On Sep 23, 2024 a report was issued from the American Accountability Foundation to interested parties on the issue of “The University of Texas/Texas A&M Investment Management Company’s (UTIMCO) Asset Managers are Supporting a Woke ESG Agenda”
“The American Accountability Foundation is a non-profit government oversight and research organization that uses investigative tools to educate the public on issues related to personnel, policy, and spending. AAF deploys aggressive research and investigations to advance conservative messaging, rapid response, and Congressional investigations; while heavily scrutinizing politicians and establishment organizations, policies, and projects.”
The report laid out the ways that Woke polices were still being implemented in these Texas Universities and how it was impacting the lives of Texans and students.
Below was their assertion
RESEARCH IMPACT: The research report below details the impact of ESG advocacy on University of Texas/Texas A&M Investment Management Company (UTIMCO) endowment funds.
The research reveals that five asset managers for UTIMCO — Aperio Group, Cantillon, Generation Investment Management, GQG Partners, and JP Morgan Asset Management— are promoting:
• Decarbonization policies that could negatively impact the Texas energy industry.
• Divisive reports on racial justice and racial equity that could stigmatize and disadvantage white men, Asians, Jews, and other groups that may be disfavored by left-wing groups.
• Efforts to defund conservative groups and candidates that represent small businesses and mainstream Texans.
• Attempts to target gun and ammunition purchasers.
• Pro-union policies. All told, this report identifies 159 votes cast by UTIMCO’s asset managers in 2022 and 2023 at the annual shareholder meetings of public companies that advocate that companies adopt a woke, pro-ESG agenda.
A main question in the report was “How the ESG Movement Uses UTIMCO Endowment Funds to Push a Woke Agenda?”
The report further highlights how ESG is leading the initiatives with investment firms
Excerpt from report:
“The primary tool used by the ESG Movement to advance their left-wing agenda in corporate America is the shareholder resolution. Each year at the annual shareholder meetings of public companies, shareholders can put forward resolutions to force action by corporate boards and management. While shareholder resolutions have typically been used to further good corporate governance practices and to maximize returns for shareholders, the ESG Movement has co-opted the shareholder resolution process to force companies to implement DEI, anti-oil and gas climate policy, and other radical social policy.
The mechanism is simple, liberal groups such as left-wing non-profits, unions, progressive state treasurers, and individual liberal activists purchase a de minimis number of shares in a public company for the purpose of qualifying to put forward a pro-ESG shareholder resolution.
Large investment management firms and other institutional investors such as pension funds and endowment funds then use the stock holdings in the large investment funds they manage to vote in favor of the pro-ESG shareholder resolutions.
Importantly, UTIMCO allocates some of its assets to investment managers that endorse the ESG agenda and have used UTIMCO’s assets to push a woke agenda.
These five asset managers – Aperio Group, Cantillon, Generation Investment Management, GQG Partners, and JP Morgan Asset Management – combined manage $3.976 billion for UTIMCO, according to an email AAF received in response to a Public Information Act request:
In response to another Texas Public Information Act request asking for the proxy voting policies UTIMCO entered with each of these asset managers, UTIMCO provided the following response, which reveals that, with minor variations, UTIMCO (the “Investor”) has required that each asset manager “exercise its reasonable judgment” with regards to proxy voting. We believe that this report shows that these asset managers are not exercising “reasonable judgement,” but instead, using UTIMCO’s funds to further the left-wing, pro-ESG agenda. “ end of excerpt
In the end UTIMCO did address this concern in a statement to the Texas Senate Committee
Excerpts from Texas Scoredcard
On October 17, Richard Hall, president, CEO, and CIO of UTIMCO, spoke at a Texas Senate Committee on State Affairs hearing on the entity’s policies regarding proxy voting.
“UTIMCO’s investment policy is set by the UT System Board of Regents,” Hall said, emphasizing that the policy is very clear.
“UTIMCO should vote proxies in a manner consistent with the unique role and mission of higher education as well as for the economic benefit of the endowment,” Hall said. “UTIMCO shall not invest the endowment to achieve temporal benefits of any purpose, including use of its economic power to advance social or political purposes.”
UTIMCO’s investments are managed by third-party firms, which have the authority to cast proxy votes. However, this authority is contingent on adherence to proxy voting policies.
“However, in the last several years we have seen an increasing number of shareholder initiatives seeking to use the proxy voting process to achieve social or political outcomes rather than economic outcomes that enhance shareholder value,” Hall said. “This was enabled by regulatory changes by the U.S. Securities and Exchange Commission in late 2021.”
Hall later said in his testimony, “I’m not happy with those votes. UTIMCO will do better.”
UTIMCO has been dedicated to improving policy guidelines, Hall continued. The most recent policy provision involves letting company managers and directors determine what is most likely to increase the value of a company and requiring that shareholders vote according to those recommendations. Hall said UTIMCO has begun implementing those guidelines in advance of future proxy votes.
“We’ve made it clear that any manager who does not agree to vote UTIMCO shares in accordance with these guidelines will lose the authority to vote UTIMCO shares,” Hall said.
UTIMCO is also considering pulling proxy voting from third-party managers altogether. To do this, Hall said, UTIMCO would have one of the nation’s leading proxy advisory services serve as an administrator and assist in implementing voting guidelines.” End of excerpts.
ITIMCO’s mission statement is
Created in March 1996, The University of Texas/Texas A&M Investment Management Company (UTIMCO) is the first external investment corporation formed by a public university system and oversees investments for The University of Texas and Texas A&M Systems. UTIMCO’s mission is to generate superior long-term investment returns to support The University of Texas and Texas A&M University Systems as they provide world-class teaching, push the boundaries of discovery, and achieve excellence in patient healthcare for the people of Texas and beyond. UTIMCO’s vision is to strive to be the world’s leading endowment fund, making a lasting positive impact on the future of Texas and beyond.
