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September 5, 2024 16 mins
Sal Nuzzo, Executive Director of Consumers Defense, explained how ESG is impacting your life right now and ways to push back (trust us... you need to push back). It is impacting your wallter now and in the future. 
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Episode Transcript

Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:20):
Here we go.

Speaker 2 (00:20):
It's the third and final hour Thursday, Always Fun here
on the Morning Show with Preston Scott and over there,
I'm sorry, I just I just look at the way
he's dressed each and every day, and it's it's it's
a it's a highlight reel under itself. Lose Can you
see over there in Studio one A. I'm here in
Studio one B, and I'm joined by our good friend

(00:43):
Sal Nowso with Consumers Defense, and.

Speaker 1 (00:46):
My man is styling over there, don't you don't you
knock that? Yeah?

Speaker 2 (00:50):
Not just anyone can wear the make America Great hat
hat again. We just make America Great again hat with
a do rag underneath it.

Speaker 1 (00:59):
In a sport Yeah. Yeah, I'm I mean, much better
than what I showed up in.

Speaker 2 (01:04):
Well, let me tell you, he just he's got his
own style because it's it's not grunge, it's not goth,
it's not bohemian.

Speaker 1 (01:11):
It's not it's it's Jose Can you see it's him?

Speaker 2 (01:14):
Yeah, it's it's can you.

Speaker 1 (01:15):
See love it?

Speaker 2 (01:17):
How you been?

Speaker 1 (01:18):
I've been great, super busy, glad to be in talking
about something other than the state legislature.

Speaker 2 (01:24):
Yeah, let me you know, I went deep dive in
my analysis and I said, you know, Sal's executive director
of Consumer's Defense and it's all about defending consumers.

Speaker 1 (01:39):
How real deep there? How to do? You nailed it?
That show over mission statement, right, walk off solid.

Speaker 2 (01:49):
Now let's break it down there, because we've only given
a brief overview Consumer's Defense. If you were to describe
to people, Okay, here's what we are dedicated to do.

Speaker 1 (02:00):
Yeah, what is it. Well, we're a nonprofit policy organization.
We are the nonprofit policy arm of an organization called
Consumers Research, which is the oldest consumer protection group in America.
It's not a government agency, it's a nonprofit what they
call a five oh one C three. And our mission
collectively is to work across the United States and at

(02:23):
the state level, because, as I've mentioned to you many
many times as we've unpacked Florida's legislature, the state legislatures
are the institutions with the most pronounced impact on individuals' lives.
And so our goal is to advance policies that protect consumers, markets,
and economies in the economy from basically the worst ideas

(02:47):
of the left. And the way that we do this
is there's five basic strategies. So there's research, policy research,
there's policy advocacy, and then there's grassroots engagement kind of
activating people at the ground level to be a part
of the solution. There's media engagement, which this is absolutely
a part of. And then there's litigation. And I'm not

(03:09):
an attorney, so there are folks that do that, but
those are the five avenues in which we kind of operate.

Speaker 2 (03:15):
Do you zero in on, for example, Florida would make
sense one of the largest economies as a state in
the world. Yep, Texas would make sense. In California, New York, Illinois.
Do you focus on the big states? Are are all fifty important?

Speaker 1 (03:30):
I would say it's an amalgam of the big states
where we are either doing our best to advance good
ideas or try to beat back really really bad ones.
And then there are the rest of the states where
you've got either a Republican trifecta where you've got a
Republican governor and a Republican legislature, and there's more of

(03:52):
an environment in an atmosphere to advance some good ideas.
So we're doing a lot in states like oh Lahoma
and in Kansas and in Ohio and others where the
landscape works to advance some good policy. And you know, namely,
we've talked about ESG on the show many times. Sure,

(04:15):
the focus of both Consumers Research and Consumers Defense probably
over the last three to five years, has been in
combating ESG at the state level.

Speaker 2 (04:24):
I want to talk more about that with me sal News,
executive director Consumers Defense, and you can find out more
just Consumers Defense dot com. And I'm going to even
ask him how you might make a difference in linking
up with what they do, how you can help advance
the cause, because trust me, there's a cause. Has the

(04:44):
emergence of ESG as a really big deal taken anything
away from what you'd otherwise be doing.

Speaker 1 (04:56):
You know, it's a good question, And honestly, I don't know.
I was brought in because the threat from ESG and
the momentum it had gotten over the last three to
five years had gotten so strong. So I'm not sure.
But I would really call ESG, which the letters stand
for Environmental, Social and Governance right, and I would say

(05:20):
it's been the least known and least understood type of
scheme that the left has used, and it's really undermining
the constitutional process.

Speaker 2 (05:32):
Well, because people hear the letters and then they hear
what the acronym stands for and they go out, I'm out,
that's more than I want to be involved in. I'll
let other people deal with that, and I think the
average person checks out. But that gets to the next
level of my analysis of consumers defense. And I said,
when it's all said and done, you are protecting a

(05:54):
consumer's wallet. Yes, absolutely, And so explain how ESG is
a acting attacking a listener's wallet. Well, first off, I
would say the idea of the concept is it's a
way for the left to advance the policy objectives that
they have without going through that pesky process known as

(06:15):
making laws in generating reforms. So the way that this
works is it's an alliance of sorts. It's an alliance
between large asset management companies and big banks and the left.
So on the asset management side, you have these huge
companies like Blackrock and Vanguard and State Street. You've probably

(06:36):
heard those names before. If you have a four toh
one K or if you have a pension program. So
Blackrock is the largest asset management company in the world,
you give them your money to invest for you if
you have a four to one K or if you're
in a state pension program, and their goal is to
generate returns. Now, they currently have over ten trillion dollars

(06:58):
in assets under management with a t trillion dollars. So
what they do is they have partnered along they have
partnered with big banks, and in a lot of cases
they own a share of these banks, and they're able
to exert control over corporations and ultimately all of us
in ways that are completely outside the realms of what

(07:21):
should be allowed in a free enterprise or free market economy.
And there's a number of ways that it works through
either the E or the S.

Speaker 1 (07:29):
Or the g N. Doesn't it add up to bullying though, Yeah,
it absolutely is. And so if you look at the
E the environmental you have the LEFS goal of enacting
the Green New Deal, it's a goal morally and economically
bankrupt and it never gains a whole lot of traction
in a substantive policy debate. So you enter Blackrock into

(07:50):
the equation. Now, they should make their money by investment
decisions based solely on risk and reward. What's going to
generate the most profits for my four one k. Instead,
what they're doing is they're investing your money, my money
in companies based on a scoring system that will rank
this company on how well it kind of how well

(08:15):
it operates in a climate change battling scenario.

Speaker 2 (08:18):
Are they carbon neutral or buying carbon credits?

Speaker 1 (08:21):
Or do they have a diversity equity and inclusion policy,
And they're basing investment decisions on these completely non investment
related factors.

Speaker 2 (08:34):
And when it comes to the diversity, equity and inclusion component,
it means it affects like, for example, company A better
have in their downline, some DEI companies that have hired
broadly and all of these things. It doesn't matter whether
they're efficient, it doesn't matter whether they deliver their products effectively,
It doesn't matter if they make their products well. What

(08:56):
matters more is that DEI score right exactly. So it
impacts bottom line profits because they the company may stink
because they've got bad suppliers, but their suppliers have DEI
going for them.

Speaker 1 (09:08):
You got it. And here's another way where it fits in,
because we haven't yet tied in how the banks function
in this equation. So the best way to do it
is with an example. You've got a kind of a
canary in the coal mine situation coming up with farmers
in agriculture. Farming requires a lot of banking capital, loans,
bridge loans, lines of credit, and in Europe you have

(09:31):
banks lending money to farmers and ranchers and setting the
interest rates not on the risk factors, but on if
one rancher has more cattle because cattle emit methane which
causes climate change, or incentives you get a better rate
if instead of buying the diesel tractor, you buy an
electric tractor. And if you talk to a farmer, they

(09:54):
will tell you that electric tractors are one of the
stupidest ideas you could have in agriculture.

Speaker 2 (10:01):
Is it difficult soun for this issue to become top
of mind awareness issue for people.

Speaker 1 (10:10):
It's certainly a challenge. And one of the reasons is
because it won it's a long game, and there are
forces at work on the left in China, and then
you're doing really well and they do and they play
the long game better than better than the right does,
I will freely admit. And the other part is it's wonky,
it's in the weeds. It requires a lot of education

(10:32):
to get not even grassroots, but even policymakers to understand
the dynamics of it. Florida caught on really quick, a
credit to the legislature of the governor and actually did
something with some teeth. Yes, HB three from two sessions
ago was phenomenal. But what we've seen is it took
about three years, and in the third year of action,

(10:53):
we saw seventeen or eighteen more states past something, and
so I think the grand total is twenty seven states
at this point have passed some degree of anti ESG legislation,
and it could be as robust as what Florida did.
Texas was very targeted, just going after companies that boycott

(11:14):
the oil and gas industry and everything in between. And
it not only involves that, but there's elements of it
to the banking sector to protect people from being debanked
where your bank decides, well, we don't like your philosophy
or we don't like where you're directing your money, and

(11:34):
so we're going to close off our accounts with you,
and you're not going to be able to bank with
us anymore.

Speaker 2 (11:38):
I feel as though with consumers defense, you are facing
in a way what I face, and what I face
is people not taking ownership of the issues and the
knowledge that goes with those issues and making it their own.
But just sort of I'll listen to Preston, I'll listen

(11:59):
to Clay and Buck, I'll listen to Glenn. We'll let
consumers defense and Justin Haskins, we'll let those people fight
the fight on ESG. Boil this down and distill it
to where what what should people be doing or be
aware of that they can actively maybe even participate in
to make a difference.

Speaker 1 (12:19):
And that's really probably the most important question on ESG
because of the fact that it's so wonky, it needs
a lot of grassroots engagement to really move the needle
and get it to the top. I would suggest a
couple of things. One is, individually, if you have a
four oh one K, if you're in the private sector
and you have investments mutual funds, look at where those

(12:42):
funds are going or where those moneies are going. If
you see the name black Rock, Vanguard or State Street
in your portfolio and where your investments are, you might
want to start asking more questions about what are the
underlying investment strategies of those funds and make informed decisions

(13:02):
on where your own money is going.

Speaker 2 (13:05):
Are those just picking on those three? Are those investment houses?

Speaker 1 (13:09):
Now?

Speaker 2 (13:09):
I know Blackrocks aware of the pushback, They're very aware.
They've come out and admitted they're aware of this without
saying they're going to do anything differently. Are they using
now more covert strategies to kind of buffet or buffer
themselves from it? Absolutely, so, they've stopped using the term
ESG a whole lot. The underlying strategies are, to use

(13:34):
the phrase of Larry Fink, who runs Black Rocks, right,
they have woven ESG into the entire DNA of their
investment philosophy. So even the funds that don't have ESG
specifically articulated oftentimes are using ESG strategies in them. So

(13:55):
where do you see that where I mean, do they have?
Is it in a philosophy statement of the investor of
whoever's managing the money? I mean, because there are buzzwords, yep,
And then the buzzwords tend to stand out.

Speaker 1 (14:08):
So this one came from a call that Larry Fink
has to all of his clients and investment people from
back in twenty eighteen or twenty twenty, I believe, oh boy,
and he admitted that ESG was woven into the DNA
of the entire investment portfolio of Blackrock. Now, as a

(14:30):
consequence of that, you now have two states, Mississippi in
March and Indiana last week that have filed suit against
Blackrock because they're claiming the company engages in fraud if
they're claiming to not have to have mutual funds that
are not ESG related and the state pension moneies can

(14:52):
go into those they in actuality do not. The state
is investing money or Blackrock has that money, and regardless
of if it says ESG or not, it has it
woven into the DNA of.

Speaker 2 (15:04):
So that old statement could come back to bite him
in a court trial.

Speaker 1 (15:07):
It absolutely is already coming back and it's going to
go through the litigation process, administrative law.

Speaker 2 (15:15):
So when it comes to what an average listener, you know,
if they're invested, here's what you look for. Any other ways, Yeah,
I shameless plug, Yeah, yeah, that's why you're here. I
would direct you to consumers Research dot org, which is
the C three website that is the most robust side

(15:36):
of our network and our partners, where you can get
more information, you can monitor what's going on. You can
email me to get on a regular blast of where
we're going to be, the articles coming out, more information
of kind of of the kind, and then I would say,
get engaged, get plugged into the groups that are meeting

(15:57):
on the conservative end. One of my tasks is I
speak at small groups all over the country through partnerships
and whatnot to kind of bring grassroots people into a
place where they're educated on the topic and can kind
of move ahead and move forward. Awesome, Thanks very much,
We'll see you again in a couple of weeks. Definitely

(16:18):
looking forward to it, all right. Salnuzo with Consumers Defense
and again Consumersresearch dot org is that landing page to
learn more about specific things that are going on and
stuff to keep on your radar. Twenty eight past
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