ESG (Environmental Social, and Governance)

EXCLUSIVE: Asset Managers Leveraged Red State Pension Funds To Back ‘Racial Equity,’ Climate Agenda, Report Finds

(US Government Work-Department of Energy/Flickr)

Several asset managers leveraged Idahoans pension funds to support a racial and climate agenda in 2022 and 2023, according to a report from conservative watchdog group American Accountability Foundation (AAF).

The Public Employee Retirement System of Idaho (PERSI) used six asset managers — Adelante Capital Management, AllianceBernstein, Brandes Investment Partners, Fiera Capital, Longview Partners and Mellon Capital Management — which handled more than $5 billion of the system’s stock portfolio, according to its investment report. These managers used Idahoans’ pension funds to support over 150 environmental, social and governance (ESG) shareholder resolutions on issues including race, gender, climate and politics, according to documents AAF obtained through a public records request and shared exclusively with the Daily Caller News Foundation.

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“The people of Idaho never voted for racial equity audits or strangling American energy, yet these ESG money managers are leveraging Idaho’s pension funds to push for these policies anyway,” AAF president Thomas Jones told the DCNF. “This is just another example of how ESG seeks to subvert the will of the American people and impose their radical agenda whether we like it or not.”

There were 153 examples of these asset managers voting in support of what the watchdog refers to as “woke” shareholder proposals using PERSI’s funds. They include “racial and gender pay gap reports, efforts to defund conservative candidates and pro-business trade associations, radical climate policy, and pro-abortion initiatives,” AAF said.

For instance, AllianceBernstein in 2023 used PERSI’s pension funds to vote in support of a “racial equity audit” proposal at Comcast, which shareholders did not approve. The resolution, introduced by the Service Employees International Union Master Trust, advocated for the “Board of Directors to oversee an independent racial equity audit analyzing Comcast’s adverse impacts on nonwhite stakeholders and communities of color and describing the steps, if any, Comcast plans to take to mitigate those impacts.”

AllianceBernstein in 2023 also voted to support a resolution at Wells Fargo for a “Report on Congruency of Political Spending,” to evaluate how the banking giant’s political contributions align with its corporate values of supporting ESG. The proposal, which shareholders also rejected, particularly takes issue with Wells Fargo backing the State Financial Officers Foundation (SFOF) and the Republican Attorneys General Association (RAGA) because they oppose ESG.

Mellon in 2022 leveraged PERSI’s pension funds to vote to back a resolution at Chevron for the oil giant to publish targets to reduce its greenhouse gas emissions to align with the Paris Climate Agreement and “limit global warming,” according to the proposal. The asset manager in the same year also used the system’s funds to vote in support of a resolution for AT&T to publish a report on its political expenditures and how they line up with the company’s values, including “carbon neutrality,” according to the resolution by As You Sow, a nonprofit that assigns ESG scores to companies.

Shareholders ultimately did not approve the resolutions at Comcast, Wells Fargo or Chevron.

But Mellon voted in support of a resolution at The Walt Disney Company in 2022 pushing for a “Pay Equity Report” at the company, which shareholders approved.

“Actively managing pay equity is associated with improved representation and diversity is linked to superior stock performance and return on equity,” it states. “Black employees represent 8 percent of Disney’s workforce, but only 5 percent of executive leadership. Women account for 51 percent of Disney’s workforce and 42 percent of executive leadership.”

PERSI managed retirement and benefit plans for over 65,000 public employees in Idaho as of 2017, according to the National Institute on Retirement Security.

“The PERSI fund (DB [defined benefit] plan) does not have any investments in funds with an ESG mandate,” a spokesperson for the state pension system told the DCNF. PERSI’s “investment managers are responsible for voting all proxies in a manner consistent with the best economic interest of the System for the exclusive benefit of the System,” according to the system’s investment policy statement.

However, critics argue that ESG investments fail to serve shareholders’ best fiduciary interests.

“It would be outrageous for PERSI asset managers to advance their own personal political agendas using the property of Idaho workers and families. Even to suggest doing so indicates sufficient grounds for termination. … Asset managers should have one agenda and that is to maximize the value of the assets under management subject to the normal guidelines of fiduciaries,” Idaho economist and former chief economist of the Office of Management and Budget J.D. Foster told the DCNF.

The S&P Global Clean Energy Index has plunged around 10% in 2024 while the S&P 500 Energy Index, which features many oil and gas firms, rose to over 7%.

Asset managers also used Nevadans’ pension funds to push similar proposals, the DCNF previously reported based on another public records request by AAF. Nevada Public Employee Retirement System enlists the services of asset managers like BlackRock, AllianceBernstein, Mellon and State Street Global Advisors, who collectively manage over $30 billion of the system’s stock portfolio.

Adelante, AllianceBernstein, Brandes, Fiera, Longview and Idaho state Treasurer Julie Ellsworth did not respond to the DCNF’s requests for comment.

Mellon declined to comment.