ESG-activist investment managers aren’t just hurting Americans’ retirement savings, their also likely violating antitrust laws, American Energy Institute CEO Jason Isaac testified at a House Ways and Means Committee hearing Tuesday.
Investing to promote radical, leftist Environmental, Social and Governance (ESG) ideology comes at a cost, since ESG funds have both higher fees and lower returns, Isaac testified:
"Virtue signaling is proving very expensive to retirees here in this country, to the detriment of our national security, to the detriment of our fiscal responsibility."
"Virtue signaling is proving very expensive to retirees."— Rep. Jason Smith (@RepJasonSmith) November 7, 2023
ESG funds have higher fees and lower returns.
Last year, the 15 largest ESG funds actually lost money and performed 19 points worse than the S&P 500.
Seniors are paying more and getting less. pic.twitter.com/KckUo1d45x
“The weaponization of ESG isn’t just harmful to our economy, energy industry, and national security—it’s likely criminal collusion,” Isaac explains in written testimony submitted to the committee:
“A free market is no longer free when the major financial players are colluding—not behind the scenes but out in the open—to gut politically targeted businesses while forcing dollars into their own ‘green’ investments. That’s exactly what’s happening on Wall Street with the rise of ESG investing.”
“These cartel-like tactics are a flagrant violation of longstanding federal antitrust laws,” Isaac says:
“Corporations are legally barred from engaging in group boycotts. These rules were set into place to protect consumers from conspiracies to manipulate prices, constrain competition, and create politically or socially favored companies that limit consumer choice.”
"The un-American agenda of the climate cartel is an affront to the principle of liberty that founded our country," Isaac testified.
“The worst part of all this? Even the most powerful financial mob could never actually succeed at eliminating fossil fuels—only at driving up prices and sending production overseas. It’s a power grab with no net gain,” Isaac writes:
“No matter how malicious the media narrative on climate change becomes, we won’t stop needing affordable, reliable energy.”
Isaac documented how ESG-labeled funds have traditionally underperformed – and how the 20 largest ESG-labeled funds together actually lost value in the past year:
“Over the past ten years, so called ‘clean energy’ stocks have significantly underperformed the market as a whole, with the S&P 500 Clean Energy Index returning a mere 4.5% annually compared to 11.5% annual returns for the S&P 500.
“The ESG bubble in 2020 was a result of low interest rates, government largesse (along with the expectation of more to come), and investor enthusiasm that wind, solar, and similar technologies would soon outpace fossil fuels in the energy marketplace. The past year has shown that enthusiasm to be misplaced.
“In just the past year, not one of the largest individual ESG-labeled funds performed better than either the S&P 500 or NASDAQ. Aggregate returns on the top 20 largest ESG-labeled funds were -.2 percent during the past year, while the S&P 500 and NASDAQ went up 19 percent and 25 percent, respectively.”
“We have a responsibility to put the needs of seniors ahead of climate extremists and far-left activists who want to use retirement savings to finance a political agenda,” Committee Chairman Jason Smith (R-MO) said at the hearing.
The Trump Administration blocked Wall Street managers from investing American’s retirements in woke ESG special interests.— Rep. Jason Smith (@RepJasonSmith) November 7, 2023
The Biden Administration overturned that rule and put climate extremists & the far-left over seniors. pic.twitter.com/F2ZrNGmvDJ
Pres. Biden didn’t just reverse a Trump rule requiring retirement account managers to base investments solely on retirees’ best financial interests, but he even “went as far as to veto a Congressional resolution back in March that would’ve corrected this error,” Smith noted.
“These ESG-labeled funds have over $170 billion in total assets under management, tossing Americans’ hard-earned retirement savings to the wayside in the name of this insane agenda,” Isaac warns.
Editor's Note: This piece was originally published on MRCTV.org.