Are Oklahoman’s investing in their 401k inadvertently sabotaging the oil and gas industry? Would you invest in a company in your 401k that is trying to destroy your company and way of life?
To give you an idea of how big the energy business is in Oklahoma, the Daily Oklahoman wrote on July 7, 2022 that, “Oklahoma collected a record amount of tax revenue from oil and gas production last month, and the state ended its fiscal year on June 30 with total tax collections up 15% from the prior year.”
Not to be outdone, the Journal Record, Nov 1, 2021, article pointed out that “Oklahoma ranks as the fourth-biggest producer of oil in the United States, a country that in 2020 outproduced the likes of Russia and Saudi Arabia and for the first time earned status as a net exporter of oil.” And the Oklahoma Office of Workforce Development recently found that “Energy is the highest-paying industry in the state, with an average salary of more than $109,000 annually, and employed more than 84,000 Oklahomans in 2021.”
So, why would hard working Oklahomans in their 401k plans invest with companies that may be trying to destroy their own livelihood? The WOKE movement has creeped into the mutual fund business. This could be a same problem for other energy-rich states like Texas, Ohio, Pennsylvania, New Mexico and Colorado. Did I miss a few others?
Yes, the same leftist philosophy that is attempting to tear down our educational system is trying to do the same to the investment world. Which means, many Oklahoma 401k participants may be unknowingly investing in companies that are against their best interest.
For 23 years I have been serving 401k plans and their employees all around Oklahoma. I select and monitor all the investments in the plans as a fiduciary advisor and put my clients’ best interest first. In the past 2 years I have detected a pernicious trend by some of the nation’s largest mutual fund companies to adopt ESG investing that considers companies based on fashionable criteria like environmental, social and governance measurements and then slip them into 401k plans all across America.
Target-date funds are a great example. BlackRock, Vanguard, and State Street are America’s top three shareholders in a startlingly large number of the world’s largest and most influential companies. And many Oklahomans—like the rest of America—invest in their mutual funds. The last time I looked there were over 6,000 401k plans sponsored by employers in Oklahoma. These fund companies have for a long time used their dominance in passive investment funds to force corporations to comply with their ESG goals that may make them less profitable. When a mutual fund manager uses your money to advance a hidden agenda, it may represent a fiduciary breach.
How do ESG funds use your money to promote their political agenda? When you invest in, say, a BlackRock fund, you own shares in the fund, which in turns owns stocks. Formal ownership of a company share gives BlackRock a vote in elections for the board of directors and on resolutions governing corporate policy. The three biggest fund managers BlackRock, Vanguard and State Street manage a combined total of some $20 trillion in assets. Recently their combined holdings of ExxonMobil (890 million shares) back in 2021 backed a slate of new ExxonMobil directors put forth by a tiny activist fund manager Engine No. 1 which had only a million shares and a toxic green agenda. Their green agenda masqueraded into ESG policies were in direct conflict with management that run ExxonMobil day to day.
It’s not all bleak, though, for 401k investors. There are new choices coming on the horizon. Enter Vivek Ramasawamy, who the Wall Street Journal recently labeled, “a 37-year-old wunderkind.” An Aug. 13, 2022 opinion piece in the WSJ detailed how he has formed an alternative investment company that offers non-WOKE agenda funds. STRIVE Asset Management was born with a mission to “restore the voices of everyday citizens in the American economy by leading companies to focus on excellences over politics.”
His alternative? The Strive U.S. Energy ETF (ticker DRLL), began trading in August on the New York Stock Exchange, where Ramaswamy rang the closing bell. DRLL is an alternative for BlackRock’s ETF iShares U.S Energy ETF (IYE) with, believe it or not, a green agenda. Most ESG funds are easy to spot and are typically labeled ESG.
My Oklahoma City-based company, Ok401k, as a Registered Investment Advisor (RIA) serves many companies in the oil and gas industry that produce cleaner and more carbon friendly energy than the current countries that produce dirty high-carbon energy the Biden Administration wishes to buy from. These overseas countries are bad actors, terrible environmental stewards and happy to destroy the Sooner State and America’s way of life. 401k sponsors need to be aware of these fund companies that are adopting ESG. Think of the ambiguity of these companies’ agenda. BlackRock Chairman of the Board Larry Fink seems to penalize America’s energy industry and embrace China, the world’s largest carbon emitter and a country that can count Uyghur genocide among its many crimes against human rights.
The state of Texas has woken up to the threat. Texas Attorney General Ken Paxton joined AGs from 18 other states in a letter to Fink challenging his company’s reliance on Environmental, Social, and Governance investment criteria rather than shareholder profits in managing state pension funds.
“ESG goals, while ostensibly well-intentioned, make little economic sense, and have a direct adverse effect on Texas’s oil and gas economy and state pension fund performance. BlackRock’s actions may also violate state and federal law,” the letter stated.
Be careful Oklahoma and America. Get AWAKE on WOKE investing. Know what you invest in.
EDITOR’S NOTE: The opinions, beliefs and viewpoints expressed in this contributed op-ed are those of the author, Ok401k President Terry Morgan, and do not necessarily reflect the views of 401(k) Specialist. Care to respond? Please use the comment tool below.
SEE ALSO:
• BlackRock’s Fink Defends ESG Agenda, Says It’s Not ‘Woke’
• Does ESG-Based Proxy Voting Matter? Just Ask ExxonMobil
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