by Jason Cohen
Several asset managers tapped the endowment funds of two major Texas university systems to submit fossil fuel shareholder proposals in 2022 and 2023, according to a report by the conservative watchdog group American Accountability Foundation (AAF).
Owned by BlackRock Aperio Group, Cantillon, Former Vice President Al Gore presided Generation Investment Management, GQG Partners and JP Morgan Asset Management collectively manage as of July, about $4 billion for The University of Texas/Texas A&M Investment Management Company (UTIMCO), which handles university system funds.
Despite the company’s policy towards this and “Texas” status as a leading oil and gas producing nation, UTIMCO asset managers have supported over 150 shareholder resolutions pursuant to environment, society and governanceumbrella (ESG), covering proposals that could undermine the oil and gas industry, According to to AAF documents obtained through a public records request and made available exclusively to the Daily Caller News Foundation.
“Once again, the ESG ideology has awakened, infecting a public institution and stealing its money for its own purposes. This is an outrageous betrayal of the public trust,” AAF President Thomas Jones told DCNF. “[Republican Texas] Governor Greg Abbott must take immediate action to put an end to this nonsense. He needs to shake up the UT/A&M leadership that allowed this to happen and utilize his influence at UTIMCO to make sure it never happens again.
UTIMCO told DCNF that voices related to ESG and diversity, equity and inclusion (DEI) violate “long-standing policies that prohibit the use of foundations’ economic power to advance social or political agendas” and that the review found they consist of 0.3% with approximately 45,000 proxy votes in recent years. The fund manager added that it has since modified its guidelines after detecting violating votes and will impose them on all its third-party investment managers ahead of future proxy votes and revoke voting privileges of those unable to comply.
🚨EXCLUSIVE🚨Swing State Pension Funds Used by Wall Street Titans to Promote ‘Racial Equality’, Climate Agenda, Report Findings @jasonJournoDC https://t.co/LXx3y4WZPV
— Daily Caller (@DailyCaller) January 25, 2024
The firm’s asset managers voted for a total of 159 shareholder proposals that include “racial and gender pay gap reports, efforts to oppose conservative candidates and pro-business trade associations, radical climate policies, targeting gun buyers and pro-abortion initiatives – says the guard.
UTIMCO supervises the biggest public fund in the USA, managing over $76 billion as of August 31.
“UTIMCO’s mission is to ‘generate superior long-term investment returns to support the University of Texas and Texas A&M University Systems,’ yet these voices support political agendas that are contrary to the Systems’ best interests” – American Energy Institute CEO and former Republican Texas State Representative Jason Isaac told DCNF. “By supporting proposals that harm U.S. energy producers, UTIMCO fund managers are violating their fiduciary responsibility.”
Texas leads the nation in crude oil and natural gas production, and in 2023 accounted for 43% of crude oil production, According to to the U.S. Energy Information Administration. However, the AAF found numerous examples of UTIMCO asset managers voting in favor of proposals aimed at reducing greenhouse gas (GHG) emissions and other actions aimed at mitigating so-called climate change, which, according to the regulator, comes at the expense of creating value for investors.
For example, at ExxonMobil’s annual shareholder meeting in May 2023. Aperio Group voted in support of A application to recalculate greenhouse gas emissions to take into account the assets sold. The resolution concluded that “economic risks from climate change exist in the real world rather than on corporate balance sheets” and argued that investments sold by ExxonMobil may reduce emissions on paper but do not actually facilitate achieve the goal of maintaining global temperatures from an enhance of 1.5 degrees Celsius – which is the target for 2015 Paris Climate Agreement — the potential exposure of the company and its stakeholders to what it calls “climate risk.”
Some Aperio Group clients have access to them adjust their individual proxy voting policy, According to to BlackRock. BlackRock itself voted against this proposal ExxonMobil on behalf of most of its customers.
“AAF’s report on UTIMCO’s investment practices should be of concern to every Texan who values our state’s proud oil and gas industry,” Texas Railroad Commissioner Wayne Christian told DCNF. “It is outrageous that Texas university investments are being used to support radical ESG, decarbonization, and dangerous policies like Net Zero and the Paris Agreement that threaten our energy independence and economy. We must put an end to woke political agendas that undermine the very foundations of Texas’ success and ensure our investments align with the values of hardworking Texans.”
Moreover, at the May 2023 annual shareholder meeting of defense contractor Raytheon Technologies, JP Morgan Asset Management endorsed application calling on the company to publish a report on its efforts to reduce greenhouse gas emissions in line with the Paris Climate Agreement.
“Raytheon Technologies generates significant carbon emissions across its value chain and is exposed to numerous climate-related risks,” it says. “Failure to respond to the changing environment could make Raytheon less competitive and have a negative impact on its cost of capital and shareholder financial returns.”
Isaac told DCNF that “UTIMCO managers are discriminating against fossil fuel companies” by investing in ESG based on Texas’ definition of “boycott” Senate Bill No. 13which abbot signed in 2021, and the former representative said he helped create.
The bill defines boycotting energy companies as refusing to do business with or terminating business with a fossil fuel company “without an ordinary business purpose.” It also outlines actions intended to “penalize, economically harm, or restrict a business relationship with a company because the company” engages in fossil fuel activities and does not “commit to environmental standards that go beyond applicable federal and state law.”
Isaac added that asset managers “should be held accountable and placed on Texas’ list of ‘financial firms boycotting energy companies,’ which directs Texas public investment entities subject to SB 13 ‘to avoid contracting with and divesting from these companies unless that these companies can demonstrate that it would be contrary to their fiduciary duties.”
The S&P Global Clean Energy Indexincluding companies producing energy from renewable sources, has fallen by approximately 7% so far in 2024, while S&P 500 Energy Indexin which many oil and gas companies participate, increased by nearly 3% over the same period.
Louisianans’ pension funds have similarly been used to push climate-related proposals at publicly traded companies, DCNF reported in April based on another AAF public records request.
“UTIMCO asset managers’ apparent promotion of leftist causes, including ESG, is extremely disturbing and contrary to Texas law prohibiting boycotts and discrimination against fossil fuels. The Legislature must provide oversight and hold UTIMCO accountable,” Texas Republican Rep. Brian Harrison told DCNF. “Government bodies, including their proxies, should not pursue goals that harm the Texas economy and run counter to our values.”
Cantillon, GQG Partners, Texas A&M and Abbot’s office did not respond to DCNF requests for comment. Aperio Group, Generation Investment Management, JP Morgan Asset Management and the University of Texas declined to comment.
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Jason Cohen is a reporter at the Daily Caller News Foundation.
Photo “The University of Texas Campus” by Randy von Liski. CC BY-NC-ND 2.0.
