Capitalism Versus Social Activism

Have you ever wondered why some companies give up billions of dollars in revenue over social issues? Watch our video to learn more about how the asset management industry works and why your best interests might not be represented.

 

The largest asset managers in the world like Blackrock, Vanguard, and State Street, which control trillions of dollars from everyday people like you, use money they control to push social activism in corporate boardrooms across America. Investing, in our opinion, should be solely about driving shareholder value and not environmental, social, or governance factors (ESG), especially in non-ESG funds. Social activism within large investment companies can sometimes result in proxy voting that may not immediately benefit shareholders or investors in ETFs. This is because social activism often involves advocating for changes that align with certain ethical, environmental, or social justice principles, which may not always coincide with maximizing short-term profits.

 

For instance, an investment firm practicing social activism might vote for a company to adopt more environmentally friendly practices, even if these practices entail higher costs that could potentially lower the company’s short-term earnings and, consequently, the value of the firm’s investment in the company. This could be viewed as putting politics before profits, especially if the firm is making such decisions based on a broader societal or environmental agenda rather than purely financial considerations.

 

Don’t miss our latest video, which goes into why we believe in putting profits before politics and are always seeking to put your best interests first with any investment decisions we make on your behalf.

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