This month the Texas Government ripped $8.5 billion of its funds from the world’s largest investment fund manager, BlackRock. Texas made this decision on the basis of a law passed in 2021 that banned financial institutions from boycotting entire parts of the agricultural or mining industries.
These laws are broadly aimed at the scourge of ESG investment practices. In theory, ESG stands for Environmental, Sustainability and Governance. The idea was that investors should apply ethical principles to their investments and so not invest into businesses that in their view would cause damage to the environment or sustainability.
In practice, ESG principles have been applied to naively and simplistically boycott entire industries at the whim of the green activists that have infiltrated the likes of BlackRock and many other large investment funds. This has not improved the environment but it has limited the supply of energy and food in western economies.
Ever since ESG and its related cousin, Net Zero emissions emerged, we have seen skyrocketing energy and food prices. Who knew that boycotting investment in coal, oil, gas and agriculture production could push up prices! Keep in mind that around half the world’s food is grown using fertilisers made from natural gas.
ESG has come to mean not so much as what it was meant to stand for. Instead, ESG now seems to stand for Extreme Shortages Guaranteed!
Worse these so-called “ethical” principles are being imposed by a caste of self-appointed elite who run the world’s largest investment funds. These people are not elected to any Parliament, they are not accountable to any voters and often they are not even Australian citizens but they seek to dictate what should happen on Australian mines and farms.
Last year, Westpac announced that going forward its farming customers would have to comply with radical deforestation guidelines that would limit how farmers can manage their own land. Already most major banks limit funding to businesses in the coal industry – including small and medium businesses providing coal mining services. Who elected these bankers to decide what appropriate regulations should apply to farming?
The ESG movement represents a reduction of the sovereignty of a free and democratic people to elect those who rule over them.
How we regulate the clearing of trees, the mining of our mineral wealth and the drilling for our petroleum resources is a question that should be left to our democratically elected Parliaments. Modern day large investment funds are adopting the form of a quasi-Parliament. Modern bankers imagine that they are best placed to decide what is ethical and what is not in our society.
How exactly did we get to a position where our banks have appointed themselves the moral guardians of the galaxy? These are the same banks who over the past decade have charged fees to dead people, forged the signatures of pensioners to transfer their funds and shut down hundreds of country branches leaving people high and dry with no financial services.
If anything it should be the mining industry boycotting the banks because they cannot be seen to do business with a group of people whose moral standards are so low!
What is needed is for Parliaments to re-establish their sovereignty as the appropriate rule makers for society. The anti-ESG laws in Texas have now been passed by a total of 14 US States and many others – including the Federal Congress – have proposed laws on the books.
I am working on a similar law for the Australian Parliament. It is time to take back our democracy from this international cabal of bankers. If a banker would like to make the rules that our miners and farmers have to abide by then let them stand for Parliament, get elected and then we could listen to them.
