WOKE WEDNESDAY: S&P ditches ESG (but doesn't), AA gets sued for ESG (but isn't), Missouri bans ESG through paperwork, and Zoom wants its employees to avoid its AI

LIVE from the Committee to destroy all ESG scores because they murder puppies, it’s the podcast that puts the “w-o-k-e” in “cowpoke”, BUSINESS PANTS! Featuring me, Analyst-Hole Matt Moscardi!  Damion is at the cleaners today! In today’s S&P did not score this episode called August 9, 2023: an alternative democracy note, an anti woke roundup, and a pastiche of business news stupidity!

Our show today is being sponsored by ESGauge, your ESG data solutions provider.

Paul will be stopping by later to talk about some stuff. 

MATT1

Alternative Democracy roundup

1. IN FAKE PUBLIC COMPANY NEWS: Dutch Bros names Christine Barone CEO

1. Joth Ricci will step down at the end of the year following a transition period. The move comes just months after Barone was brought in as the drive-thru beverage chain’s president.

2. FFA: Who cares? Co-founder and Executive ChairTravis Boersma controls 67% of influence; 76% of voting power:

1. 4 classes of voting stock!

1. Class A 1 vote per share

2. Class B 10:1

1. Travis owns 100% of these

3. Class C 3:1

4. Class D 3:1

2. TSG Consumer Partners 19%

1. There’s 5% for the public!

3. Female power gap: 44/9

3. Share price $76 October 2021; currently under $28

2. IN “THE ANTI-ESG REEEEEEALLY LOVE CHINA” NEWS: Proxy proposal season is over, here’s ESGauge’s roundup

2. The Conference Board using ESGauge data notes that anti-ESG proposals are getting about 2% of the vote compared to 20% for ESG related proposals

3. They did not note that both are losing, and no one cares.  Speaking of no one cares…

Anti woke roundup:

1. IN “TWO YEARS LATER NEWS”: Provider of anti-woke ETFs closes funds because of low inflows

1. 2nd Vote Funds, an asset manager and index provider, plans to liquidate the two ETFs it created in 2020 for conservative investors, according to the company.

2. The $30.3mn “2ndVote Society Defended” and the $19.3mn “2ndVote Life Neutral Plus” ETFs closed to investors on August 3, the company confirmed. The funds have stopped trading on Cboe.

3. The “Society Defended” ETF screens out companies “that oppose 2nd Amendment rights, border security, civil society or support for law enforcement”, according to the manager’s website. The “Life Neutral Plus” ETF excludes investments in companies that support abortion.

4. The ETFs failed to attract enough assets to maintain research and operations, said David Black, chief executive and founder of 2nd Vote: “There is an overall failure in either our messaging or a commitment by conservatives and Christians to actually take meaningful steps to counter the successful radical ESG/woke/leftist agenda,” Black said. He added that there were no plans to create another ETF at this time.

2. IN OTHER “TWO YEARS LATER” NEWS: Ratings agency S&P Global stops grading borrowers’ ESG credit risk amid political backlash over ‘woke capitalism’

1. Credit ratings agency Standard & Poor’s has ditched numerically ranking corporate borrowers on their ESG risk amid a broader debate over ethical investing. 

2. The ratings division at S&P Global had attempted to boil down each of the three ESG risks to a number on a scale of one to five.

3. Yet just two years after introducing the ratings, the team announced the move had not been accepted by its customers.

4. S&P Global Ratings said it will continue to provide analysis of the credit risks stemming from ESG-related issues, they just won’t be given a simple grade. 

5. “After further review, we have determined that the dedicated analytical narrative paragraphs in our credit rating reports are most effective at providing detail and transparency on ESG credit factors material to our rating analysis,” the company said. 

3. IN “IF YOU CAN’T BEAT THEM, MAKE THEM DO TONS OF PAPERWORK” NEWS: Missouri’s secretary of state reins in environmentally minded investing

1. After the General Assembly failed to pass any legislation putting restrictions on ESG investing, Secretary of State Jay Ashcroft introduced a rule to create parameters for banks and investors.

2. But now, Secretary of State Jay Ashcroft has used unusual powers of his office to create new restrictions around investing with a climate sustainability or social justice component and how banks can practice it. 

3. Ashcroft says his rule is the first of its kind, placing Missouri on the cutting edge of how some states might think about regulating ESG, or “environmental, social and governance,” investing. The practice takes into account social concerns and personal beliefs. 

4. The rule, which took effect at the end of July, requires financial advisers and institutions to have clients sign disclosure forms when an investment may consider ESG scores or prioritize elements that may not yield maximum profit.

5. Ashcroft, a Republican running for governor, said his rule is directed at investors who are “going to make a discretionary trade recommendation, and that recommendation is wholly or in part based on something other than getting the maximum financial return. They need to disclose that and get approval,” he told The Beacon in an interview.

6. son of former U.S. Attorney General John Ashcroft: Mr. Racial Profiling/Civil Liberties disaster and Lady Justice $8,000 drape man

1. Jay Ashcroft argues his proposed restrictions on "non-age-appropriate materials" in libraries will give parents more power over what their kids consume. Library administrators say the rule would force them to take on a “big brother status,” and threaten equal access to information for all children.

2. Additionally, the rule would restrict the purchase of materials that appeal to the “prurient” sexual interests of any minor, and prevent library employees from allowing anyone under the age of 18 to access "any material in any form not approved by the minor's parents or guardians."

4. IN “GAPING HOLE” NEWS: American Airlines Lambastes Suit Over ESG Funds in 401(k) Plan

1. The first lawsuit over the use of ESG in a 401(k) has a few gaping holes — most notably that the lead plaintiff in the proposed class action wasn’t invested in any of the funds in question, defendant American Airlines said.

2. In a motion to dismiss filed Friday, the airline also noted that the investment options at the center of the complaint are not on the $27 billion plan’s menu — they are only available through a self-directed brokerage account. The company was sued in June for allegedly breaching its fiduciary duties under the Employee Retirement Income Security Act in connection with numerous ESG-themed funds available to participants.

3. The lead plaintiff for the proposed class, pilot Bryan Spence, “seeks to insert himself into the ongoing, politicized debate over the wisdom of ESG-themed investing. But this is a case without a controversy,” the airline stated in its motion to dismiss. “Plaintiff does not allege that he has allocated any portion of his plan account to the challenged funds he lists in the complaint, or to any non-ESG investment options that happen to be sponsored by Challenged Managers with objectionable proxy-voting policies. Nor could he, as he has never invested either in any of the 25 funds he identifies in the complaint as ESG funds or in any investment options sponsored by the challenged managers.”

5. IN MORE “GAPING HOLE, BRYAN SPENCE” NEWS:

1. Proving this is all kabuki theater, Spence is the same pilot who sued the US federal government over COVID vaccination requirements for pilots in 2022

2. Lawsuit was brought on religious grounds and claims:

1. Plaintiffs’  religious beliefs generally  fall into the  following categories:  (1) opposition to abortion  and the  use  of  fetal cell lines in  development  of the  vaccine;  (2) belief  that  the  mRNA  technology  utilized  in  some  COVID-19  vaccines usurps  God’s creation of the human genome; and (3) that the body is a temple, and taking the vaccine would defile that temple. 

3. Meanwhile, just to be in the Air Force, the US military mandates 17 different vaccines that must be taken

4. Just the COVID one was a problem

6. IN “YOU CALL THIS HOT?” NEWS:

1. Arizona Republicans Don’t Want to Hear About the Deadly Heat Wave

2. Every single day of July had reached 110 degrees or hotter, demolishing the previous record for the longest 110-plus-degree streak that Phoenix — nicknamed the Valley of the Sun for a reason — had ever seen. 

3. Some conservatives suggest thermometers, like past vote counts, are rigged because they’re placed at the sun-scorched asphalt airport. 

4. The campaign account for failed GOP gubernatorial candidate Kari Lake, for example, accused Democratic Gov. Katie Hobbs and Democratic Rep. Ruben Gallego of “pushing mass hysteria in an effort to declare a climate emergency” and blamed the heat-related deaths on “the METH their policies allow to flow freely on our streets.”

5. One of Arizona’s most vocal heat-skeptical lawmakers is GOP state Rep. Justin Heap. “Apparently the national media has decided we are all insufficiently frightened about climate change so it’s time to portray normal summer heat as the apocalypse,” he wrote recently. 

Business news comedy roundup:

1. IN “DUH” NEWS: WeWork warns it has 'substantial doubt' about whether it can keep going as a business

1. The company reported a loss and a decline in memberships in its second-quarter earnings.

2. Still, its CEO said WeWork is confident it can continue to meet the needs of its customers.

3. Meanwhile, Adam Neumann is currently worth $2.2bn according to Forbes

2. IN “ALSO DUH” NEWS: Top Tech CEOs Got More Money Right Before Layoffs, Data Shows

1. Alphabet CEO Sundar Pichai took home total compensation with a worth over $225 million in 2022, the same year that Alphabet announced its intention to cut 10,000 employees amid a wave of layoffs in tech.

2. That hike in pay for Pichai marked a 3,474% increase over the previous year, but it wasn't the only truly massive boost in compensation for tech CEOs at companies that also drastically slashed their workforce this year and last year.

3. CEOs at Meta, Microsoft, Uber, and Salesforce are also among those to make large personal gains while delivering short-term boost through one or more large rounds of layoffs, says data from a new analysis.

4. The facts, analyzed by ABC News using data from research firm Equilar, show similar trajectories for a handful of the biggest tech CEO compensation packages and layoff plans during 2022 and this year.

3. IN “THE SANDWICHES AREN’T EVEN THAT GOOD” NEWS: Almost 10,000 People Willing To Change Their Legal Name To ‘Subway’ For Free Sandwiches, Company Says

1. Subway will select one winner from those nearly 10,000 people to give $50,000 in gift cards, as well as $750 to cover the legal fees associated with the name change, according to the contest rules.

4. IN “MAYBE THEY DON’T HAVE ZOOM FATIGUE, THEY JUST ARE AVOIDING AI SPYING ON THEM” NEWS: Zoom has “Zoom fatigue,” requires workers to return to the office

1. Zoom surprisingly decides its teams are more effective working in-office.

2. A video-conferencing company might be the last business anyone would expect to force employees to return to the office. That's why a series of shocked reports followed Zoom's announcement that any employees living "within 50 miles of a Zoom office" must now work in the office "at least two days a week."

3. Starting this month and continuing through September, Zoom's decision to bring employees back to offices could impact many of the company's 7,400 employees, The New York Times reported.

4. Facing backlash, Zoom says it won’t use your videos or chats to train AI without consent

1. The video-conferencing platform was doing damage control on Monday after its updated terms of service went viral for the wrong reasons.

5. Rhetorical question alert: they announced this the same week they quietly changed their terms of service to spy on all Zoom calls for the purpose of training AI - coincidence?

5. IN “FIRST THE GAYS, NOW GAMBLING - DISNEY DOES HATE JESUS” NEWS: ESPN launches sportsbook in partnership with Penn Entertainment

1. Penn Entertainment is partnering with Disney’s ESPN to rebrand and relaunch its sportsbook as ESPN Bet.

2. The move comes as ESPN has been exploring further moves in the sports-betting space in recent years.

3. Penn is rebranding the Barstool Sportsbook as ESPN Bet, and will be divesting its stock in Barstool Sports.

ESPN plunges into sports betting in deal that is complicated by parent Disney trying to preserve its family-friendly image