New proxy voting database shows asset managers’ESG agenda abuses taxpayer funds
1792 Exchange releases bombshell second database highlighting egregious abuse of proxy voting, exposes the manipulation of pensions for first responders and other state employees to advance ideological goals
Press Release: JDA Worldwide for 1792 Exchange
September 14, 2023
DAYTON, OH — This week, 1792 Exchange is launching its second Spotlight database analyzing proxy voting records of all 50 states’ pension funds, ranking the 50 states in order of the least to most pro-ESG votes in 2022. This first-of-its-kind database includes a behind-the-scenes look at how asset managers, proxy advisors, state legislatures, state treasurers, governors, pension boards, and pension staff collectively responsible for public retirement dollars enable and promote divisive and harmful ESG agendas with taxpayer dollars.
1792 Exchange found that only 19 states’ pension funds publicly disclose their proxy voting records on the stocks they own directly. States invest a larger percentage of their funds in index funds and ETFs, and most states delegate these proxy votes to asset managers and proxy advisors. Since most of these votes are not disclosed, the 1792 Exchange compiled data from the pension funds’ asset managers to extrapolate every state’s ESG voting average on controversial resolutions across 18 categories comprising over 800 shareholder resolutions.
1792 Exchange’s “Spotlight Report: Proxy Voting” exposes how flawed state laws and regulations plus lack of oversight and transparency allow the retirement savings of first responders, teachers, and other public employees to be used to advance political agendas instead of maximizing investment returns. This data demonstrates many states’ negligent lack of oversight of proxy voting and egregious misuse of hard-working pensioners’ funds to support political agendas, distract companies from shareholder profits, and even undermine critical employers in their own state.
Examples abound in both red and blue states. Some red state pension funds are more pro-ESG than California, Oregon and Washington. The Employees Retirement System of Texas voted for a shareholder proposal at Bank of America to “Adopt a fossil fuel lending policy consistent with IEA’s Net Zero 2050 Scenario” that, if passed, would have restricted lending to the oil and gas industry that fuels their state’s economy and that Bank of America’s own management recommended against.
A New York pension fund voted against a shareholder resolution that would have required General Motors to disclose the use of child labor in producing electric vehicles. Prioritizing a pro-EV agenda over basic human rights for children demonstrates complete moral incoherence. Also troubling is the diversion of the liberal agenda from corporations’ duty to their shareholders.
This resolution and many of the tens of thousands of votes detailed in the 1792 Exchange Proxy Voting database distract businesses from a shareholder-centered “get back to business” mentality.
This Spotlight Report also reveals the proxy voting records of over 100 of the nation’s largest asset managers like BlackRock, State Street, and Vanguard across hundreds of ESG-related resolutions, working under the assumption that asset managers or proxy advisors often vote consistently for the shares they represent, regardless of whether the shares are owned by state pensions with different interests.
In the aggregate, the report highlights divisive shareholder resolutions from 2022 and 2023, demonstrating that shareholder activism continues and that many asset managers support progressive causes with their customers’ money. Alarmingly, most Americans do not know that their retirement dollars are being leveraged to promote controversial agendas, while diminishing their return on investment and harming the economy. But now, states that don’t control voting cannot claim ignorance.
“The lack of transparency and the reckless abdication of authority to politically motivated asset managers should be setting off alarm bells for state legislators, state officials, and taxpayers. Many hard-working Americans and retirees who rely on state employee pensions are unaware their state allows their proxy votes to advance political agendas that may harm their investment returns,” said 1792 Exchange President Paul Fitzpatrick.
“Lax state laws or lack of enforcement of existing state laws allow asset managers across the country to use the retirement savings of state pension beneficiaries to support ideological shareholder proposals that may decrease shareholder value. Those overseeing the funds should not be allowed to place politics over our state workers’ retirement security. Last year, four states passed a form of anti-ESG legislation. This year, despite heavy opposition from state banking associations carrying the water for national financial giants, eleven states passed laws regarding control of their investments and proxy votes. Some new laws are strong, some weak – but it’s a start. As the laboratories of our Republic, we look forward to seeing additional state legislatures vote in the interests of their citizens and their state industries. Our educational tool, “Spotlight Report: Proxy Voting” allows for the people, state legislators, those who appoint pension board members, and even Members of Congress, to learn more about how state pension funds vote on ideological proposals.
“However, this is not a blue-state, red-state issue. Big woke asset managers should not be allowed to use state and retiree pension funds to influence issues that should be decided at the ballot box. The bottom line is that US citizens shouldn’t lose retirement money so CEOs can look good at Davos.”
The “Spotlight Report: Proxy Voting” is the second Spotlight Report the 1792 Exchange launched since its inception. Earlier in January, 1792 Exchange launched their first — the “Spotlight Report: Corporate Bias Ratings” — which rates over 1,500 companies for their likelihood of canceling customers, suppliers, or employees for their political or religious beliefs and for politicizing the corporation. The 1792 Exchange and their Corporate Bias Ratings database have been featured on FOX News, FOX Business, The Daily Wire, and The Washington Times.
Some of the ideologically-driven votes that fund managers have supported in recent years include:
- “Report evaluating any risks and costs to the company associated with new laws
- and legislation severely restricting reproductive rights” at Walmart.
- Forcing third-party “racial equity audits” at companies including Amazon, Apple,
- Chevron, Comcast, The Home Depot, and Wells Fargo.
- Report on aligning retirement plan options with climate goals at Comcast.
- Disclosure of lobbying and “alignment with company values” at FedEx directly
- targeting donations to Republican officials.
1792 Exchange has assembled this database to:
- Provide a public resource to hold pension fund board members and staff to their fiduciary duty to maximize account holders’ retirement returns and ensure that the proxy votes of workers and retirees are not being leveraged to advance controversial political causes and speech they disagree with.
- Encourage asset managers and proxy advisory firms to stop voting non-ESG funds for ESG goals. Their fiduciary duty is to maximize investment returns and nothing more. Anything else jeopardizes their responsibility to act in the best interest of the public workers and retirees whose money they invest.
- Educate citizens and state legislators as they debate proposals to protect public employee pension funds from being managed for non-financial objectives and to gain control of the power of their proxy votes.
- Shine a light on the voting records of asset managers to move them to neutral and fulfill their fiduciary duty.
- Serve as a confidential, pro bono advisor to companies wishing to get back to business and avoid the divisive political agendas being pushed by some asset managers and state pension funds.
“If you’re a retiree in one of these state plans, call your pension fund and ask what their proxy vote policy is. If your retirement plan is held privately, research your asset manager,” Fitzpatrick added, encouraging pensioners and investors to stay informed. “Find out if they pursue non-financial goals contrary to your values that risk diminished investment returns. Asset managers like BlackRock and proxy advisory firms like ISS and Glass Lewis violate their fiduciary duty when they make investment decisions and vote proxies for non-financial agendas, undermining your financial goals. Don’t let them vote your proxies; vote your own.”
To view the full Spotlight Report: Proxy Voting database, click here.
1792 Exchange is a 501(c)(3), educational, non-profit organization whose mission is to preserve freedom by partnering with allies to steer public companies back to neutral on ideological issues. They create Spotlight Bias Reports, policies and resources that expose coercion and corporate bias. They protect First Amendment freedoms and ensure all viewpoints have a seat at the table. They help corporate board members and executives maximize shareholder value, respect stakeholders, return to cultural neutrality, and serve customers with excellence and integrity. They also educate Congress, other leaders and the American people about the dangers of stakeholder capitalism to safeguard Free Exercise, Free Speech and Free Enterprise.