Push For ESG Goals Forces Hard-Pressed Companies To Spend Money On Questionable Ideas In A Time Of Global Economic Crisis
“Drop The Whole ESG Scam And Get Back To Your
Duty To Your Clients,” Advises FEP’s Shepard
Washington, D.C. – State Street CEO Ronald P. O’Hanley affirmed today that the company’s Environmental, Social and Governance (ESG) commitments are subordinated to its longstanding and legally-mandated obligation to serve the interests of its shareholder clients. This assertion raises questions about State Street’s well-publicized recent demands that companies in which State Street owns stock must conform to an enhanced ESG agenda.
During the company’s virtual annual shareholder meeting, Scott Shepard, Coordinator of the National Center for Public Policy Research’s Free Enterprise Project, asked O’Hanley:
State Street intends to hold American businesses hostage to its narrow political preferences by demanding that companies in which it invests ascribe to its ESG goals. While sometimes nobly articulated, these are in fact just a collection of left-wing policies that, if and when enacted, end up costing companies vast sums for little or no long-term benefit. Especially during the economic crisis that is following on the heels of the pandemic lockdown, how can you justify using your clients’ shareholder status to apply a legally suspect concentration of market power to demand changes that do not serve their or national economic interests?
After the meeting, Shepard added:
State Street has more than 225 years of experience in American stock markets. For most of that time it has been a fiduciary steward to its clients, the shareholders whose assets it manages. Recently though, it appears to be contemplating a different course.
State Street recently announced an intention to use its clients’ shares to force companies to take costly and politically partisan ESG positions. While these positions are often nobly phrased, they in fact cost companies huge amounts in compliance costs in aid of ill-considered environmental efforts and interventions in employment and corporate governance that are counterproductive to shareholders while failing to create meaningful countervailing benefits for other parties.
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