“In the end, the unavoidable conclusion is that the ESG movement has the potential to do substantial harm to both the financial system and society as a whole,” stated the report, which was written, according to a spokeswoman, by Peterson and a small group of lawyers in the AG’s office. “In the end, the unavoidable conclusion is that the ESG movement has the potential to do substantial harm to both the financial system and society as a whole,” stated the report.
More political, less legal
The Examiner asked two university law professors to review the report, and their opinions were that it appeared to be “political theater” and represented a “innovative” use of time by a state office whose primary responsibility is to represent the state in legal matters. Both professors agreed that the report represented a “innovative” use of time by the office.
One of the professors, James Tierney, who teaches investment law at the University of Nebraska College of Law, stated that there is a robust debate about how society should encourage certain investments, but that saying that only financial return should be considered is something that is anti-democratic.
“It’s really light on the law and it’s very big on, ‘whoa — worldwide conspiracy,'” said Tierney about the book. “It’s very light on the law.”
“There’s nothing in this report that gives me any cause to think that ESG is anything different than CRT (critical racial theory), a boogie man,” he said, or an artificial threat. “There’s nothing in this report that gives me any reason to think that ESG is anything different than CRT.”
Anthony Schutz, an additional professor at NU, stated that the report appeared to be a “new” usage of the Attorney General’s Office, despite the fact that it may possibly be related to the position that the office plays in protecting consumers.
In a nutshell, Schutz characterized it as “far from a complete and detailed investigation of the issues linked with investor activism.”
A lack of information regarding ESG
In an email response to questions, Peterson stated that the reason he decided to compile the report was because he felt there was “inadequate information” about “the origins of ESG, its long-term objective, (and) who is setting the criteria of ESG.” Peterson felt that there was “inadequate information” about “the origins of ESG, its long-term objective, and who is setting the criteria of ESG.”
“The best method to notify state policymakers and enforcers was to produce a report,” said Peterson, who will be leaving office in January after deciding against seeking a third term in office. Peterson will leave office because he will not be seeking a third term in office.
He mentioned that the Nebraska Investment Council, which is in charge of managing the state pension investments, received a presentation on environmental, social, and governance issues from BlackRock in July. BlackRock is the largest money manager in the world. At the time, we were told that it would be an informative presentation.
Republican officeholders have their sights set on BlackRock.
BlackRock is the main target of a campaign led by Republicans to remove assets from an increasing number of companies that take into account factors such as a company’s commitment to diversity and climate change when making investment decisions.
Several states, including West Virginia, Louisiana, and Arkansas, have divested themselves of millions of dollars’ worth of investments held by BlackRock, Goldman Sachs, and JPMorgan, in part because these financial institutions are cutting back on their holdings of coal and oil.
ESG has been prevented from being considered in the state of Florida under the directive of the state’s Republican governor, Ron DeSantis. According to the Financial Times, the state of Florida has made a commitment to withdraw anywhere from $1 billion to $2 billion in long-term securities and short-term assets from BlackRock.
‘Climate risk is investment risk’
BlackRock has defended its work by stating that “climate risk is investment risk” and that it is prudent to consider the dangers and opportunities presented by rising global temperatures and emerging technologies. BlackRock’s statement was made in reference to the fact that climate change poses a risk to investments.
However, a group of attorneys general from Red States, which includes Peterson, as well as an organization of Republican state treasurers, which is led by the Treasurer of Nebraska, John Murante, have condemned ESG for advancing a “woke left” and “left-wing agenda” rather than primarily focusing on investor returns.
In a news release that was issued in August, Peterson stated that it seemed as though anyone who purchased a BlackRock fund “is obligated to support ESG whether they like it or not.”
Those who decide how to invest other people’s money, such as in a state pension fund, are not allowed to pursue “a non-financial goal,” according to a report that was released this week by the Attorney General’s Office. Individual investors, on the other hand, are free to “invest their money as they please” with their own funds.
Risks ‘elites’ running things
According to the findings of the paper, investment managers and trustees have a responsibility to prioritize the generation of financial returns over the pursuit of other goals. It was suggested there was a possibility of antitrust violations when investing via ESG and that doing so placed investment power in the hands of “a tiny group of elites running global financial firms.”
Overall, the research by Peterson suggested that investment businesses were not well qualified to decide environment and social issues, and contended that this should be left to the discretion of the general public or its elected authorities.
However, interest in ESG investing is growing, and support for it as well.
ESG is becoming increasingly important to businesses.
According to a survey that was published in September by the Examiner, Deloitte predicts that by 2024, half of all professionally managed assets throughout the world would have investments in businesses that consider environmental, social, and governance concerns.
In the same report, the asset management Nuveen was mentioned for conducting a study in 2021 on responsible investment. According to the findings, seventy-five percent of workers strongly agreed or somewhat agreed that their employers who offer ESG and responsible investing options care about how their retirement plans turn out.
According to Tierney, a professor of law at NU, the report from the AG omitted an additional obligation of investment and trust managers, which was the “prudent investing” regulation. A decision made by the Supreme Court of Nebraska stated that fulfilling this duty does not include investing for the sole purpose of achieving the highest feasible rate of return.
According to Tierney, his cynical perspective is that the report was influenced by interest groups and business chiefs who are seeing capital moving away from their organizations and toward companies that embrace ESG. Tierney indicated that he believes this to be the case.
“They get irate when they see the price of their stock go down because some fund manager believes the investment is dirty,” Tierney said. “They get angry when they see their stock price go down.”