New Report Card on Nation's Largest Money Management Firms Finds Continued Support for Radical ESG Measures

News provided by

Committee to Unleash Prosperity

May 16, 2024, 13:25 ET

Firms with Trillions of Dollars of Worker Pension Money under Management Routinely

Worst Money Management Firms include:
Grade: F

BNP Paribas Asset
Guggenheim Funds
Mutual of America Funds
Morgan Stanley Funds

Best Money Management Firms include:
Grade: A

Dimensional Investment Funds
T Rowe Price Funds
Vanguard Funds

WASHINGTON, May 16, 2024 /PRNewswire/ -- A new report by the Committee to Unleash Prosperity (CTUP) on the intersection of proxy voting and ESG/DEI issues comes three major conclusions:

Many of America's major money management firms are still consistently voting for ESG/DEI shareholder resolutions that are pursued by left-wing pressure groups and shareholder activists. These votes are a violation of their fiduciary duty to their clients.
The general trend since 2022 is AWAY from ESG. The study finds that major money managers were about 25 to 30% less likely to vote for hostile ESG resolutions in 2023 than they were in 2022. But the study also finds that about half the time these companies continue to support these ESG resolutions.
The worst actors of all are the two major proxy voting advisory firms – ISS and Glass-Lewis. These advisory firms – which are employed by most major money managers – almost always recommend "yes" votes on the most egregious ESG resolutions. ISS received an implied grade of F for their recommendations and Glass Lewis an implied grade of D.

CTUP graded more than 600 investment firms, based on their level of support for 50 extreme shareholder proposals, focused on objectives such as mandating divestment from oil and gas firms, imposing hiring quotas based on race/ethnicity and gender, and conducting internal "racial equity" audits. The average grade earned by the 40 largest firms was a C. More than a dozen of these firms received an F.

The following fund families earned an F:

ProShares Funds
Principal Funds
Thrivent Funds
Touchstone Funds
Eaton Vance Funds
Rydex Variable Funds
Flex Funds
ProFunds
Columbia Funds
Guggenheim Funds
Direxion Funds
Thompson, Siegel & Walmsley
Gotham Funds
Mutual of America Funds
Meeder Funds
Morgan Stanley Funds
TD Asset Management
Lombard Odier Investment
Managers
Manulife Investment Management
Danica Pension
Victory Funds
DWS Funds
AQR Funds
BNP Paribas Asset Management
Sparinvest
Swisscanto

This report advocates that firms adopt a policy of rejecting ESG resolutions because these policies interfere with the ability of funds to maximize their returns to their clients – and thus interfere with the fiduciary responsibility of money managers.

The new report follows a landmark CTUP report released last year that showed most large investment firms – from State Street to BlackRock to JP Morgan to Franklin Templeton – were routinely voting in favor of even the most radical and hostile resolutions. By doing so, they were putting political considerations over the financial interests of tens of millions of Americans whose pensions and other retirement funds they managed.

"Investors pay the price for this ideologically driven approach to investing – in the form of having their votes harvested in favor of policies that often diminish the performance of the funds holding their savings, "said Committee to Unleash Prosperity co-founder Stephen Moore. "The purpose of this report is to identify which major investment houses are the most – and least – guilty of putting politics ahead of their client's interests and help persuade investors to withdraw their money from these funds as well as prompt fund management companies to stop letting left-leaning ideology drive their investment decisions."

Click here to read the full report.

Click here to read the WSJ Editorial Board

The Committee to Unleash Prosperity is dedicated to educating policy makers and the public about policies to maximize economic growth and prosperity in America and around the world. For more information: www.committeetounleashprosperity.com

CONTACT: Alexandra Preate
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SOURCE Committee to Unleash Prosperity