Marlo Oaks, Utah State Treasurer and an expert on ESG, just addressed the House Ways and Means Committee. He shows how ESG is the greatest threat facing our economic system today. "ESG and capitalism are incompatible." ESG, he says, is a tool used by those who are trying to fight capitalism and their primary leverage is a self-created climate change crisis.
really the what drives the ESG train is climate change and climate change has
been catastrophized to such a level that uh people are now convinced that
corporations and and government and individuals everybody on the planet has to work together before we get into this
important interview with Marlo Oaks on ESG versus capitalism I want to bring up
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go all right welcome to Quick show my name is Greg Matson and I am your host on this episode we bring back Marlo Oaks
State Utah State Treasurer to talk about ESG Marlo you've become more and more of
a warning voice on ESG these days you recently were invited to speak to the
ways and Means Committee at at Congress I think earlier this month how first of
all welcome to the show thank you thanks for having me how is it that you were invited to speak to Congress uh so I
guess somebody on the house Ways and Means staff had reached out to an organization and asked who uh you know
who they should invite to come speak I think they wanted to State treasur and so my name was floated and and they
reached out okay all right uh well we've talked about this before a couple of
times ESG I think that this is something I actually I want to cover even more on the podcast I I'm I'm drawing many of
the questions as I that I'm going over here from your address to the Congress
and some of the quotes that you gave them um I'm gonna ask you this first right and and I'm going to assume that
most people understand already what ESG is but how does ESG hijack corporate
governance to in advance an ideological objective so there are a few ways um one
is uh asset managers with you know trillions of dollars um and it's other
people's money uh under management they're including you know that includes
nesg funds um so that's something that a lot of people don't understand is that
uh the agenda is being pushed by funds that are not labeled sustainable or
ESG um really managers are trying to use all assets under management um and and
so they use that money and then they go into companies and engage with those companies and tell them what they expect
them to do and this is outside of a a proxy vote which which is sort of the
annual you know annual shareholder meeting where where issues are voted on by shareholders this engagement is
happening with the largest um investment managers that go in as the largest owners of the company and saying here's
what we expect you to do you know so they might go into for example Exon Mobile and and say hey we expect you to
reduce your greenhouse gas emissions you need to uh put together a plan to be Net Zero by 2050 and by the way cut oil
production by 20% so that's one way that they're they're hijacking who is going
in and asking them to do this this is the investment managers so you know the black rocks the the state streets of the
world the vanguards um you know a lot of the assets have been Consolidated at passive investment managers those that
are just running index funds um and so they use that um ownership a as a and
they become active owners um on the governance side so they go in and they tell these companies what they expect
them to do um now are they owners only because they run the funds or are they
owners in the sense that they have voting rights as well so it's it's both
so they they essentially are uh you know a lot of a lot of the Assets in the
United States that are in retirement portfolios whether it's a 401k or a
traditional defined benefit pension plan are index are passive um certainly on
the equity side and that's where you get the ownership and so BEC by virtue of owning the shares of the company they uh
exercise the rights as an owner even though the real owner is is you and I in
our retirement but we have effectively hired an agent for us and and and they
are then uh exercising the power of that ownership uh to push an agenda and so
they do that both through the proxy voting where they do have a right to um
uh exercise you know voting rights essentially on on issues that come before a corporate board and uh before
the shareholders essentially um they'll vote the shares and they're supposed to
vote them uh in a fiduciary using a fiduciary standard which means voting
them in in the best interest and financial interest of the owners and so what's doing essentially what's in the
best interest of shareholders um the most dangerous part of this whole situation is the
engagement that happens outside of the proxy voting and so one thing that was
noted by the press this last year was that Black Rock Only supported 7% of ESG
proposals um but if you adjust for the engagement that they had with companies
and the the amount of um success that they had in in getting companies to
adopt the ESG uh issues that the Black Rock wanted them to adopt if you Jud
that number it was more like 53% uh um of voting in favor essentially
because they had already gotten the company to agree to to push uh a
particular ESG item outside of the proxy vote
so here's something I'm trying to understand I've looked into ESG quite a bit over the last several years
and why you because this is something that is growing there's more and more Assets in our management that are that
are under this ESG umbrella uh as you say the investment the investment companies are managers are are taking
this on they're the ones directing often times an ESG agenda uh this is completely
against letting the markets work I mean this is when you go and you invest in
this stock market you are doing that with the understanding that you're
trying to make a wise investment uh in the marketplace and that your assets are going to grow over
time and that there's no other additional agenda that is going to be uh
influencing this other than the capital markets other than capitalism right and
and hopefully you're making a and this is for your retirement that's where most of these funds come from they're in
people's retirement accounts why in the world do investment uh management
companies and others want to change that that's a great question um you know I I
believe that the ultimate agenda it it really the what drives the ESG train is
climate change and climate change has been catastrophized to such a level that
uh people are now convinced that corporations and and government and
individuals everybody on the planet has to work together to address climate change because we Face an existential
threat well James Madison said crisis is the rallying Cry of the Tyrant and if
you look at some of the quotes by people who are pushing this agenda the real agenda behind climate change is
something different and and so for example in 2015 um figueras uh Christiana figueras
who was the head of the ipcc at the UN which is their uh climate change body
she was responsible for the Paris climate Accord um later that year so earlier in 2015 she said this is the
first time in the history of the world that we have intentionally tried to change the economic system that's been
in place in the world for the last 150 years uh in 2019 AOC just real quick so
that I mean that's that's capitalism yes that's capital and and that is directly tied to democracy
correct uh aoc's Chief of Staff um said the green New Deal originally wasn't
about climate it was how do you change the economic system uh the UN commissioned a report
in 2018 and the headline that came came out of that is uh we cannot fight
climate change with capitalism and so that is the real
agenda is is the destruction of our economic freedoms and if you look at ESG
and understand what ESG is which is essentially coercive capitalism it cannot coexist in our economic system
our free market system because there is an agenda that goes beyond the
uh investment agenda that is typically is what investors invest for and that is
to make money as soon as you introduce another agenda for example climate
change and addressing climate or addressing social issues whatever it is when you introduce that agenda you now
have corrupted the capital markets because you have the Dual mandate that
uh harms the fiduciary standard in this country and when you introduce an agenda and you say all actors have to adopt
this you no longer have a Marketplace because the only way a market works is to have alternative views of the future
which means there's not an agenda other than to make money so we're literally seeing the uh the push to destroy our
economic system and that's that's borne out by what they've uh what some of these folks have said themselves so
you've already mentioned some of the players here the investment managers uh
who is really ultimately then is there a group or an institution an organization
who is ultimately pushing the proliferation of of ESG well so if you look at globalism
in general in order to get Global Buy in um you know take I think of it as a
three-legged stool so one of the legs is government um and to get government on board that's why you have the UN
sustainable development goals to get corporations on board that's ESG and that's the world economic Forum uh and
then to get individuals to buy in uh they the uh un and World economic forum
and and other globalist interests um recognize that people listen to their
religious leaders and so religious organizations are are now um pushing
climate change and and trying to address climate change and and so religious organizations have been infiltrated um
on the corporate side again it's kind of world economic Forum taking the lead but it's very closely tied to the UN
sustainable development goals uh and and really the the folks who are pushing
this um you have to look at ngos you need to look at nonprofit organizations uh like you know
Rockefellers and and um you know other uh kind of these
globalist uh foundations that have long been uh interested in in global
governance and and coming out from there you've got the invest why does it does
it help the in I'm just trying to think here because it seems to me that that if
we're not there yet we're pretty close to a point where the agenda for even the investment managers is more important
than than the idea of actual capitalism and making money in other words why would they say okay
we're going to go along with the world economic Forum or we're going to go along with these other initiatives if
it's going to hurt them financially yeah that's that's one of the strange things here and and you have to look one step
above them which is the asset owners um the asset owners are the large pension
systems The Sovereign wealth funds 19 of the 20 largest in institutional
investors in in the world are government sponsored entities whether it's a pension system or a sovereign wealth
fund and they go out and they hire the investment manager um and so the
investment manager has clients coming to them saying we uh we want you to invest
our invest your assets with this ESG mandate um but not just our assets all
of your assets under management and they've done that and that's what they're doing they're they're going into investment managers and putting pressure
on them and investment managers that's how they make money is to manage assets and so when you have your largest
clients coming to you and de and demanding this it's difficult uh to
stand up to that um and there is a virtue signaling component here where
investment managers say well this could be good for business uh you know if we adopt this and show that we're being
responsible stewards and uh you know trying to do the right thing for the client clate and it shows the extent to
which this agenda has has been uh as
infiltrated or has been propagandized I'm not sure what the right word is but
uh um it is so ubiquitous and so many people uh believe that climate is
represents an existential threat that they want to see business adopting this
they want uh you know everybody to to go along with this and and I think that's
what makes this so dangerous when you when you adopt a crisis um narrative
there's a lot that you can do uh to to take away
freedom in 2022 you had mentioned that the Department of Labor had loosened
things up a bit what happened then just last year yeah so um so the um the
Department of Labor you know is in charge of orisa the the law that governs
Retirement Systems uh kind of in the in the private sector um and and so they
allowed a ESG fund to be a default option in a retirement plan and why
that's important is that you know when people go start work at a company they
sign up for their retirement plan and a lot of times the investment options is just very complicated and and people
don't really feel comfortable um you know making those kinds of decisions so they they often will um you know go into
What's called the default option which is essentially the option if you haven't chosen uh where you want your money to
go that's where the money will go um and and so it's not like an active choice
that you're making um and so then you're seeing essentially the politicization of
the retirement um system through that um just that
one uh rule alone from the Department of Labor you know one thing I I think about
when I look at bad policies bad ideas bad ideologies is they almost always act
like a virus and and what that means is they have to have a healthy
host and so they go after the money that's already produced through capitalism or is being produced through
capitalism they go after the money sitting in retire funds that has is there only because of our system and
what we've created and and public companies and the ability to trade and invest and and and then they bring this
in which is supposed to H is going to hamper this greatly but it acts that way right it
comes in it says look we have we're going to use your body or your system
against you to to accomplish our goals yeah I
but but of course they they they make it sound wonderful and and like everybody
wants this and everybody needs to do this uh there's there's sort of this um
veneer to it uh and you know a lot of the story uh was that this will you'll
get better returns um using this uh methodology and of course that has not played out um but
it's it you know they really try to sell it show the opposite exactly that's exactly right um but the
messaging is always look at how wonderful this is yeah
um they're also stating often times that the ESG model gives you additional
information right in other words they're opening up information which they're really saying is here are the the mostly
the climate black eyes of the company so to speak and and they're going to give you additional information about what
you're investing in is that misleading uh yes um think about um
financial services companies and they're they're really the Target because they're they're the foundation of our
capitalist system they're the ones that's allocating capital and U you know making sure that companies have the
money that they need uh and so um Banks and insurance companies they
are always looking at risks whatever they might be uh in environmental risk
right a Property and Casualty Company I used to work at a Property and Casualty Company we they you know they had to
underwrite to um environmental uh issues you know tornado
and and hurricane risk and all these different risks right and and ESG comes along and they act as if nobody had been
doing this before right and these are new risks that we have to talk about no the reality is is that companies have
always had to disclose financially material risks and they weren't called ESG risks in the past but now some of
them have been grouped under ESG risk and so what I've always said is that if there's a financially material risk then
a company's already disclosing that um and if not then it shouldn't be required
of a company to disclose the problem is once you once you say oh we have to disclose all this ESG information you're
really disclosing information that isn't necessarily useful to an investor but it can be very useful to activists who want
to push companies in certain directions and force policy on companies and that's what we're
seeing you had mentioned something uh in your address to Congress you you said
something about guns this is something I hadn't heard before is there is there is
that part of ESG whether or not there I don't know if it's were you speaking about gun companies were you speaking
about I I I heard you mentioned something about guns I think it was basically um
targeting um out of favor Industries um so you know we have an
example here in the state of Utah um a state senator you know and these are part-time
legislators right so they have their own jobs um he had sold uh equipment or something to a Coal
Company and his insurance refused to quote or to reup
his insurance because he had done business with a Coal Company now you do
you know you could you could say well you're doing business with a gun company you're doing business with you know
whatever it is um it it you can see how capitalism can be twisted to force
Behavior because people need money companies need money right um it that's
the way our system works and it's it's I think of it as analogous to the blindfold on in our legal system where
you know Justice is blind well business is supposed to be blind you're supposed to be making economic decisions based on
economics not politics um and and so ESG really tries to take the blindfold off
of economics and and add an element of politics and it will destroy our
economic freedoms yeah I've got I actually know people that have had their bank accounts
Frozen I mean not they're money taken but hey you can't do business here
anymore with us right because whole de banking because of political
transactions and uh yeah it's uh it's very concerning very very concering oh
yeah no in fact um yeah I I've um
I've noticed an increase in that kind of activity and I don't know uh if the you
know the heads of banks are aware of it or you know if this is just a an element
within the bank that you know under somebody else you know kind of buried in the bank and they're doing this I don't
know but it is a it's very concerning a part I I group it in with ESG because
it's essentially politici in our our economic system in in the case of the people that I know it was the Department
of Justice came to the bank oh my yeah and
uh anyway it's very very odd and and very very concerning uh there's a new
asset class that's come out in the last few years called natural asset companies can you go over that a little bit is
they seem almost like the ESG class of of assets yeah this is um this is really uh
a serious problem um essentially the New York Stock Exchange went to the
Securities and Exchange Commission the SEC on September 27th so just a couple
of months ago and they said we need you to provide a rule that will allow us to
list companies whose purpose is not to make money it is to provide ecological
services and what that means is that these companies would be formed on the New York Stock Exchange or listed on the
New York Stock Exchange they would raise capital from investors around the world
and then they would go out and buy land in the United States and basically lock
it up from economic activity and so uh you could take large uh amounts of land
whether it's public or private and lock it away so that you um really eliminate
human impact and that that seems to be uh the driving you know issue is is that
people want to reduce human impact on the environment and the best way to do that is to lock humans away from
economic activity such as grazing uh and mineral extraction and and that kind of
uh you know that those kinds of activities are very important economically but they're also a a a
major part of Rural America and you know folks in the city you might ask them
where eggs come from and they'll say a carton right but it's coming from rural America and Rural America is is where we
get fed and and and you know our oil and gas uh is is coming from there and it's
a key part of our economic activity if we allow natural asset companies uh to
begin trading in the United States you could see massive amounts of land locked
up and essentially taken away from human activity which would drive up the price
of agricultural Goods uh Drive up the price of minerals including oil and and
gasoline and drive people out of uh rural communities into the cities I
think that's also part of the agenda here is is if you have people confined into smaller spaces you they tend to
travel less um and you can control them better um and so it it really is
troubling on a lot of different levels um again I ask again is there is
there an economic benefit fit for someone on this yeah so um you could see
uh carbon credits um you know uh you could actually I think make quite good
money on um potentially monetizing you know people wanting to um
if people want to reduce their carbon footprint they uh they buy into a natural asset company that is producing
ecological services and right taking carbon out of the air because they own a
certain amount of forest and and so they're able to claim those carbon
credits or tax credits something you know there's going to be economic ways
um to to benefit from that uh what I think is artificially uh benefiting um
but you know those could be those could be very big markets uh
potentially if particularly with large Sovereign wealth funds that may be very
interested in that China Russia Saudi Arabia you know what better way to
the United States than to um buy into one of these and and have our natural resources locked up without a
fight let me go back to the production on this though the capital production I mean if you are showing let's a couple
things here number one let's say you go out and you buy 10,000 acres instead of buying a 100 or
whatever it is that you're going to use for a farm or or for a a you know somewhere that produces eggs for example
and so maybe your carbon footprint then is reduced because of the amount of land and it's now a percentage is that kind
of what you're saying you've got a percentage of all this land and this is all that you're using here for for um
you know Machinery or or whatever it might be right yeah so um isn't that
gonna lower your production or or not change it at all how does your stock value go up in
something like that because you have more land um so it's it's going to be
it's coming from the um from new accounting the accounting of uh what are
ecological Services worth what is clean water worth what is clean air worth what is um you know the the um converting
carbon to Oxygen by you know trees and photosynthesis what is that worth that
is scary yes and so it's it's really kind of creating a new way to Value
those natural processes um and and making it
so uh so that investors can monetize that in a way that is beneficial to them
but again I mean so you go you know if we take this all the way through with
ESG you know and and you look at your globalism your your social issues your environmentalism it's it's changing it
really is changing the system oh completely right it it is it is I mean you're getting down to the level of
changing your accounting practices and what is a value it
becomes it has nothing to do with the asset it has nothing to do with the production it has nothing to do with the
Futures it has nothing to do with these things it has purely to do with what are
the social policies yeah that you're following or at least that's heavily weighed yes and and you know what uh
what is the value of of um clean air you know we've thought of that as sort of a
a um positive externality it's really trying to price
externalities um uh natural externalities and um assigning a value
to them and and trading them um in a way that that incentivizes locking up
resources so that they cannot be extracted for human uh human use yeah
it's it's a virus it's more like cancer I think yeah
yeah yeah exactly well Mara really appreciate the updates on these things this is a very important issue we want
to cover this a lot more here on the podcast you're a great voice for this of warning so appreciate all that you're doing
anything we can do to amplify your voice we want to do this so appreciate it and
uh look forward to having you back again no I appreciate it and it's really important for people to understand this
issue uh we have until January 2nd um when the SEC is I think making a
decision on this rule whether it's to implement the rule and allow the New York Stock Exchange to list uh knacks on
on the exchange or to extend um the comment period per um it's really
important that that we uh that people step up and let their uh Congressional
Delegation know that they do not want this um we've got to have our voices heard it's interesting you know the SEC
provided a 21-day comment period very short um and going into the end of the
year so people are distracted by Christmas and um and I think that's very
much on purpose and so I really appreciate you um bringing to this great
all right Marlo appreciate it we'll talk to you again soon all right thanks Greg thank
you
