Kentucky Attorney General Daniel Cameron blasted so-called “stakeholder capitalism” in a strongly worded opinion advising the Bluegrass State not to follow the globalist investment trend with taxpayer funds.
Daniel Cameron’s letter came even as the World Economic Forum gathered in Davos to continue its push for “ESG,” or Environmental, Social, Governance investing, a trend that scores companies by their commitment to progressive causes. Cameron wrote that investing public funds with managers who subscribe to the practice violates Kentucky law.
“There is an increasing trend among some investment management firms to use money in public and state employee pension plans—that is, other people’s money—to push their own political agendas and force social change,” he wrote in a letter dated May 26.
Kentucky AG Daniel Cameron Joins Chorus of Voices in Fight Against Woke ESG Standards https://t.co/NafZEe2luL
— NewsBusters (@newsbusters) May 28, 2022
A recent Daily Wire/Echelon Insights poll found that most investors prefer to focus on profits instead of ESG and that Americans want companies they invest in to seek profits instead of promoting political agendas outside of company missions.
In addition to being advanced by the World Economic Form, ESG is used by huge money managers like BlackRock and Vanguard. BlackRock CEO Larry Fink said it is important to “force behaviors” on people through investment decisions.
Shareholder capitalism has always mandated that a publicly traded company’s board of directors has a duty to those who own stock to maximize profits over the long term. But the new trend, whether dubbed ESG or “stakeholder capitalism,” makes the board of directors answerable to employees, citizens, and causes with no financial stake in the company.
Investment manager Vivek Ramaswamy, who recently launched an asset management firm meant to compete with BlackRock, Vanguard, and State Street with an “excellence capitalism” approach, said investing for profits drives companies to excel at what they do best.
“The data are clear: everyday investors want companies to focus on creating shareholder value by delivering excellent products and services to their customers, not on advancing social or political agendas,” Ramaswamy said.
Cameron said management of Kentucky’s pension fund must seek to maximize profits for taxpayers, not advance a political agenda.
“In sum, politics has no place in Kentucky’s public pensions,” Cameron wrote. “Therefore, it is the opinion of this Office that “stakeholder capitalism” and “environmental, social, and governance” investment practices that introduce mixed motivations to investment decisions are inconsistent with Kentucky law governing fiduciary duties owed by investment management firms to Kentucky’s public pension plans.”
Cameron, the state’s first African American attorney general, is running for governor in 2023, looking to oust current Democrat Gov. Andy Beshear. Agriculture Commissioner Ryan Quarles, state Auditor Mike Harmon, and state Rep. Savannah Maddox are also all expected to run in the Republican primary a year from now.