Several asset managers leveraged two major Texas university systems’ endowment funds to advance anti-fossil fuel shareholder proposals in 2022 and 2023, according to a report from the conservative watchdog group American Accountability Foundation (AAF).
BlackRock-owned Aperio Group, Cantillon, former Vice President Al Gore-chaired Generation Investment Management, GQG Partners and JP Morgan Asset Management collectively manage approximately $4 billion for The University of Texas/Texas A&M Investment Management Company (UTIMCO) as of July, which handles the university systems’ endowments. Despite the company’s policy against it and Texas’ status as the leading crude oil and natural gas-producing state, UTIMCO’s asset managers backed over 150 shareholder resolutions under the environmental, social and governance(ESG) umbrella, including proposals that could undermine the oil and gas industry, according to documents AAF obtained through a public records request and shared exclusively with the Daily Caller News Foundation.
“Once again, woke ESG ideology has infected a public institution and hijacked its money for their own purposes. This is an outrageous betrayal of the public’s trust,” AAF president Thomas Jones told the DCNF. “[Republican Texas] Gov. Greg Abbott must take immediate action to end this nonsense. He must shake up the leadership at UT/A&M that let this happen and use his influence with UTIMCO to ensure that it never happens again.”
UTIMCO told the DCNF that the ESG and diversity, equity and inclusion (DEI)-related votes violate “a long-standing policy that prohibits using the endowments’ economic power to advance social or political agendas” and that a review found they consist of 0.3% out of around 45,000 proxy votes in recent years. The endowment manager added that it has since modified its guidelines after finding the violative votes and will impose them on all of its third-party investment managers before future proxy votes, and revoking voting authority for those that cannot follow them.
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The company’s asset managers voted in favor of a total of 159 shareholder proposals between them that include “racial and gender pay gap reports, efforts to defund conservative candidates and pro-business trade associations, radical climate policy, targeting of gun purchasers, and proabortion initiatives,” according to the watchdog.
UTIMCO oversees the largest public endowment fund in the U.S., managing over $76 billion as of Aug. 31.
“UTIMCO’s mission is to ‘generate superior long-term investment returns to support The University of Texas and Texas A&M University Systems,’ yet these votes endorse political agendas that run contrary to the Systems’ best interests,” American Energy Institute CEO and former Republican Texas state Rep. Jason Isaac told the DCNF. “By supporting proposals that harm American energy producers, UTIMCO’s fund managers are violating their fiduciary responsibility.”
Texas leads the nation in crude oil and natural gas production and in 2023 was responsible for 43% of crude oil output, according to the U.S. Energy Information Administration. However, AAF found many examples of UTIMCO’s asset managers voting in favor of proposals aimed at reducing greenhouse gas emissions (GHG) emissions and other actions to mitigate so-called climate change, which the watchdog alleges comes at the expense of producing value for investors.
For instance, at ExxonMobil’s May 2023 yearly shareholder meeting, Aperio Group voted in support of a proposal to recalculate its GHG emissions to account for the assets it has sold. The resolution asserted that “the economic risks associated with climate change exist in the real world rather than on company balance sheets” and argues that the investments ExxonMobil sells may lower emissions on paper but that they fail to actually help achieve the goal of keeping global temperatures from rising by 1.5 degrees Celsius — which is an objective of the 2015 Paris Climate Agreement — potentially exposing the company and its stakeholders to what it calls “climate risk.”
Some of Aperio Group’s clients have access to customize their individual proxy voting policy, according to BlackRock. BlackRock itself voted against this ExxonMobil proposal on behalf of most of its clients.
AAF’s “report on UTIMCO’s investment practices should alarm every Texan who values our state’s proud oil and gas industry,” Texas Railroad Commissioner Wayne Christian told the DCNF. “It’s outrageous to see Texas university investments being used to support radical ESG agendas, decarbonization, and dangerous policies like Net Zero and the Paris Accord, which threaten our energy independence and economy. We must put an end to the woke political agendas that undermine the very foundation of Texas’ success and ensure our investments align with the values of hard-working Texans.”
Moreover, at defense contractor Raytheon Technologies’ yearly shareholder meeting in May 2023, J.P. Morgan Asset Management backed a proposal urging the company to publish a report on efforts to reduce GHG emissions in alignment with the Paris Climate Agreement.
“Raytheon Technologies creates significant carbon emissions from its value chain and is exposed to numerous climate-related risks,” it states. “Failing to respond to this changing environment may make Raytheon less competitive and have a negative effect on its cost of capital and shareholders’ financial returns.”
Isaac told the DCNF that UTIMCO’s “managers are discriminating against fossil fuel” companies through ESG investing based on the definition of “boycott” in Texas’ Senate Bill 13, which Abbot signed in 2021 and the former representative said he helped create.
The bill defines boycotting energy companies as refusing to engage or ending business with a company involved in fossil fuels “without an ordinary business purpose.” It also specifies actions aimed “to penalize, inflict economic harm on, or limit commercial relations with a company because the company” does business related to fossil fuels and fails to “pledge to meet environmental standards beyond applicable federal and state law.”
Isaac added that the asset managers “should be held accountable and placed on Texas’ list of “financial companies that boycott energy companies,” which mandates Texas public investment entities subject to SB 13 “avoid contracting with, and divest from, these companies unless they can demonstrate this would conflict with their fiduciary duties.”
The S&P Global Clean Energy Index, which includes companies that engage in energy production from renewable sources, has fallen about 7% so far in 2024, while the S&P 500 Energy Index, which features many oil and gas companies, has risen close to 3% in that same time.
Louisianans’ pension funds were similarly leveraged to push climate-related proposals within publicly traded companies, the DCNF reported in April, based on another public records request by AAF.
“UTIMCO’s asset managers’ apparent promotion of leftist objectives, including ESG, is extremely troubling and contrary to Texas law banning boycotts and discrimination against fossil fuels. The legislature must exercise oversight and hold UTIMCO accountable,” Republican Texas state Rep. Brian Harrison told the DCNF. “Governmental bodies, including their proxies, should not pursue objectives that harm the Texas economy and go against our values.”
Cantillon, GQG Partners, Texas A&M and Abbot’s office did not respond to the DCNF’s requests for comment. Aperio Group, Generation Investment Management, JP Morgan Asset Management and the University of Texas declined to comment.
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President Donald Trump signed an executive order moving marijuana from a Schedule I to a Schedule III controlled substance, despite many Republican lawmakers urging him not to.
“I want to emphasize that the order I am about to sign is not the legalization [of] marijuana in any way, shape, or form – and in no way sanctions its use as a recreational drug,” Trump said. “It’s never safe to use powerful controlled substances in recreational manners, especially in this case.”
“Young Americans are especially at risk, so unless a drug is recommended by a doctor for medical reasons, just don’t do it,” he added. “At the same time, the facts compel the federal government to recognize that marijuana can be legitimate in terms of medical applications when carefully administered.”
Under the Controlled Substances Act, Schedule I drugs are defined as having a high potential for abuse and no accepted medical use. Schedule III drugs – such as anabolic steroids, ketamine, and testosterone – are defined as having a moderate potential for abuse and accepted medical uses.
Although marijuana is still illegal at the federal level, 24 states and the District of Columbia have fully legalized marijuana within their borders, while 13 other states allow for medical marijuana.
Advocates for easing marijuana restrictions argue it will accelerate scientific research on the drug and allow the commercial marijuana industry to boom. Now that marijuana is no longer a Schedule I drug, businesses will claim an estimated $2.3 billion in tax breaks.
Chair of The Marijuana Policy Project Betty Aldworth said the reclassification “marks a symbolic victory and a recalibration of decades of federal misclassification.”
“Cannabis regulation is not a fringe experiment – it is a $38 billion economic engine operating under state-legal frameworks in nearly half of the country that has delivered overall positive social, educational, medical, and economic benefits, including correlation with reductions in youth use in states where it’s legal,” Aldworth said.
Opponents of the reclassification, including 22 Republican senators who sent Trump a warning letter Wednesday, point out the negative health impact of marijuana use and its effects on occupational and road safety.
“The only winners from rescheduling will be bad actors such as Communist China, while Americans will be left paying the bill. Marijuana continues to fit the definition of a Schedule I drug due to its high potential for abuse and its lack of an FDA-approved use,” the lawmakers wrote. “We cannot reindustrialize America if we encourage marijuana use.”
Marijuana usage is linked to mental disorders like depression, suicidal ideation, and psychotic episodes; impairs driving and athletic performance; and can cause permanent IQ loss when used at a young age, according to the Substance Abuse and Mental Health Administration.
Additionally, research shows that “people who use marijuana are more likely to have relationship problems, worse educational outcomes, lower career achievement, and reduced life satisfaction,” SAMHA says.
Canadians are told dairy farmers need protection. The newest numbers tell a different story
Every once in a while, someone inside a tightly protected system decides to say the quiet part out loud. That is what Joel Fox, a dairy farmer from the Trenton, Ont., area, did recently in the Ontario Farmer newspaper.
In a candid open letter, Fox questioned why established dairy farmers like himself continue to receive increasingly large government payouts, even though the sector is not shrinking but expanding. For readers less familiar with the system, supply management is the federal framework that controls dairy production through quotas and sets minimum prices to stabilize farmer income.
His piece, titled “We continue to privatize gains, socialize losses,” did not come from an economist or a critic of supply management. It came from someone who benefits from it. Yet his message was unmistakable: the numbers no longer add up.
Fox’s letter marks something we have not seen in years, a rare moment of internal dissent from a system that usually speaks with one voice. It is the first meaningful crack since the viral milk-dumping video by Ontario dairy farmer Jerry Huigen, who filmed himself being forced to dump thousands of litres of perfectly good milk because of quota rules. Huigen’s video exposed contradictions inside supply management, but the system quickly closed ranks until now. Fox has reopened a conversation that has been dormant for far too long.
In his letter, Fox admitted he would cash his latest $14,000 Dairy Direct Payment Program cheque, despite believing the program wastes taxpayer money. The Dairy Direct Payment Program was created to offset supposed losses from trade agreements like the Comprehensive Economic and Trade Agreement (CETA), the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Canada–United States–Mexico Agreement (CUSMA).
During those negotiations, Ottawa promised compensation because the agreements opened a small share of Canada’s dairy market, roughly three to five per cent, to additional foreign imports. The expectation was that this would shrink the domestic market. But those “losses” were only projections based on modelling and assumptions about future erosion in market share. They were predictions, not actual declines in production or demand. In reality, domestic dairy demand has strengthened.
Which raises the obvious question: why are we compensating dairy farmers for producing less when they are, in fact, producing more?
This month, dairy farmers received another one per cent quota increase, on top of several increases totalling four to five per cent in recent years. Quota only goes up when more milk is needed.
If trade deals had actually harmed the sector, quota would be going down, not up. Instead, Canada’s population has grown by nearly six million since 2015, processors have expanded and consumption has held steady. The market is clearly expanding.
Understanding what quota is makes the contradiction clearer. Quota is a government-created financial asset worth $24,000 to $27,000 per kilogram of butterfat. A mid-sized dairy farm may hold about $2.5 million in quota. Over the past few years, cumulative quota increases of five per cent or more have automatically added $120,000 to $135,000 to the value of a typical farm’s quota, entirely free.
Larger farms see even greater windfalls. Across the entire dairy system, these increases represent hundreds of millions of dollars in newly created quota value, likely exceeding $500 million in added wealth, generated not through innovation or productivity but by a regulatory decision.
That wealth is not just theoretical. Farm Credit Canada, a federal Crown corporation, accepts quota as collateral. When quota increases, so does a farmer’s borrowing power. Taxpayers indirectly backstop the loans tied to this government-manufactured asset. The upside flows privately; the risk sits with the public.
Yet despite rising production, rising quota values, rising equity and rising borrowing capacity, Ottawa continues issuing billions in compensation. Between 2019 and 2028, nearly $3 billion will flow to dairy farmers through the Dairy Direct Payment Program. Payments are based on quota holdings, meaning the largest farms receive the largest cheques. New farmers, young farmers and those without quota receive nothing. Established farms collect compensation while their asset values grow.
The rationale for these payments has collapsed. The domestic market did not shrink. Quota did not contract. Production did not fall. The compensation continues only because political promises are easier to maintain than to revisit.
What makes Fox’s letter important is that it comes from someone who gains from the system. When insiders publicly admit the compensation makes no economic sense, policymakers can no longer hide behind familiar scripts. Fox ends his letter with blunt honesty: “These privatized gains and socialized losses may not be good for Canadian taxpayers … but they sure are good for me.”
Canada is not being asked to abandon its dairy sector. It is being asked to face reality. If farmers are producing more, taxpayers should not be compensating them for imaginary declines. If quota values keep rising, Ottawa should not be writing billion-dollar cheques for hypothetical losses.
Fox’s letter is not a complaint; it is an opportunity. If insiders are calling for honesty, policymakers should finally be willing to do the same.
Dr. Sylvain Charlebois is a Canadian professor and researcher in food distribution and policy. He is senior director of the Agri-Food Analytics Lab at Dalhousie University and co-host of The Food Professor Podcast. He is frequently cited in the media for his insights on food prices, agricultural trends, and the global food supply chain.
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