Pence Rips ESG Investments By Injecting Left Politics Into Business

Former Vice President Mike Pence criticized investor-activist campaigns that force companies like Exxon Mobil Corp. to follow socially conscious investment principles, setting leftist goals higher than corporate and employee interests. said to evaluate.

Vice President Pence, a potential Republican presidential nominee for 2024, delivered an energy policy speech in Houston on Tuesday, urging states like Texas to “inhibit” the push for employee pension funds to use environmental, social and governance principles in their investments.

The former vice president last year was an activist investor, Engine No. 5, backed by companies including BlackRock Inc. Citing 1, they launched a successful proxy campaign to replace three directors on Exxon’s board of directors. “These three are now working from within to undermine the company,” Pence said.

ESG investing (using environmental, social and governance factors in decision-making) has become one of the most popular sectors in finance in recent years, adding up to $40 trillion in assets in global markets, according to Bloomberg Intelligence estimates. .

But the strategy has provoked outrage among lawmakers in some states. Utah and West Virginia officials have pressured S&P Global Ratings to scrap its system of scoring states based on ESG-related credentials. In Texas, officials are asking financial companies to: Climate Policy DisclosureIncluding whether it restricts business with energy companies.

Vice President Pence said finance is always meant to stimulate investment and promote economic growth that benefits America as a whole. But President Biden and government regulators are “weaponizing the financial system in the opposite direction,” including “the volatile new ESG regulations that allow left-wing radicals to destroy American energy producers from within.”

Similar accusations have been circulating in Texas for some time, but Vice President Pence’s comments are the most offensive. The growth of ESG investing has made some of Wall Street’s biggest investors even more active in proxy campaigns.

However, the notion that such campaigns harm businesses has not been proven, especially for Exxon. Engine No. 1’s success lies in convincing its major shareholders that an improved climate strategy will also benefit the oil giants’ financial returns.

After the vote, Chairman and Chief Executive Darren Woods quickly reconciled with three new directors and announced a series of green measures, including eliminating emissions from operations and reducing spending on fossil fuels by the mid-20th century. Fueled by high oil prices, Exxon’s share price has risen 36% last year.

Republicans and powerful industry groups, including the Chamber of Commerce, opposed increased activity by the financial watchdog group on ESG issues during the Biden administration, despite the White House calling for increased oil and gas production to lower fuel prices.

Biden also made fighting climate change central to his presidency. order Regulators can develop more robust initiatives to measure and mitigate the risks of climate change to the financial system.

One of the Securities and Exchange Commission’s proposals is to require companies to disclose the risks a global warming poses to their operations when filing regulatory statements.

Bloomberg authors Saijel Kishan and Jennifer A. Dlouhy contributed to this report.

Leave a Comment