3.1.24 – Real Clear Policy

“The Woke Headwinds [Fund Managers] Holding Texas and America Back”

By Aaron Kinsey, Chair of Texas State Board of Education

Excerpts from this article:


In 2022, I had the honor of being elected to the Texas State Board of Education, where I’ve had the privilege of fighting every day in support of Texas families and their children. 

In December, I was appointed by Governor Abbott as Chairman.

The job of ensuring our children have access to a world class education is why I ran for this job - and we’ve made great strides here in Texas during my tenure. 

In today’s society, our children need protecting more than ever -
and alongside my colleagues we’ve worked to keep harmful propaganda disguised as ‘science’ out of the classrooms, removed sexually explicit content from school libraries, fought for school choice, more. 

This work is why I ran for office and couldn’t be prouder of what we’ve accomplished, although there’s much more work to be done.



What many don’t know about the Texas SBOE though, and one of its most important roles,
is oversight over the Texas Permanent School Fund (PSF). 

This fund was established by the Texas Constitution in 1854 and
has since grown to manage over $52 billion in assets, making it the second largest such fund in the nation. 

Every year this fund distributes billions of dollars to Texas schools and leverages its AAA credit rating to reduce financing costs for schools across Texas, resulting in hundreds of millions of dollars in savings for local districts. 

This fund is a model for good governance and helps ensure that Texas schools are some of the best in the nation.

What I might have guessed but didn’t know for certain until I sat in the pilot’s seat in oversight of the PSF is the astonishing rot permeating our country’s financial industry.

To be clear, the men and women who work at the PSF are dedicated and judicious stewards of the fund they manage and deserve high praise for their work.



But the nation’s finance industry, headquartered on Wall Street, needs a public reckoning and that’s a conversation I’m looking to start.

First - the major fund managers (think Blackrock, State Street, Vanguard, etc.) have either signed agreements, or otherwise publicly proclaim, a politically-motivated position that Texas’ signature industry - energy production - is evil and needs to be phased out. 

These fund managers happily accept our money but believe that its source (the PSF is largely funded by royalties from oil and gas) needs to be eliminated in the next 15 years. 

Their stance is in fact the evil one, as energy combined with capitalism has helped raise the living standards for billions worldwide.

To be fair, in response to public pressure, certain fund managers have ostensibly pulled back from some of their most strident public commitments. 

In late 2022 Vanguard withdrew from the Net Zero Asset Managers Initiative and just last week JP Morgan Chase, State Street and BlackRock all pulled out of Climate Action 100+, yet another climate activist group that attempts to leverage large fund manager portfolios to advance a woke political agenda. 

Even in their withdrawals, however, each group reiterated their continued support for the ESG agenda.

[*ESG AGENDA – where socially conscious investors use a set of standards to screen potential investments – stands for “environmental, social, and governance” criteria – in other words, basing investments on how WOKE an investment is before deciding whether to invest in it] 

Whether these moves are indicative of a true change in direction or a cynical attempt to continue their behavior behind closed doors, remains to be seen. 

I suspect I know the motive, though, and public fiduciaries have every reason to remain vigilant.

Banks have joined asset managers in advocating for the destruction of the Texas economy.



Agriculture is the 
second largest industry in Texas, with one in seven Texans relying on agriculture for their livelihood.

The Net Zero Banking Alliance
[NZBA], of which many of the largest banks in the United States are members (and to be clear, even many of those who aren’t still claim to aspire to “net zero”), believe that farming and ranching are a problem. 

The NZBA commitment requires these banks to withhold loans to farmers who don’t meet impossible emissions-cutting targets, while pushing agricultural producers to adopt business practices that would put them out of business. 

This is a world view antithetical to what Texans believe, and it is actively working towards our destruction.



And finally
, the rest of the finance ecosystem, including financial advisors, proxy voting services, ratings agencies, etc. 

These firms all faithfully adhere to the ESG agenda, which seeks to undermine, and ultimately collapse, the economy of Texas.



As the Chairman of the SBOE,
I have a fiduciary role in overseeing the PSF in the long-term best interests of our citizens and the children we have the responsibility to educate.

…Today, that means speaking out - and setting down a marker.

Wall Street is powerful. But so are the fiduciaries who oversee the trillions of dollars of public investments across the country. 

If you share my concerns that weaponized ESG-infected Wall Street is using the money you have a duty to protect against the interests of your state - it’s time to speak up.

It’s time we work together to depoliticize finance, focus on returns, and ultimately protect our citizens.