ESG's Are the Reason for Woke Corporate Interests (JRE)
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Yeah, these guys went after Exxon a few months ago. Well, technically it was a fund backed by the California pensions, but BlackRock and Vanguard got on board and had an unbeatable voting bloc.
Passive funds should not be allowed to vote. It’s fucking ridiculous. Between BR, Vanguard, State Street and Fidelity you basically have a voting bloc that can do whatever the fuck they want to big corporations.
The thing about ESG is it mashed together a bunch of unrelated shit and then tries to create some sort of score for a company. Companies have very little ability to materially move the needle on environmental shit (e.g. if you’re Coke you’re gonna use a fuckton of plastic and oil moving product around for the foreseeable future) so they are going really hard into the “social” component of ESG. For that to have an effect, they must continue to push a narrative about how awful it is for non-whites, gays, women, etc. and show how committed to social change they are. It’s a helluva lot of easier for a company with a massive environmental impact like Coke, Amazon, GM, The Southern Company or UPS to do that than change their business in a way that makes it environmentally friendly.
Interesting. I guess if they modified corporate law to eliminate fund-owned shares in calculating voting thresholds that might work. Problem with passing through voting rights is your guy with eight grand in an SPY fund would get at least 500 proxies per year.
I’d let active funds vote because there are alternatives to them and some of them actually want to be activist. But the passive funds, which own a massive amount of the aggregate market cap, are just supposed to be along for the ride.