EXCLUSIVE: Investment Giants Leveraged Red State Universities’ Endowment Funds To Back Anti-Oil Agenda, Report Finds

From the Daily Caller News Foundation

Several asset managers leveraged two major Texas university systems’ endowment funds to advance anti-fossil fuel shareholder proposals in 2022 and 2023, according to a report from the conservative watchdog group American Accountability Foundation (AAF).

BlackRock-owned Aperio Group, Cantillon, former Vice President Al Gore-chaired Generation Investment Management, GQG Partners and JP Morgan Asset Management collectively manage approximately $4 billion for The University of Texas/Texas A&M Investment Management Company (UTIMCO) as of July, which handles the university systems’ endowments. Despite the company’s policy against it and Texas’ status as the leading crude oil and natural gas-producing state, UTIMCO’s asset managers backed over 150 shareholder resolutions under the environmental, social and governance(ESG) umbrella, including proposals that could undermine the oil and gas industry, according to documents AAF obtained through a public records request and shared exclusively with the Daily Caller News Foundation.

“Once again, woke ESG ideology has infected a public institution and hijacked its money for their own purposes. This is an outrageous betrayal of the public’s trust,” AAF president Thomas Jones told the DCNF. “[Republican Texas] Gov. Greg Abbott must take immediate action to end this nonsense. He must shake up the leadership at UT/A&M that let this happen and use his influence with UTIMCO to ensure that it never happens again.”

UTIMCO told the DCNF that the ESG and diversity, equity and inclusion (DEI)-related votes violate “a long-standing policy that prohibits using the endowments’ economic power to advance social or political agendas” and that a review found they consist of 0.3% out of around 45,000 proxy votes in recent years. The endowment manager added that it has since modified its guidelines after finding the violative votes and will impose them on all of its third-party investment managers before future proxy votes, and revoking voting authority for those that cannot follow them.

🚨EXCLUSIVE🚨Swing State’s Pension Funds Used By Wall Street Titans To Push ‘Racial Equity’, Climate Agenda, Report Finds from @jasonJournoDC https://t.co/LXx3y4WZPV

— Daily Caller (@DailyCaller) January 25, 2024

The company’s asset managers voted in favor of a total of 159 shareholder proposals between them that include “racial and gender pay gap reports, efforts to defund conservative candidates and pro-business trade associations, radical climate policy, targeting of gun purchasers, and proabortion initiatives,” according to the watchdog.

UTIMCO oversees the largest public endowment fund in the U.S., managing over $76 billion as of Aug. 31.

“UTIMCO’s mission is to ‘generate superior long-term investment returns to support The University of Texas and Texas A&M University Systems,’ yet these votes endorse political agendas that run contrary to the Systems’ best interests,” American Energy Institute CEO and former Republican Texas state Rep. Jason Isaac told the DCNF. “By supporting proposals that harm American energy producers, UTIMCO’s fund managers are violating their fiduciary responsibility.”

Texas leads the nation in crude oil and natural gas production and in 2023 was responsible for 43% of crude oil output, according to the U.S. Energy Information Administration. However, AAF found many examples of UTIMCO’s asset managers voting in favor of proposals aimed at reducing greenhouse gas emissions (GHG) emissions and other actions to mitigate so-called climate change, which the watchdog alleges comes at the expense of producing value for investors.

For instance, at ExxonMobil’s May 2023 yearly shareholder meeting, Aperio Group voted in support of a proposal to recalculate its GHG emissions to account for the assets it has sold. The resolution asserted that “the economic risks associated with climate change exist in the real world rather than on company balance sheets” and argues that the investments ExxonMobil sells may lower emissions on paper but that they fail to actually help achieve the goal of keeping global temperatures from rising by 1.5 degrees Celsius — which is an objective of the 2015 Paris Climate Agreement — potentially exposing the company and its stakeholders to what it calls “climate risk.”

Some of Aperio Group’s clients have access to customize their individual proxy voting policy, according to BlackRock. BlackRock itself voted against this ExxonMobil proposal on behalf of most of its clients.

AAF’s “report on UTIMCO’s investment practices should alarm every Texan who values our state’s proud oil and gas industry,” Texas Railroad Commissioner Wayne Christian told the DCNF. “It’s outrageous to see Texas university investments being used to support radical ESG agendas, decarbonization, and dangerous policies like Net Zero and the Paris Accord, which threaten our energy independence and economy. We must put an end to the woke political agendas that undermine the very foundation of Texas’ success and ensure our investments align with the values of hard-working Texans.”

Moreover, at defense contractor Raytheon Technologies’ yearly shareholder meeting in May 2023, J.P. Morgan Asset Management backed a proposal urging the company to publish a report on efforts to reduce GHG emissions in alignment with the Paris Climate Agreement.

“Raytheon Technologies creates significant carbon emissions from its value chain and is exposed to numerous climate-related risks,” it states. “Failing to respond to this changing environment may make Raytheon less competitive and have a negative effect on its cost of capital and shareholders’ financial returns.”

Isaac told the DCNF that UTIMCO’s “managers are discriminating against fossil fuel” companies through ESG investing based on the definition of “boycott” in Texas’ Senate Bill 13, which Abbot signed in 2021 and the former representative said he helped create.

The bill defines boycotting energy companies as refusing to engage or ending business with a company involved in fossil fuels “without an ordinary business purpose.” It also specifies actions aimed “to penalize, inflict economic harm on, or limit commercial relations with a company because the company” does business related to fossil fuels and fails to “pledge to meet environmental standards beyond applicable federal and state law.”

Isaac added that the asset managers “should be held accountable and placed on Texas’ list of “financial companies that boycott energy companies,” which mandates Texas public investment entities subject to SB 13 “avoid contracting with, and divest from, these companies unless they can demonstrate this would conflict with their fiduciary duties.”

The S&P Global Clean Energy Index, which includes companies that engage in energy production from renewable sources, has fallen about 7% so far in 2024, while the S&P 500 Energy Index, which features many oil and gas companies, has risen close to 3% in that same time.

Louisianans’ pension funds were similarly leveraged to push climate-related proposals within publicly traded companies, the DCNF reported in April, based on another public records request by AAF.

“UTIMCO’s asset managers’ apparent promotion of leftist objectives, including ESG, is extremely troubling and contrary to Texas law banning boycotts and discrimination against fossil fuels. The legislature must exercise oversight and hold UTIMCO accountable,” Republican Texas state Rep. Brian Harrison told the DCNF. “Governmental bodies, including their proxies, should not pursue objectives that harm the Texas economy and go against our values.”

Cantillon, GQG Partners, Texas A&M and Abbot’s office did not respond to the DCNF’s requests for comment. Aperio Group, Generation Investment Management, JP Morgan Asset Management and the University of Texas declined to comment.

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Backlash To Woke Corporations

Published on September 26, 2024

Todayville

Kid Rock blasts case of bud light

From the Daily Caller News Foundation

By Jeff Berkowitz

It was a warning shot that went unheeded, and now it is costing major corporations dearly. Following a last year’s Supreme Court decision on affirmative action in higher education, 13 Republican state attorneys general fired off a letter to Fortune 100 companies questioning their similar corporate policies. Now, many companies wish they had paid closer attention.

In the past few months, conservative activist Robby Starbuck’s social media campaign has swept through major corporations wreaking so much havoc that companies have begun folding to his demands before they are even targeted. The result? Damaged market capitalizations, tarnished reputations, and ire and frustration from consumers and activists on both the Left and Right. Welcome to the latest manifestation of our post-Bud Light era in which every company remains a Target.

Starbucks’ campaign and the attorneys general’s scrutiny that preceded it are part of the growing right-wing backlash to corporate America’s post-George Floyd embrace of Diversity, Equity, and Inclusion (DEI) practices. It is just one area in which companies are finding it hard to avoid political pressures in today’s stakeholder economy. Here’s what public affairs professionals need to know to help their companies navigate the increasingly heated culture wars of our tribal era.

The Summer DEI Turned Ugly

Leading this charge is conservative activist Robby Starbuck, whose campaigns against corporate DEI efforts have forced several major companies to quietly retreat. He led a full-blown digital assault against Harley-Davidson, leveraging his social media reach to accuse the company of straying from its core, blue-collar values. Harley-Davidson caved, dialing back its diversity programs. Next in line was John Deere, the agricultural giant known for embodying rural America. Starbuck’s campaign amassed millions of views, and the company retreated on its DEI initiatives. Seeing the wreckage, Molson Coors, Ford, and Lowe’s preemptively reduced their diversity efforts to avoid Starbuck’s crosshairs.

These aren’t isolated incidents. What started as a weak signal—the occasional conservative critique—has now turned into a full-fledged backlash. Tractor Supply, for instance, initially embraced DEI as part of a broader modernization strategy, but scaled back its efforts after being targeted by one of Starbuck’s campaigns. The retreat wasn’t driven by internal concerns over DEI’s effectiveness but by external pressures. Starbuck’s use of social media, dripping out just enough content over time to keep the pressure rising, has been a devastatingly effective strategy leaving companies from every sector fearing that staying the DEI course could cost them dearly.

Companies’ Complicated Embrace of DEI

Companies first leaned into DEI as a response to a profound cultural shift. The killing of George Floyd galvanized a movement for racial justice, and businesses, driven by both moral imperatives and strategic necessity, integrated DEI into their operations. Companies like Harley-Davidson, Nike, and John Deere were among the most visible in championing these efforts, aligning their brands with social progress and gaining public praise in the process.

What many of these organizations failed to foresee was the emergence of a powerful counter-narrative. On the surface, DEI seemed apolitical — focused on long-overdue fairness, inclusion, and representation. However, to conservative critics like Robby Starbuck, these initiatives represented a broader ideological shift that encroached on corporate neutrality. Companies that embraced DEI became vulnerable to accusations of wading too far into progressive politics, opening themselves to opposing pressure campaigns that can significantly damage their reputations and business models.

As we’ve pointed out before, DEI efforts are too often shaped and driven by a broader progressive agenda that itself is not always that inclusive. Plus, for many companies, the embrace of DEI has been more rhetoric than results, with little real progress towards stated goals of elevating under-represented populations in company ranks – particularly at higher levels. That’s left companies stuck between unsatisfied progressives and angry conservatives.

In Politics, Every Action Has An Unequal And Opposite Reaction

Starbuck’s playbook reveals a deeper truth about today’s political dynamics. DEI, which quickly became viewed as a corporate best practice, is now seen by many on the right as synonymous with “wokeness” — a label that carries significant risks in today’s polarized environment. What some companies initially saw as distant concerns have turned into high-pressure reputational crises and many prominent libertarian and conservative voices in the business world are now pushing companies to embrace an alternative: Merit, Excellence, and Intelligence (MEI).

This new reality brings significant legal implications, with lawsuits alleging reverse discrimination on the rise and politicians pushing legislative and enforcement actions. Florida Gov. Ron DeSantis spearheaded efforts to dismantle DEI with the “Stop WOKE Act” in 2022, which restricted how race and gender topics are taught in schools and workplaces. In 2023, he expanded these efforts by defunding DEI programs in higher education, labeling them as political indoctrination. His actions set a precedent for other Republican governors, with states like Texas, North Dakota, and North Carolina advancing similar policies.

In many ways, DEI has become a proxy for larger ideological battles, and companies are increasingly caught in the crossfire. As Starbuck’s campaigns continue to gain traction, businesses that once felt pressure to do more on a range of social issues from the left are now feeling the same sort or pressure from the right — and not all of them understand how they got here or what it means as our cultural warfare continues.

Navigating The Tribal Divide

As the stories of Harley-Davidson, John Deere, and Tractor Supply illustrate, the decision to step back from DEI initiatives isn’t always about rejecting diversity itself but about managing the complex realities of political and reputational risk. Even firms like Nike, a well-known and ardent supporter of progressive social causes, has tempered its public messaging in recent months.

The DEI blowback we’re witnessing today is a reflection of deeper societal divisions, ones that are now playing out across corporate America. Public affairs professionals need to understand this battle isn’t just about DEI—it’s about the role activists and politicians on both sides of the divide expect businesses to play in shaping cultural narratives.

In this new era, companies must navigate an ever-shifting landscape where political and cultural allegiances can determine success or failure. For those in government relations and public affairs, staying attuned to these tribal dynamics will be critical in helping organizations anticipate and manage the next wave of blowback—or hopefully avoid it all together.

Jeff Berkowitz is the founder and CEO of Delve, a competitive intelligence and risk advisory firm.

Business

Time to finally privatize Canada Post

Published on September 26, 2024

Todayville

From the Fraser Institute

By Vincent Geloso

In the 10 years following privatization, prices for stamps and other postal services fell by 11 per cent in Austria, 15 per cent in the Netherlands and 17 per cent in Germany (adjusted for inflation). All these countries now have lower postal prices than the European average.

Canada Post wants to increase the price of a stamp by 25 cents to $1.24 to keep up with inflation and rising costs. But Canada Post has often relied on this reasoning for previous price increases since it stopped being a government department and became a Crown corporation in 1981. Since then, it’s jacked up prices every time it’s had “financial difficulties.”

The source of these difficulties has changed over time. It used to be the modernization of infrastructure, then the problems of pensions, then the rise of the Internet. The answer is, however, always the same. Prices must increase. Indeed, since 1981 stamp prices have increased 98 per cent (after adjusting for inflation). In other words, the price for stamps have increased far beyond the rate of inflation.

Why does Canada Post keep getting away with this?

Because it has a monopoly over most of the letter market in Canada. And while it competes with private companies (UPS, for example) in the parcel market, Canada Post can borrow money at much lower costs than its rivals because it is a Crown corporation ultimately backed by taxpayers. That’s a huge advantage.

Normally, a company facing losses and declining demand would innovate and reduce costs. Otherwise, it would likely be bought out by competitors or go bankrupt. However, due to its monopoly over most of the letter market, Canada Post lacks this incentive. In can simply pass the burden onto consumers by raising prices, which is exactly what it has done since the 1980s. And as a Crown corporation, it cannot be purchased by another company without express approval from Ottawa.

So, what’s the solution?

In Europe, due to a directive from the European Commission, all letters regardless of weight have been open to competition since 2013. The directive does not mandate the privatization of state-owned postal companies; it simply ends postal monopolies. Combined with local liberalization efforts before 2013, this directive has forced state-owned postal service providers to better control costs because they cannot turn to taxpayers (for subsidies) or consumers (by raising prices) to bail them out.

Some countries such as the Netherlands, Austria and Germany went further and privatized their postal operators. With privatization, the discipline of competition is combined with the discipline imposed by shareholders seeking to maximize profits and increase sales.

In the 10 years following privatization, prices for stamps and other postal services fell by 11 per cent in Austria, 15 per cent in the Netherlands and 17 per cent in Germany (adjusted for inflation). All these countries now have lower postal prices than the European average.

Predictably, postal service providers in these countries found new methods of organizing their activities, tying multiple services together to generate economies of scale, and moved fast in adopting new information and logistical technologies. Due to the incentives of competition, providers focused their efforts on controlling costs—a focus Canada Post will never achieve as long as it’s a Crown corporation with a monopoly.

If approved by federal regulators, Canada Post’s latest price increase would go into effect in January. Policymakers in Ottawa should finally put postal liberalization and privatization on the table. Otherwise, it’s only a matter of time before a new problem emerges, which Canada Post will use to justify another price increase.