The ESG Assault on America
Trish Regan is one of America’s most recognized financial journalists and digital media hosts. An award-winning reporter, author, television personality, and speaker, Trish is a leading economic and political thought leader who helps viewers to better understand the most critical issues facing the economy and American business today. With extraordinary access to newsmakers and industry sources, as well as a knack for anticipating opportunities and risks in investing, Trish leverages her knowledge of how the mainstream media works to enable subscribers to best understand the information moving markets.
Trish is the Co-Founder and Executive Editor of 76research. She is also the founder, owner, and host of the daily livestreamed Trish Regan Show with more than 16 million views per month. Prior to founding 76research with longtime friend Rob Hordon, Trish anchored some of the most highly rated financial programs at America’s most noted financial networks including CNBC, Bloomberg, and most recently, Fox Business News.
Throughout her career, Trish has interviewed numerous heads of state, including multiple U.S. Presidents, foreign leaders, Fortune 500 CEOs and other institutional, charitable, and government leaders.
Trish credits her start in journalism to her fifth grade position as school correspondent for her local New Hampshire newspaper. But, while Trish showed an early interest in reporting and writing, it wasn’t until years later that she chose to make journalism her career. In fact, she originally intended to pursue a career in finance and worked as an analyst in emerging debt markets at Goldman Sachs while a student at Columbia University. Fluent in Spanish, Trish focused primarily on Latin American sovereign debt markets including Argentina, Mexico, Venezuela, and Brazil, but when Bloomberg Television offered her an opportunity to work as a correspondent, she made the jump into financial media.
Beginning at Bloomberg in 2000, Trish was on the front lines as the dot-com bubble burst. She covered its aftermath from Silicon Valley and San Francisco as a correspondent at MarketWatch before moving back to New York to work as a correspondent for CBS News. In 2006, Trish returned to her financial roots as an anchor on CNBC’s top-rated daily markets program The Call where she reported on the 2008 financial crisis in real time. While an anchor at CNBC, Trish also reported business news for NBC's Nightly News and The Today Show. In addition, she produced and hosted the two most highly rated documentaries in CNBC's history – Marijuana Inc and Marijuana USA, which investigated a massive and fast-developing underground industry. Trish predicted that industry would soon become mainstream in her book Joint Ventures: Inside America's Almost Legal Marijuana Industry, published by Wiley & Co. in 2010.
In 2011, Trish went back to Bloomberg Television to anchor the network's afternoon market close coverage as host of Street Smart with Trish Regan. While at Bloomberg, Trish was the network's main political anchor for all political television coverage of the 2012 election, including both the Republican and Democrat conventions and the election itself. From 2013 through 2016, Trish also worked as a front-page economic columnist for USA Today, writing on the biggest trends in business, markets and the economy.
In 2015, Trish left Bloomberg Television to join Fox News and Fox Business as the anchor of her new program The Intelligence Report with Trish Regan during FBN’s market hours. She would later move to an evening program and become the only woman in cable TV at that time to host a primetime show. Trish Regan Primetime grew 8pm ratings to a level never before seen at Fox Business.
While at Fox, Trish Regan also anchored two Republican Presidential debates – making history as part of the first all-woman team, with colleague Sandra Smith, to anchor a Presidential debate. She also appeared as an economic and markets contributor to all Fox News programming and was also a guest anchor on Cavuto, Fox and Friends, The Five, and primetime programming. In addition, Trish anchored all primetime coverage of the 2016 Democrat and Republican conventions for Fox Business and was a co-host alongside Neil Cavuto, Maria Bartiromo, Lou Dobbs and Stuart Varney for the network's main political events. Trish left Fox in 2020 and began work on the creation of her own digital media enterprise which debuted in August 2020. Her focus now is her own program and 76research, although she still appears regularly on other platforms both in cable news and in digital media.
Trish graduated with honors from Phillips Exeter Academy before going on to study opera at New England Conservatory and graduate cum laude with a degree in history from Columbia University. While at Exeter, Trish was the first-place winner of the Harvard Musical Association’s Competition for Excellence in Music, becoming the first singer to win the top prize since the organization was founded in 1837. She later studied opera and German at The American Institute for Musical Studies in Graz, Austria. Her operatic singing skills enabled her to represent her home state as Miss New Hampshire in The Miss America Pageant, where she won the talent competition and the first B. Wayne Award for the contestant with the most promise in the performing arts.
Trish's journalism awards have included multiple Emmy nominations for her documentary and investigative reporting. Trish was also recognized with a George Polk nomination for her long-form reporting covering the aftermath of Hurricane Katrina with a team from CNBC. While at MarketWatch in San Francisco, Trish was named SF’s Society for Professional Journalists most promising broadcast journalist.
Trish Regan was born and raised in New Hampshire. She now makes her home outside New York City with her husband and three young children.
A successful fund manager and stock picker, Rob Hordon has extensive experience investing across asset classes, sectors, geographies and strategies. With consistent emphasis on ways to preserve and grow assets and manage risk, Rob has offered guidance to thousands of financial advisors and wealth management professionals in the United States and abroad over the course of a multi-decade Wall Street career.
Rob’s professional investment career began in the late 1990s as an associate in the Equity Research department of Credit Suisse First Boston, where he covered wireless telecommunications stocks at the dawn of the mobile phone era. As a recent college graduate, Rob had a front row seat at one of the epicenters of the tech bubble. He witnessed for the first time the stock market’s potential to deliver immense value creation through innovation but also its characteristic tendency towards excess.
Rob went on to obtain his MBA from Columbia Business School, where he focused on security analysis and through his course work learned from some of the top investment practitioners in the country. Upon graduation from Columbia, he took an analyst role in the Risk Arbitrage department of a firm then called Arnhold and S. Bleichroeder Advisers, which would later be renamed First Eagle Investment Management.
For approximately seven years, Rob worked as a member of a small team that ran a hedge fund strategy focused on identifying mispriced long-short opportunities among companies involved in merger and acquisition activity. Just prior to the 2008 financial crisis, he transitioned over to First Eagle’s Global Value team under the auspices of the legendary international investor Jean-Marie Eveillard.
As an analyst on the team, Rob was responsible for initiating and covering several billion dollars of public equity investments across a wide range of industry sectors and countries. This move also reunited him with renowned Columbia Business School economist and author Bruce Greenwald, who had recently joined as Director of Research. As colleagues and mentors, Bruce and Jean-Marie would become the two most formative influences on Rob's investment career.
In 2011, Rob proposed and worked with the team to develop a new multi-asset investment strategy built around the same long-term value-oriented investment philosophy pioneered by Jean-Marie. As co-portfolio manager of the First Eagle Global Income Builder Fund, Rob was directly responsible for over a billion dollars of assets under management with a particular focus on dividend-paying stocks and credit instruments. Rob and his partner later re-created and managed this strategy at a London-based boutique investment firm, J O Hambro Capital Management, beginning in 2017.
In 2023, Rob teamed up with his longtime friend Trish Regan to form 76research, where he is Co-Founder and Chief Investment Strategist. This entrepreneurial venture merges his passion for investing, research and writing with his desire to help others benefit from the long-term wealth creation potential of the stock market.
The son of an economics professor and elementary school teacher, Rob is a proud husband and father of three whose interests include history, philosophy, sailing and world travel. He was born in New York City and grew up in northern New Jersey, where he attended local public schools.
Rob Hordon is a Chartered Financial Analyst. In addition to his MBA from Columbia Business School, he received his Bachelor’s degree in Politics from Princeton University and was awarded a Certificate in Political Theory. His senior thesis, entitled Justice without Truth: Contingency in American Moral Thought, explores how the philosophical tradition of American Pragmatism offers a roadmap out of the moral and political abyss of postmodern relativism.
The ESG Assault on America
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The failure of the vast majority of active fund managers to deliver long-term investment outcomes that are superior to low-cost and tax-efficient passive alternatives is well understood. For decades, active managers have lost market share to index funds and ETFs. According to Morningstar, assets in passive funds across all asset classes finally surpassed active funds by year-end 2023. People have voted with their wallets. Why pay more for less?
Enter, from stage left, ESG or “Environmental, Social and Governance” investing.
ESG grew out of international political efforts sponsored by the United Nations and various non-governmental organizations to promote “stakeholder” capitalism. Klaus Schwab of the World Economic Forum explained stakeholder capitalism in December 2019 when he unveiled the Davos Manifesto 2020: The Universal Purpose of a Company in the Fourth Industrial Revolution. Yes, he actually called it a manifesto.
At the Davos meeting, which sent the ESG movement into overdrive, Klaus laid out in this document his strategy for remaking the global economic order through the implementation of ESG.
A company is more than an economic unit generating wealth. It fulfils human and societal aspirations as part of the broader social system. Performance must be measured not only on the return to shareholders, but also on how it achieves its environmental, social and good governance objectives. - Davos Manifesto 2020
The main idea behind ESG is to dismantle the quaint notion that a business should be run for the benefit of its owners. ESG seeks to make fund managers responsible for investing in companies (or avoiding companies) on the basis of their support for various political and social objectives (or lack thereof). Most prominent among these objectives are the UN’s Sustainable Development Goals (SDG’s).
The European Union has also unveiled very extensive ESG criteria in large part through a bureaucratic framework they refer to as their “taxonomy.” Every asset manager that wants to offer investment products in the Eurozone is now dedicating significant time and money to comply with these various ESG requirements.
ESG goals touch a wide range of areas, but “decarbonization” has become the primary thrust. The main purpose of ESG is to coerce public companies into reducing carbon emissions or abandoning carbon-producing activities altogether.
Having to a large extent failed at their original purpose of delivering superior investment results for their clients, asset managers in the U.S. and globally have embraced ESG for two primary reasons.
First, ESG is used as a marketing strategy, as saving the world from climate apocalypse has become a new talking point to justify management fees that are often ten to twenty times higher than passive alternatives. Buy any slightly honest investment professional a beer, and they will admit this is the commercial impetus behind ESG products, even if they may happen to agree with the philosophical mission.
Second, the enormous cost of compliance with byzantine and ever-shifting ESG standards favors large, entrenched managers. These firms understand that an immensely complicated, quasi-regulatory regime helps to prevent smaller competitors from gaining a foothold.
Through ESG, the asset management establishment has essentially been collaborating with groups around the world that are either government entities or closely connected to them in an effort to help fend off fee compression. Asset managers promote their political agendas, and in return they help keep them profitable.
ESG’s impact is hard to overstate. It is a form of political correctness that has quickly invaded practically every corner of the corporate world. It has changed how businesses behave, what professional investors are able to buy, even what people in and around the investment business feel they are “allowed” to say.
Given ESG’s origins in the United Nations and deep support within the European Union, it is worth emphasizing the movement’s distinctly anti-American flavor.
American industrial strength is to a large extent based on publicly traded corporations that rely on access to domestic fossil fuel resources that are also owned and controlled by publicly traded corporations. The ESG movement works by pressuring public companies and trying to deprive the ones they don’t like of access to capital by making them unownable. This of course competitively benefits non-public companies, such as state-owned energy companies in the Middle East or state-owned industrial companies in China.
At year-end 2023, well over 60% of the market capitalization of global equities (based on the MSCI ACWI Index, which includes 23 developed market and 24 emerging market countries) was comprised of American companies. Even though the economy of the Eurozone as a whole is comparable in size to the United States on a purchasing power parity basis, EU countries collectively make up less than 10% of this index.
Because the U.S. dominates public equity markets globally, any regulatory scheme targeting public markets is primarily targeting American businesses. While the real ESG decision-makers may sit in offices in Brussels and Geneva (if not their friends in Doha and Beijing), the largest impact is on businesses based in the United States.
We have encountered numerous examples of ESG gatekeepers encouraging behaviors that are overtly antithetical to American economic, political and security interests.
A German organization, which offers asset managers a highly valued “label” that effectively certifies a fund for ESG purposes, disqualifies funds that own U.S. government bonds, because the U.S. is not a signatory to an obscure international biodiversity treaty. Let this one sink in. These are Germans asserting that bonds issued by the United States of America should not be owned because the government of the United States of America does not meet their ethical standards.
ESG gatekeepers have for many years discouraged or prohibited investments in U.S. defense contractors because of their production of certain weapons systems as well as their involvement in nuclear technology. The ESG movement’s hostility to nuclear extends to utilities, with strict limits often applied to the percentage of revenue a utility may generate from nuclear energy.
The anti-nuclear attitude that prevails in the ESG community is truly perplexing and exposes the hypocrisy and real motives that drive the movement. While there are some environmental challenges and risks, the production of nuclear energy does not directly involve the emission of carbon dioxide, which is of course widely accepted as the chief concern of ESG advocates.
Nuclear energy is currently responsible for nearly 20% of all electricity generated in the U.S., significantly more than wind and solar combined, both of which, unlike nuclear energy, are intermittent rather than reliable baseload sources of power. We have been safely harnessing nuclear energy for commercial purposes since Eisenhower held a commencement ceremony for the Shippingport Atomic Power Station along the Ohio River in 1958.
It represents the hope of our people that the power of the atom will be able to open up a vast new world of peaceful development, that atomic power will ease mankind's burdens and provide additional comforts for human living. - President Dwight D. Eisenhower
If proponents of ESG were truly motivated to address the supposedly existential threat to the survival of humanity posed by carbon emissions, why would they support a quasi-regulatory system that discourages investment in the one proven technology that could realistically lead us to a low or zero carbon future?
If they are so genuinely concerned about environmental impact, why do they favor technologies that consume huge tracts of land and disrupt marine ecosystems over continued investment and innovation in a highly efficient technology that is already a core pillar of our energy infrastructure?
Americans who care about their portfolios, the economy and the country their children will inherit need to see beyond the euphemisms, the fearmongering and the deliberately confusing terminology and bureaucratic frameworks that surround the ESG agenda.
ESG is ultimately about gathering assets, charging high fees, shifting geopolitical power, exploiting commercial opportunity, disenfranchising investors, controlling corporate boards, laying claim to public funds, bypassing democratic policy-making processes, rewriting the rules of capitalism, and injuring the United States.
About 76research
Established in 2023 by financial journalist and media entrepreneur Trish Regan and veteran fund manager Rob Hordon, 76research is an independent digital content platform focused on delivering relevant, unconflicted and value-added research to the investing public. The company's subscription-based services include a biweekly newsletter called the 76report, thematic model portfolios and multi-media streaming content. For more information, go to www.76research.com.