TO: Ron DeSantis
From: Bob Eccles
Copy: All the ESG haters
Subject: ESG at the University of Florida Investment Corporation
Happy Thanksgiving! You certainly have a lot to be thankful for, which makes me very happy for you.
Let’s start with your stunning re-election victory as governor with nearly 60 percent of the popular vote, 20 points ahead of your Democratic challenger. Big congratulations! You clearly attracted a number of independent voters and received a stunning 58 percent of the Hispanic vote compared to 44 percent the first time. Your strong performance in Florida is without a doubt one of the reasons why Washington Post puts you above Donald Trump (#2 [from whom I haven’t heard a single utterance of “ESG” or “Woke”—a sure sign his star is fading]) and Mike Pence (#3 is your biggest competitor in using ESG and Woke to get a nomination) in their poll of Republican Party nominees for the presidency. The Post wrote with admiration, “Florida’s governor’s stock has never been higher as he emerged from Election Day arguably the biggest GOP winner.”
And let’s not forget this impeccably executed, rosy yet disciplined piece of political theater art in which you charter two planes to send 50 illegal Venezuelan migrants to a summer resort in Martha’s Vineyard. In my home state of Massachusetts. No less from Texas! I’m guessing Gov. Greg Abbott is very jealous that you swooped in there, pulled them out from under his nose, and beat him to a guerrilla strike. I’m sorry I wasn’t there to greet them instead of you. I’ve been a little busy fighting for the other side in the ESG culture wars where you are one of, if not the MOST, leading general on the right flank.
It is in this context that I want to bring something to your immediate attention before I sit down to a nice Thanksgiving dinner with my family. I hope you have a good 🦃 too.
On August 26, 2022, you, with the support of other State Board of Administration (SBA) trustees, “passed a resolution directing Florida state fund managers to invest public funds in a manner that prioritizes the maximum return on investment for Florida taxpayers and retirees without regard to the movement’s ideological agenda.” for the Environment, Social Sphere and Corporate Governance (ESG). According to its latest report (July 1, 2020 – June 30, 2021), the SBA manages $199.6 billion in assets. It posted an impressive growth of $38.9 billion in assets under management, driven by a net income of 29.46%. Great job!
Apparently you think it will get even better if you take away that awful ESG thing. Since you are a governor, I think you can ignore the fact that ESG is about material risk factors that are important to the company’s profitability and shareholder returns. And that there are numerous empirical studies that support this.
Facts aside, there is a serious political issue that needs your immediate attention. I’m sorry to bother you with this on Thanksgiving, but I think you’ll be glad I did. Moreover, I have three useful tips.
Lucky for you, I recently came across the University of Florida Investment Corporation’s Environmental, Social, and Governance Policy Review. The review states that “as a fiduciary, UFICO has a duty to act in the best long-term interests of its investors in accordance with Florida’s Uniform Institutional Funds Prudent Management Act (FUPMIFA), which sets the standard of conduct in managing and investing. institutional funds. The main goal of UFICO is to maximize long-term risk-adjusted returns for its investors in order to advance their mission and, in particular, the core mission of the University of Florida.” I’m sure you don’t have a problem with this as you said something very similar about the SBA, stating that investment decisions “should be based on monetary factors only”.
Please make sure you sit down for what I have to tell you now. I don’t want the leading Republican presidential candidate to suffer a swoon. The UFICO review then states that “the purpose of this policy is to describe how UFICO integrates environmental, social and corporate governance (ESG) issues into its investment process to achieve its primary objective.” If you’re still with me, it will be even worse. “As a long-term investor, UFICO believes that risk management is critical to the investment process and our due diligence includes the manager’s consideration of material ESG factors that could affect their performance and/or risk profile over the long term.” Note that it says “material ESG factors”, not “ideological ESG factors.
Okay, here it is. UFICO directly contradicts you (THEIR GOVERNOR 😱) regarding ESG as you state that financial factors “do not include consideration of advancing social, political or ideological interests” and stipulate that SBA “cannot sacrifice investment income or take on additional investment the risk of promoting any intangible factors” when making investments or voting by proxy.
Here’s the catch. While you and your kind are engaging in a massive, well-funded, and pointless campaign to turn ESG into an ideological punching bag, the corporate and investment communities are trying to manage material risk factors. And you do everything you can to prevent them from doing so. To learn more about what ESG really is, if you don’t feel sleepy after eating your pumpkin pie, you might be interested in reading Mr. Pence and Friends’ ESG Oil and Gas Investing Study Guide. Not wanting to show any favoritism, I would also be happy to provide you with a tutorial. Even personal!
I also cordially invite you, your other SBA Trustees, and just about anyone you can think of to attend the free public webinar “ESG Hasn’t Wake Up, It’s Capitalism.” It is sponsored by the law firm K&L Gates. The panellists are my Republican buddy Dan Crowley and myself. Our moderator is Karisma Page. Both are partners in the firm. It will take place on November 29, 2022 from 11:00 am to 12:00 pm EST.
Okay, I admit that this was just a rhetorical device to advertise our webinar. I know you wouldn’t deign to have even the youngest employee on your payroll spend an hour of their time listening to a webinar. God forbid, they can really learn something! You are playing a much bigger game. run for president! This is where I think I can be of some good advice.
You must demand that William Reeser, Chief Executive Officer and Chief Investment Officer of UFICO, come to your office immediately for a deep and harsh self-criticism. Have him review the UFICO ESG Policy Review. Look him straight in the eye and say sternly, “Change the language to what we did with the SBA or something!”
Or something else? Well, it really is your choice. I don’t know if you, as governor, have the authority to fire Mr. Reaser. If you do, you must if he does not obey your command within 24 hours. In that case, I look forward to hearing from you as soon as possible about the repeal of the ESG UFICO policy. And I can’t find proof of this if I search the Internet. (I saved the PDF for historical record only.)
If you do not have such powers, exert public pressure. You have demonstrated that you are using the pulpit of intimidation very effectively. But what if Mr. Reaser does not bow the knee to your imperial will and show due respect? What if, in order to maximize UFICO’s long-term profits, he refuses to subdue himself and pay tribute to your campaign to destroy ESG and Woke in the Sunshine State?
Here again I can be helpful. Rent a plane and fly it to Bay State. If you don’t mind, sir, I actually prefer Nantucket Martha’s Vineyard, so please send him there. I will meet Mr. Reaser and invite him to a traditional New England milk pie at the very chic and exclusive White Elephant restaurant. I treat.
Mr. Governor, you cannot afford to fail here. You will look weak in the eyes of your anti-ESG comrades. One of them is next to you in the Post ranking. Who beat you by three months by publishing a letter dated May 26, 2022 in the organ of the Republican Party, Wall Street Journal. He made a clear case of good faith against the ESG, ominously noting that “ESG is a pernicious strategy because it allows the left to achieve things they could never achieve by voting or by competition in the free market. The ESG empowers an unelected cabal of bureaucrats, regulators and activist investors to evaluate companies based on their adherence to leftist values.”
Admit it. This is a much more powerful mobilizing language for an anti-ESG campaign than your rather level-headed technical language such as “don’t sacrifice investment returns or take on additional investment risk to promote any non-monetary factors”. Last tip. Have the Government Financial Officers Foundation make a short video for you, similar to the one they did with Our Money, Our Values - What is ESG? For the background, I wrote in enthusiastic terms about its mesmerizing Orwellian message and the quality of the production. You will love it. Though you won’t like the subconscious variety, fairness and inclusion theme that pervades it.
Mr. Governor, for the sake of your presidential ambitions, I urge you to act with readiness and root out UFICO apostasy.