21 states threaten banks with legal action over guard policy: ‘Stay in your lane’

EXCLUSIVE: A coalition of 21 state attorneys general issued a stark warning to dozens of financial institutions and asset managers, warning them not to pursue aroused environmental and social initiatives.

In a letter sent Thursday to 53 of the country’s largest financial institutions, which together manage trillions of dollars in assets, attorneys general threatened legal action if the firms diverged from the best interests of their customers while advancing social priorities. The effort, led by Montana, Utah and Louisiana, comes ahead of proxy season, when most companies hold annual shareholder meetings where they vote on major policy initiatives.

“This ESG nonsense is seeping into a lot of our states and the way they’re doing it is really, really concerning and probably patently illegal,” Montana Attorney General Austin Knudsen said in an interview with Fox News Digital. “To have it enforced through these asset managers and through these proxies is extremely worrying.”

“The message is, ‘Stay in your lane and do what you’re supposed to do. You have a fiduciary obligation under the laws of our various states to maximize investments. That is your job. You should. We’re aware of state laws, and if need be we will defend our state retirees against anything outside of that lane.


Montana Attorney General Austin Knudsen, Utah Attorney General Sean Reyes and Louisiana Attorney General Jeff Landry led the effort Thursday. (Fox News)

The letter, first obtained by Fox News Digital, said that over the past few years, large wealth managers, which hold majority stakes in large publicly traded companies, have used client assets to change corporate behavior and adapt to so-called environmental , social and governance criteria to align (ESG) standards.

Critics – including attorneys general, state treasurers, the energy industry and consumer groups – have accused ESG-focused wealth managers of circumventing their statutory fiduciary duty to look after the well-being of the clients whose money they manage.


“You are … not only required to follow the general laws discussed above, but also have extensive responsibilities under both federal and state statutes governing securities,” Knudsen and the other attorneys general explained in the letter. “Broadly speaking, these laws require you, as a fiduciary, to act in the best interests of your clients and to exercise due diligence and loyalty.”

“Put simply, you are not the same as political or social activists, and you should not allow the vast savings entrusted to you to be confiscated by activists to further non-financial causes,” she continued.

Demonstrators demonstrate outside BlackRock's headquarters in New York City during the company's 2022 annual meeting.

Demonstrators demonstrate outside BlackRock’s headquarters in New York City during the company’s 2022 annual meeting. (Erik McGregor/LightRocket via Getty Images)

The attorneys general particularly criticized ESG practices that drive aggressive climate policies, which opponents say would be the case hamper the fossil fuel industry and increase consumer prices for energy.

Thursday’s letter highlighted that asset managers are participating in Climate Action 100+ and have joined the Net Zero Asset Managers Initiative (NZAM). The two associations require their members to make specific climate commitments.


For example, the NZAM requires members to “accelerate the transition to global net-zero emissions and that asset managers do our part to meet the Paris Agreement goals.” NZAM members also commit to “implement a stewardship and engagement strategy with a clear escalation and voting policy that [their] Ambition for all assets under management to achieve net-zero emissions by 2050 or sooner.”

And the Climate Action 100+ initiative calls for commitments from boards and executives to “reduce greenhouse gas emissions across the value chain” through net-zero commitments.

“None of this is financially justifiable,” the attorneys general noted in their letter. “Instead, it is a transparent attempt to push policies through the financial system that cannot be achieved at the ballot box.”

A person walks past pump jacks in operation in Bakersfield, California.

A person walks past pump jacks in operation in Bakersfield, California. (AP Photo/Jae C. Hong/File)

Knudsen added that he was concerned that ESG policies would ultimately harm Montana residents reduce their power options and hiking prizes.

“Montana is a northern state. It’s going to be very, very cold,” he told Fox News Digital. “We cannot heat our homes with rainbows and fairy dust. That’s basically what we’re talking about here when we talk about solar or wind power. When it’s 40 below in Montana in February, the sun isn’t shining and the wind isn’t blowing.”

“We have to keep a million people warm. So we need to have reliable power,” he said. “And Montana is an energy producing state. We produce oil, we produce natural gas, and we produce some of the highest quality coal in the world. Well, I mean, for me it’s a no-brainer.”


Knudsen noted that New York-based BlackRock, one of the asset managers targeted in the letter, owns a 25% stake in NorthWestern Energy, Montana’s largest regulated utility.

BlackRock, that alone manages more than $8.5 trillion, has explicitly used customer funds to advance a green transition policy to combat global warming. In 2021, the company’s CEO, Larry Fink, said that pension funds, foundations and endowments “should have a loud voice [fossil fuel] move companies forward.”

Thursday’s letter also warned against taking certain measures to promote race and gender quotas or abortion. According to shareholder advocacy group As You Sow, more than 20 abortion-related proxy measures were proposed this year, more than every other year combined.

In addition to BlackRock, the letter went to Franklin Templeton, Goldman Sachs, HSBC, Invesco, JP Morgan, State Street and dozens of other wealth managers.

Source : www.foxnews.com

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