were like, well, now you can go anywhere. You can do anything. What is it that you want to do? And I decided to go teach.

I taught in a low-income school in North City St. Louis because, and I thought it was important because of the educational opportunities that my parents got, that I got that kind of put us on this path to really live the American dream. I wanted to do what I kid for other kids to have the same opportunity. So that's what got me started in the interest and service. While I was teaching, I realized two things. One, any kid can learn. Doesn't matter your background where you're from, what you look like, any kid can learn, if you've got good teachers and leaders in your life who can push you in that direction. And the other thing was, if you can get the adults in those kids' lives, good quality jobs, good career paths, you could begin to change poverty practically

overnight. So then my interest was, how do you make that broader? How do you scale that? And to me, it became an idea of policy. We needed better public policy to make sure that kids could get a quality education, but also adults could get good jobs. So naturally, that meant improving the educational outcomes for students, but also creating economic opportunity for adults. So that's what got me interested in the fight for public service. And obviously, SFOF is perfect in that regard because you got to have money in the public sector because you don't want to take too many dollars from taxpayers. So you've got to be efficient.

And our members do an incredible job of making sure that their states can be as efficient as possible. treasurers, auditors, financial officers are the most trusted elected officials in their states for good reason. So we want to make sure that we've got an organization that continues to help them get their message out of fiscal responsibility of financial management in a way that benefits all their people. The State Financial Officers Foundation, all things considered, is a pretty new organization, this idea of bringing together state financial officers that all have similar values, similar mission. And talk a little bit about the history of the organization, if you would. Yeah, like you said, we are fairly new about a dozen years old. And the story is that there are a number of treasurers, about eight, and some staff that were just gathered in a room together. And they had that exact same epiphany that you did.

There's got to be an organization that can promote policy, that can promote the values of this country in a way that will benefit regular Americans. And so SFOF from there was born. And it really is an incredible story about how it has expanded from focusing explicitly on some of the things that a number of our members do. Unclaimed property, financial management generally, financial literacy. Now to taking on some additional bigger fights like against ESG to bring businesses back to neutral. That way there can be the best possible returns for pensioners. Again, making sure that states are spending money efficiently and why. and the rest they can send back to the people.

So it certainly has a wonderful foundation, and my interest, of course, is to build on that. Yeah. You mentioned ESG, environmental social governance. Explain what this is for those who might be unfamiliar. Well, effectively, ESG, again, those three letters, environmental, social government, governance, it is this idea, unfortunately, from folks on the left, that want to push politics into business. So you've got the E, the environmental, that's probably obvious to folks. It's the idea of pushing the climate agenda into business, regardless of what the business is actually designed to do.

Things like pledges to net zero. That's right. Things like pledges to net zero, retrofitting our entire way of life to fit a particular idea of how the world should be based on climate conditions and what people think that those things are. With social, again, it's the things that you might suspect. You think social politics, it's that same kind of idea. People want to push that into business. And then governance is the same way, this idea that you have to respond to a particular idea of what a specific group of people from the political left, the far left, want businesses to be.

It's like when the Business Roundtable says instead of responding to shareholders, you have to respond to stakeholders, which is an undefined group of people, which effectively means that now your business doesn't have to respond to the actual investors who are powering your company. You just respond to whoever has the loudest microphone that day. And the main reason why that is such an issue, this idea of ESG, is because it gets the business away from its actual business. Those of us who've worked in the private sector understand that the most important thing you can do for a client is deliver. If you're making a tractor, you've got to have a tractor that works. If you are doing a haircut, you got to have someone that's going to make somebody look good.

If your focus now is instead of whatever that actual business is, whatever that good is, that service is, there's no way to guarantee that you're doing it as efficiently as best as possible. So you're losing money for the people who are actually putting money into the company. And for people like pensioners, at the public level, it becomes a catastrophe. If you're an asset manager who is now focusing on ESG investments, you're no longer thinking about what the best possible return is. You're told you can't look at something like a coal company because coal is bad for the environment. Coal's going to do all these things. Whether or not you believe that is irrelevant. The point is you look at how coal has performed in the market in the last few years, it's up incredibly well.

So if you are a firm and your job is to bring in returns and you're investing in all this great, green stuff that's failing, as opposed to coal that's succeeding, you're not doing your fiduciary duty. You're doing something wrong, not only to your investors, but the pensioners who live on these resources. So that's the kind of thing that our members are focusing on, educating the public, educating legislators, and also educating members of the pension boards about what ESG is and why it's bad. Again, not from a political agenda, but just the idea that you've got a responsibility to make sure that you do your fiduciary duty to get the best returns possible. Bringing the goalpost back in other ways.

That's right. Back to neutral. That's it. Back to neutral. Yeah. Back to finances. Have you all faced in your work much resistance to this? Because it seems like many people would say, oh, yeah, that makes sense. Maybe we got a little sidetracked.

Let's come back to that position where money is first. Taxpayer dollars are being used wisely. But that might not be the case for everybody. Well, it's an interesting question that you asked. Because, again, if you explain it to regular people, they say, well, yeah, that makes sense. Yeah. You've got a job to do, do your job. But again, this is why it's a political thing, because you have folks who have specific particular interests.

Those are the ones that are pushing back. The large asset managers, the business CEOs and leaders who get in a room together, and they decide that they want to make their own kind of profit on the backs of these initiatives and on the backs of people, not from the actual business that they're putting forward, but because of their own pet projects, because of their own personal politics. And that's the problem. I don't care what your politics are. Yeah.

Our members, most of them are elected officials. They do well. They win elections. They win elections based on votes from Republicans, Democrats, independence, and everyone in between. So you're having your own politics is not the issue. It's when you inject them into a business because of whatever reason that you see fit.

That's the problem. So that's where the pushback comes from. Some of these larger organizations that have their own political vestibes. interest but again that's why SFOF is here we want to be the tip of the sphere as we have been and will continue to be to defend our members that are doing the right things for their constituents and doing the right things for the American people yeah Derek has obviously done such a phenomenal job in the

first over decade 12 years that SFOF has been operating and really bringing these stakeholders together what do you see for the future of the organization well first I want to take the time to thank Derek and Melanie for the work that they've done in SFOF as you may mentioned they were the founders. Derek is the first CEO. He's at an incredible job building a strong foundation, increasing our membership to 37 members across 28 states representing something like 120 million people. So it's incredible what they've been able to do. And what I want to do is build on that. Again, I want to listen to our members, hear exactly what their

issues are back home, and make sure that I'm taking their information, their input, and using that to lead the way forward. Obviously, we want to continue the fight against ESG. Unfortunately, that's not going away. We want to continue to be a policy-driven, member-driven organization, focusing on the things that matter to our members, but also continuing with the education of letting people know, here is what ESG is, and here's why it's bad, here are the things that our members are doing, and this is why they're good. In providing that real education to folks like yourself and your industry and in the media, but also the American people. to say you've got a really great source of elected officials, of financial officers that you can turn to on these key and critical financial questions.

So that's been our mission, focusing on economic freedom, the rule of law, federalism, holding our elected officials and government folks accountable, but also making sure that we're focusing on free speech and civil discourse in generally a free society. our founding principles and our values are the same as this country. And that's the kind of thing that we think is extremely important, that those are kept at the state level and also at the federal level. Yeah. For anyone that wants to follow your work, get involved with the work of the organization, how can they do that? They can go to sFOF.com.

And they can learn all about our members, the great work that they're doing on the ground. They can learn about what we're doing as an organization to fight ESG, to hold governments and businesses accountable and to keep fighting for the American people. So s-f-o-f.com. And if someone goes on your website and they see, my state treasurer isn't a part of the work you all are doing, is there anything they can do to maybe give them a little nudge?

Yes, they can. They can certainly ask their state treasurer, their comptroller, their auditor, whoever their financial officer is, and they can say, why aren't you a part of this organization that wants to protect my taxpayer dollars, promote economic freedom, in fiscal responsibility. Say, here's what they stand for.

You should stand for that too. And then, of course, if that elected official says that they don't, well, we all know what we can do in November in that instance. Dr. O'LICA, thank you for your time. And congratulations once again on heading this awesome organization. Thank you. I appreciate it. I hope you enjoyed that conversation with the CEO of the State Financial Officers Foundation,

Dr. OJ. Olegia. Now, let's go ahead and get to my conversation with the treasurer for the state of Utah. Marlow Oaks. Well, it is my distinct privilege to be sitting here, actually in the state of Alaska, but with the Utah State Treasurer Marlowe Oaks. Thank you so much for your time today. My pleasure. Well, you know, you all in the state of Utah, for, first off, you have gorgeous lands,

beautiful lands, beautiful state parks, just such a natural treasure of a state. There's a bit of a battle over land, though, in America and how it's used. And specifically, the Biden administration has been trying to remove land from productive use. Explain a little bit what's happening here. Yeah, so it's really rooted in something that came from the UN, kind of this part of agenda 2030, this 30 by 30, which is essentially an effort to take 30 percent of the land around the world. and put it off limits to human impact, essentially. In America, that agenda is known as America the Beautiful.

And so this administration, again, part of this whole-of-government approach, bringing in all of these different agencies across the federal government and trying to identify land that can be basically put off limits to human activity. That's really kind of the root of what's going on. what's going on. And so you're seeing efforts to take large areas of land, for example, in Montana. I think the Missouri River headwaters, it's kind of a fish and wildlife, over 5 million acres that have been identified.

Wow. Trying to set that aside to reduce, you know, human impact on that. So efforts to increase money in conservation easements, which really kind of changes the complexion of land and opens a nexus to the federal government for private property. So all of these land issues are really an effort, or at least they seem to tie in with this America, the beautiful agenda, 30 by 30. And how is that specifically affecting the people of Utah? So Utah is like a lot of other Western states where we have a significant amount of our land that's already owned by the federal government.

In Utah, we have the second largest amount of federal land that's managed by the federal government. Over 67% of our land of the entire state is federally owned. So that's, you know, Forest Service, National Parks, Bureau of Land Management, all of those, that kind of different kinds of land. But essentially, that kind of federal ownership puts a lot of pressure on land use, particularly when there is an effort to change kind of historical norms around land use. So Flippma, which is the Congressional Act from 1976, identified multiple use as sort of

of this doctrine in how we use federal land for different activities. So you could have the same piece of land that has mineral extraction, oil extraction, recreation, even grazing. And now they've created a rule that allows conservation leases. So instead of just getting a, or instead of being able to get different kinds of leases, if somebody can secure a conservation lease, then that can take precedence over the the other kinds of leases and prevent other activity, like the natural resource extraction and grazing and things that are really critical to economic activity, not just in rural

communities, but across the country. Prevent that activity from happening, really serious implications for that. And is that being done in the name of climate change? Absolutely. All this really is an effort to... manage climate change and man-made climate change. And so it's really to reduce that human impact on the land and try and drive down, I guess, carbon emissions and things that from grazing and mineral extraction, oil extraction,

trying to prevent that activity from happening because supposedly that will help alleviate climate change. Well, it seems like a classic example of government overreach. Exactly, and we're seeing government overreach in so many areas, right? I mean, you know, there's, I think one of the most dangerous has been the government working with big tech and, you know, silencing alternative viewpoints and it just kind of goes from there. But, you know, this effort, really the Biden administration has really implemented this whole of government approach. We're working with all these different agencies to try and drive this agenda to address climate change. Natural asset companies, another example, where the Securities and Exchange Commission,

they had a rule brought to them, or a request for a rule from the New York Stock Exchange. So it would have allowed money to be placed in a company that could then go out and acquire management rights over land to prevent economic activity from happening on that land. So very similar to what we were talking about with 30 by 30. So we're seeing a lot of different angles trying to address the same problem. Yeah. Well, it seems it very much so ties into this conversation that we've had on this podcast before, but related to ESG, this environmental, social governance agenda that now is really seeping

down into the public and directly affects state financial officers and the work that you all are trying to do to say, wait a second, we need to be ensuring that money, that taxpayer money is spent not because of a social agenda in a certain way, but just because it's the wisest way to spend it. Yeah, and so we, you know, we're often in a fiduciary role because we're overseeing investment portfolios, whether it's pension or kind of operating monies, tax money, that sort of thing. And so these kinds of issues definitely play into our area because we're talking about a fundamental change of our market-based system. When you have a market-based system, part of the beauty is that decisions are to be made on an economic basis.

And it's almost a blindfold, analogous to the legal system, that the decisions that you make as a financial officer to be based on risk and return and kind of these traditional economic metrics. And what's happened with ESG is introducing non-economic metrics that really are political in nature. And it threatens the economic system because it will change how decisions are made and how people. capital is allocated. And that's really the whole point behind ESG is to punish those who are considered not adopting the right agenda, punishing them with either not being allowed access to capital or making it more expensive

to access capital. So you see that with fossil fuel companies that have a challenge getting capital for projects, whether it's coal or oil or whomever, right? So it really threatens, ESU really is a threat to our free enterprise system because it attempts to change how capital is allocated. It politicizes that whole process and all of us should consider it a threat to our most basic economic freedoms.

Yeah. What are you doing in the state of Utah to ensure that the money that taxpayers are paying is actually going towards their benefit and not necessarily towards that political agenda? So a lot of it is just making decisions in the marketplace, so trying not to do business with people or entities that have signed on to the climate agenda and are pushing this agenda in their own practices and then educating people around this, making sure that proxy voting, in our pensions or other investment portfolios reflect the fiduciary duty that should be driving those decisions.

It really is a wake-up call to us to understand what our fiduciary duty is and to exercise that in a way that's appropriate and has been kind of traditional a law for for decades in the United States. Yeah. As you think about the future of your state of Utah, what are some of the key goals that you have in mind? Well, I think, you know, the main thing is there is an awareness of the federal government and the desire for pushing this agenda.

Federal overreach is being seen in so many different areas. And so it's really keeping an eye on those different potential areas that could be abused to try and drive an agenda at the expense of citizens of the state. Grazing is a big issue in Utah because over 70% of grazing takes place on federal land. Okay. So there's a very serious threat to agriculture. Yeah. And of course, you know, not all of these issues overlap with the treasurer, but I can at least

help to educate people and help them understand how it is impacting, you know, the marketplace and things that they might want to think about. Because we are seeing sort of these kinds of agendas coming at us from so many different angles. And so they touch on a lot of different areas of government. So really, I would say federal overreach in general, and it's hard to know exactly where the next thing is going to come from, right? But it's going to come. Absolutely. Well, and hopefully if we see a change in administration, that will change things dramatically.

And so I'm hopeful that we'll see a change there. And even picking up Republican seats in Congress, that would be very helpful. So, you know, we'll see. We'll see. Well, Treasurer Oaks, thank you somewhat for your time and thank you for the work that you're doing in Utah being willing to share it with us here today. My pleasure.

Thank you for having me. Thanks so much for joining us on today's show. Don't forget to hit that subscribe button so you never miss out on new shows from the DailySingle podcast, including the next two episodes in our transparency and money series. And if you would, take a minute to leave the Daily Settle Podcast a five-star rating and review. Have a great rest of your day. We'll see you right back here around 5 p.m. for Top News. The Daily Signal podcast is made possible because of listeners.

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