WEBVTT - Conservatives vs. ESG 0:00:01.120 --> 0:00:04.840 Hey, this is Tim. Happy New Year. We're on vacation 0:00:04.960 --> 0:00:07.200 this week, but the Crash Course team wanted to re 0:00:07.320 --> 0:00:10.080 air an episode we had fun making with a colleague 0:00:10.119 --> 0:00:13.720 of ours here at Bloomberg. Sagel Kishan is a stellar 0:00:13.760 --> 0:00:16.840 Bloomberg reporter, and she wrote a really great article about 0:00:16.880 --> 0:00:20.520 the backlash to ESG, which is an investing practice that 0:00:20.560 --> 0:00:25.320 takes environmental, social, and governance concerns into account. We worked 0:00:25.320 --> 0:00:27.320 with her to turn the interview for that story into 0:00:27.320 --> 0:00:30.360 the episode that you're about to hear. Thanks for listening. 0:00:30.920 --> 0:00:33.800 Now here's the show. Have you ever looked at the 0:00:33.800 --> 0:00:37.400 stock market and thought, Dear Lord, my portfolio needs some help, 0:00:38.040 --> 0:00:42.479 or thank God, it's not that bad today. Well, for 0:00:42.560 --> 0:00:46.319 one investor in Idaho, that prayer happens every day, though 0:00:46.320 --> 0:00:47.920 with a little less exasperation. 0:00:48.560 --> 0:00:52.320 Heavenly Father, as we head into our week full of work, 0:00:52.320 --> 0:00:54.320 we pray that you would go with us, that you'd 0:00:54.320 --> 0:00:56.040 be with us, Lord, go before us. 0:00:56.520 --> 0:00:56.840 Thank you. 0:00:56.920 --> 0:01:01.000 That's Robert Netsley, the president and CEO of in Investing. 0:01:01.600 --> 0:01:02.959 His company does something he. 0:01:03.000 --> 0:01:05.360 Calls bysically responsible investing. 0:01:05.160 --> 0:01:08.800 Biblically responsible investing for the uninitiated. 0:01:09.120 --> 0:01:12.080 What doesn't mean to invest the Word of God means 0:01:12.440 --> 0:01:14.119 certainly to do what you can to earn a good 0:01:14.120 --> 0:01:17.800 return and use the returns for redemptive purposes, but also means, 0:01:17.880 --> 0:01:22.720 like Proverbs chapter sixteen says, better is a little with righteousness, 0:01:22.720 --> 0:01:25.720 and great gains with injustice. If there has to be 0:01:25.760 --> 0:01:29.280 a trade off between making a ton of money or 0:01:29.720 --> 0:01:36.200 being moral, like we should choose righteousness, morality, ethics. And 0:01:36.280 --> 0:01:38.280 there's very few people that I think wouldn't disagree with that. 0:01:39.240 --> 0:01:42.280 So Robert invests depending on what he thinks the Bible 0:01:42.360 --> 0:01:46.039 might support or not support. He used to label his 0:01:46.120 --> 0:01:49.680 offerings as faith based ESG in twenty. 0:01:49.560 --> 0:01:52.640 Nineteen, like when the latched WWJD. It's the first fund 0:01:52.680 --> 0:01:55.880 that had ESG in the name. What would you Do WWD? 0:01:56.560 --> 0:01:57.960 But now it's just like. 0:01:58.040 --> 0:02:00.320 All of a sudden, I'm talking to people who don't 0:02:00.320 --> 0:02:02.559 even know a sock or an equity or mutual funds 0:02:02.600 --> 0:02:03.080 and they're. 0:02:02.920 --> 0:02:04.240 Like, oh, he is G said that. 0:02:04.360 --> 0:02:05.720 Yeah, exactly what. 0:02:05.640 --> 0:02:06.080 Does it means? 0:02:06.080 --> 0:02:08.760 I don't know, but it's evil wait bad. 0:02:10.760 --> 0:02:14.400 Welcome to Crash Course, a podcast about business, political, and 0:02:14.440 --> 0:02:17.880 social disruption and what we can learn from it. I'm 0:02:17.880 --> 0:02:22.560 Tim O'Brien, Robert Netsley personifies a bigger war going on 0:02:22.600 --> 0:02:26.040 in the investment world and American politics over a little 0:02:26.040 --> 0:02:30.200 acronym called ESG. In the last year, there's been a 0:02:30.200 --> 0:02:34.400 Republican backlash to the trillions of dollars committed to investing 0:02:34.440 --> 0:02:39.359 practices that take environmental, social, and governance concerns into account. 0:02:40.440 --> 0:02:44.320 And then there's Robert. He's an evangelical Christian trying to 0:02:44.360 --> 0:02:47.240 realize his values and stay true to his own beliefs 0:02:47.240 --> 0:02:50.919 in the investing world. That's sometimes intersex with Wall Street's 0:02:51.200 --> 0:02:56.720 ESG strategy, but it also lays bare some contradictions. My 0:02:56.840 --> 0:03:01.240 colleague Sagel Kishan reports on ESG and staying for Bloomberg News, 0:03:01.560 --> 0:03:04.600 and she flew to Idaho to meet with Robert. She 0:03:04.680 --> 0:03:08.480 wrote a fascinating piece last fall called what would Jesus buy? 0:03:09.280 --> 0:03:13.519 Investor charts course for two billion dollar fund and she's 0:03:13.560 --> 0:03:15.600 going to share more of that story with us for 0:03:15.720 --> 0:03:21.920 today's crash course Conservatives versus ESG. It's a tale of 0:03:21.919 --> 0:03:24.959 two conflicts in a way, should there be biases in 0:03:25.000 --> 0:03:28.680 the investing world, be it faith based or social activism? 0:03:29.040 --> 0:03:35.200 And should ESG exist at all? Welcome to the show, Stagel, 0:03:35.480 --> 0:03:38.600 Thanks for having me. So before we dive back into 0:03:38.640 --> 0:03:41.720 Robert's story, I want listeners to get to know you 0:03:41.760 --> 0:03:44.280 a little bit more. You've been at Bloomberg about twenty 0:03:44.360 --> 0:03:46.480 years now. And how long have you been on the 0:03:46.680 --> 0:03:47.240 ESG beat. 0:03:47.640 --> 0:03:50.080 It's just over three years, just before the pandemic. We 0:03:50.080 --> 0:03:51.920 start to the beat, and why ESG? 0:03:52.120 --> 0:03:54.320 Why do you love this little corner of the market. 0:03:54.600 --> 0:03:59.560 It's complex, it's undefined, it's everywhere but nowhere. Just trying 0:03:59.560 --> 0:04:02.200 to figure out the complexities is what draw me to 0:04:02.240 --> 0:04:02.600 the beat. 0:04:02.840 --> 0:04:05.800 And you're good at solving complexities. I wish Oh, I 0:04:05.840 --> 0:04:08.480 bet you are. I think you are. That's why you're here. Now. 0:04:08.640 --> 0:04:11.720 How did you find out about Robert Netsley? What attracted 0:04:11.760 --> 0:04:12.800 you to him as a story? 0:04:13.280 --> 0:04:13.440 Well? 0:04:13.480 --> 0:04:16.159 I first heard about him after the shooting in Yavaldi, 0:04:16.320 --> 0:04:19.680 Texas last year, and I was looking at whether esh 0:04:19.880 --> 0:04:24.120 funds held gunstocks and I thought, obviously no. But then 0:04:24.160 --> 0:04:26.920 I found his funds and we found that he held 0:04:26.960 --> 0:04:30.919 shares in the firearms company called stm Rugger, one of 0:04:30.960 --> 0:04:34.480 the big ones, and a shooting sports company called Vista Outdoor. 0:04:35.000 --> 0:04:38.800 So I called him. He said that gun violence is deplorable, 0:04:39.120 --> 0:04:43.800 but guns themselves aren't unethical or immoral by themselves. I 0:04:43.839 --> 0:04:46.000 remember thinking it was a little weird, but to me 0:04:46.120 --> 0:04:48.960 it was new to hear about a conservative version of ESHI. 0:04:49.640 --> 0:04:51.920 I knew I had to learn more, so I helped 0:04:51.920 --> 0:04:53.880 on a plane and feutre boise last year. 0:04:55.400 --> 0:04:57.320 Okay, well, so why don't you take over the story 0:04:57.360 --> 0:04:59.480 from there, and then we'll meet back here later in 0:04:59.520 --> 0:05:02.360 the eppisode to talk more about ESG and. 0:05:02.360 --> 0:05:15.320 What you've learned sounds great, Robert Nesle is a small 0:05:15.400 --> 0:05:18.640 part of a bigger clash that's going on in America. 0:05:18.839 --> 0:05:23.000 Red versus blue, and the worlds of financing investing haven't 0:05:23.000 --> 0:05:28.680 been immune. EESG, which stands for Environmental, Social and Governance Investing, 0:05:29.120 --> 0:05:32.800 has become a pinata and dragged into the cultural wars. 0:05:33.480 --> 0:05:37.200 On the one hand, proponents of ESG say it's important 0:05:37.240 --> 0:05:40.799 to take into account things like climate change and workers' 0:05:40.880 --> 0:05:46.560 rights when making financing and investing decisions, especially amid societal changes, 0:05:47.040 --> 0:05:52.039 regulation and pressing problems like global warming, when opponents on 0:05:52.080 --> 0:05:55.719 the political right say ESG has become a way for 0:05:55.839 --> 0:06:00.279 progressives to impose their views and their goals on financial markets, 0:06:01.200 --> 0:06:04.760 essentially a threat to the American way of doing business. 0:06:05.480 --> 0:06:08.080 Robert Nesley is somewhere in the middle of those two. 0:06:08.520 --> 0:06:11.960 He's a bit of an anomaly. He straddles both sides. 0:06:12.680 --> 0:06:15.240 In one sense, he is a faith based investor who 0:06:15.279 --> 0:06:19.200 excludes things like tobacco and alcohol from his portfolio. On 0:06:19.279 --> 0:06:22.960 the other he invests in gun makers and pushes back 0:06:23.040 --> 0:06:27.240 on things like LGBTQ issues. We'll get into more of 0:06:27.279 --> 0:06:30.880 that later, but first I want you to hear where 0:06:30.960 --> 0:06:36.280 Robert came from. He grew up in California, in the 0:06:36.279 --> 0:06:40.160 Monterey Bay area. His parents married right out of high 0:06:40.160 --> 0:06:43.080 school and had Roberts and his younger brother not long 0:06:43.120 --> 0:06:48.000 after that. His mom stopped using drugs, but his dad didn't. 0:06:48.120 --> 0:06:48.960 So they got the worst one. 0:06:48.960 --> 0:06:51.479 I was about three, reading by my mom, my younger 0:06:51.480 --> 0:06:55.160 brother's artistic in on food stamps for a little bit, 0:06:55.160 --> 0:06:56.960 and all that kind of thing, going through life, and 0:06:57.720 --> 0:06:59.120 just really seeing the faithlesser going. 0:06:59.040 --> 0:06:59.880 Through all of that. 0:07:00.680 --> 0:07:04.320 As evangelical Christians, they went to church. The community there 0:07:04.360 --> 0:07:07.360 gave Robert sability and he had a sense that God 0:07:07.440 --> 0:07:10.680 was providing for his family. But he really found God 0:07:10.720 --> 0:07:13.240 one day when he was seven years old and on 0:07:13.360 --> 0:07:13.920 time out. 0:07:14.520 --> 0:07:20.480 I remember this really feeling like sorry for myself whatever, whatever, 0:07:20.480 --> 0:07:23.760 nobody loves me, YadA, yah YadA, And you know, writing 0:07:23.760 --> 0:07:27.200 in my ciddy and it's remembering what the pastor said 0:07:27.200 --> 0:07:31.080 that you know, Jesus loves you actually and he will 0:07:32.040 --> 0:07:34.920 forgive you of your sin. And as a seven year 0:07:34.920 --> 0:07:38.000 old does, I remember praying and asking Jesus to come 0:07:38.040 --> 0:07:40.400 into my heart, you know, and I give him mind 0:07:40.400 --> 0:07:42.920 to him there and then that's when personally I made 0:07:42.920 --> 0:07:45.720 a decision to really follow Christ in a very childlike way. 0:07:46.360 --> 0:07:49.440 Robert went to community college then later got his college 0:07:49.440 --> 0:07:52.440 degree online. In between that, he met his wife at 0:07:52.440 --> 0:07:55.800 a tiny church in his hometown. They lived a life 0:07:55.800 --> 0:07:59.480 of what he called intentional ministry, doing work in the 0:07:59.480 --> 0:08:03.080 community in the name of God. He worked with high 0:08:03.120 --> 0:08:06.680 schoolers with disabilities and at a pro life pregnancy center. 0:08:07.560 --> 0:08:09.600 When he and his wife started having kids and needed 0:08:09.600 --> 0:08:12.760 more money, he got a job at a Volkswagen dealership 0:08:13.040 --> 0:08:16.080 until it closed during the two thousand and eight financial crisis. 0:08:16.360 --> 0:08:18.560 On my way home from getting let go, when they 0:08:18.600 --> 0:08:21.600 told everybody, you know what was going on, like ahead 0:08:21.720 --> 0:08:24.160 was kind of spending respecting our second baby, and like, 0:08:24.200 --> 0:08:25.480 I don't know what I'm going to do, So we 0:08:25.840 --> 0:08:29.360 just kind of pulled over and spraying and really felt 0:08:29.400 --> 0:08:30.920 the piece of God to say, like, you know what, 0:08:31.080 --> 0:08:33.680 you've never liked that job anyway, this is your opportunity 0:08:33.720 --> 0:08:36.200 to do whatever you want to do and. 0:08:36.120 --> 0:08:36.880 I'll take care of it. 0:08:38.440 --> 0:08:41.200 So he thought about what jobs could have family friendly hours, 0:08:41.360 --> 0:08:43.319 and he decided to look for a job at a bank. 0:08:44.120 --> 0:08:46.280 He applied to everything he could, and then he got 0:08:46.280 --> 0:08:49.920 a gig with Wells Fargo in their investment department. Even 0:08:49.960 --> 0:08:52.800 though math was his worst subject in school, he picked 0:08:52.840 --> 0:08:55.760 it up really quickly, got license and moved into a 0:08:55.840 --> 0:08:59.480 role advising clients on their investments. He says he was 0:08:59.520 --> 0:09:02.880 happy as clam until decided to lead a Bible study 0:09:03.080 --> 0:09:06.480 on finances at his church. He wanted to talk about 0:09:06.480 --> 0:09:09.240 what the Bible teaches people about money. So he starts 0:09:09.240 --> 0:09:10.640 for searching and then. 0:09:10.559 --> 0:09:14.120 Some article came up about the response investing like investing 0:09:14.160 --> 0:09:18.520 interesting click and introduced this concept of Hayrid thought about 0:09:18.600 --> 0:09:22.360 what the companies you own, like you're an owner, what 0:09:22.400 --> 0:09:25.040 they're actually doing to make money? Right? And so if 0:09:25.040 --> 0:09:27.480 you own Netflix or whatever videos like would you have 0:09:27.520 --> 0:09:29.480 a video store that sold pornography videos in the back? 0:09:29.800 --> 0:09:32.440 Like no, I wouldn't, and yet that's exactly what we 0:09:32.520 --> 0:09:33.719 do as shareholders. 0:09:34.120 --> 0:09:36.320 Robert says, there are lots of scriptures in the Bible 0:09:36.440 --> 0:09:38.680 that say it's bad to make money off of things 0:09:38.679 --> 0:09:39.120 that are. 0:09:39.000 --> 0:09:41.400 Immoral, that is attestable to the Lord. 0:09:41.880 --> 0:09:44.560 So he turned to his own investments, and he quickly 0:09:44.559 --> 0:09:47.160 found what he considers to be a major red flag. 0:09:48.120 --> 0:09:51.840 He had been investing in companies that manufacture aborta fashions 0:09:51.960 --> 0:09:55.480 or drugs that help end a pregnancy. His heart sank. 0:09:56.360 --> 0:09:59.640 Remember he was the president of a pro life pregnancy center, 0:10:00.040 --> 0:10:03.280 and his reading of the Bible concluded that abortion is bad, 0:10:03.960 --> 0:10:06.960 So that investment was a complete no no for him. 0:10:06.800 --> 0:10:09.839 I remember sitting in my desk sort of slack job 0:10:09.920 --> 0:10:13.800 like this son, that this was something that I had missed, 0:10:13.800 --> 0:10:17.920 that the church is obviously missing, and that I couldn't 0:10:17.920 --> 0:10:20.320 do my job like somebody came to mist right now 0:10:20.360 --> 0:10:21.520 and asked me to play the trade. 0:10:21.320 --> 0:10:24.720 Like I couldn't do it with a queen conscience. And 0:10:24.760 --> 0:10:27.560 then I go craps because what else was I going 0:10:27.640 --> 0:10:29.880 to do? And so it's incredibly frightening. 0:10:30.400 --> 0:10:32.800 So he quit the bank, and he said he felt 0:10:32.800 --> 0:10:36.120 God was calling him to do something else, he dabbled 0:10:36.200 --> 0:10:39.679 with what he called biblically responsible investing, and then in 0:10:39.679 --> 0:10:44.240 twenty fifteen he started his own firm called Inspire Investing. Essentially, 0:10:44.480 --> 0:10:48.760 Inspire invests in companies it seems worthy, engages with those 0:10:48.800 --> 0:10:52.160 that it hopes to convert, and excludes or divest from 0:10:52.240 --> 0:10:53.720 ones that it finds immoral. 0:10:53.960 --> 0:11:00.520 In the Apostle Paul, in one of his letters to churches, 0:11:01.080 --> 0:11:03.320 it talks about how he's like he's compelled to preach 0:11:03.360 --> 0:11:05.400 the gospel and there's there's nothing else that he can do. 0:11:05.440 --> 0:11:07.160 He's just he's compelled to preach the gospel. 0:11:07.800 --> 0:11:09.640 And I really felt like that, like I'm compelled, like 0:11:09.640 --> 0:11:12.720 there's nothing else I can do other than then this, 0:11:13.360 --> 0:11:16.959 you know, goes share this story with people, and I 0:11:16.960 --> 0:11:19.040 don't know how it's going to end up, you. 0:11:18.960 --> 0:11:20.959 Know, maybe terribly financially, but this is what I have 0:11:21.080 --> 0:11:21.240 to do. 0:11:21.600 --> 0:11:23.040 So of course of my eye step out of the mote, 0:11:23.200 --> 0:11:26.640 and you know, trusted God, and he's been he's been faithful. 0:11:28.400 --> 0:11:31.280 The market was exceptionally bad last year because of inflation, 0:11:31.640 --> 0:11:34.439 the war in the Ukraine, and fears of a global overcession. 0:11:35.080 --> 0:11:37.280 So maybe it doesn't mean a lot that his biggest 0:11:37.280 --> 0:11:40.960 fund slumped about twenty four percent last year. If we 0:11:40.960 --> 0:11:44.440 look back to a good year twenty nineteen, his fund 0:11:44.480 --> 0:11:46.720 was up twenty eight percent, but it was still slightly 0:11:46.760 --> 0:11:50.520 below the overall startle markets. But remember what Robert said 0:11:50.520 --> 0:11:53.440 at the beginning of this episode. For him, it's not 0:11:53.679 --> 0:11:56.320 all about making money. 0:11:56.400 --> 0:11:58.559 I'm not an investor who's a Christian, like I'm a 0:11:58.640 --> 0:12:00.480 Christian who has to work and investment industry. 0:12:01.160 --> 0:12:05.160 Many of the biggest and most profitable companies are excluded 0:12:05.160 --> 0:12:08.440 from his portfolio, which is almost a guarantee that his 0:12:08.559 --> 0:12:10.240 investments will underperform. 0:12:10.440 --> 0:12:14.760 We exclude companies that you know, support legislation that is 0:12:15.440 --> 0:12:18.959 anpathetical to a biblical viewpoint, like pushes a certagy or 0:12:19.120 --> 0:12:22.600 doing money to an activist organization that's explicitly pushing an 0:12:22.640 --> 0:12:24.240 unbiblable viewpoint on those areas. 0:12:27.000 --> 0:12:30.240 So Robert's reading of the Bible says abortion is bad. 0:12:31.000 --> 0:12:33.280 We'll think of all the companies that announce that they 0:12:33.320 --> 0:12:36.400 would pay for employees to travel for an abortion after 0:12:36.440 --> 0:12:41.040 the Supreme Court overturn rov Wade last summer, They're out 0:12:41.080 --> 0:12:45.320 of his portfolio. Also excluded all of the companies that 0:12:45.400 --> 0:12:49.440 support or finance floats during the Pride Parade. His reading 0:12:49.480 --> 0:12:53.920 of the Bible isn't supportive of LGBTQ rights either. I'll 0:12:53.960 --> 0:12:56.760 just note here that while Netley says that he loves 0:12:56.800 --> 0:13:01.320 his LGBTQ neighbors, he doesn't want what he describes as 0:13:01.360 --> 0:13:06.400 their lifestyles promoted in society and by companies. Nor does 0:13:06.440 --> 0:13:09.120 he want companies to discriminate against people like Kim in 0:13:09.160 --> 0:13:13.520 the workplace who hold more traditional views on marriage. So 0:13:13.920 --> 0:13:17.920 abortion access and LGBTQ rights are only two issues, but 0:13:18.000 --> 0:13:20.320 they put a lot of companies on the exclude list. 0:13:21.480 --> 0:13:25.240 Other companies are shunned for reasons such as distributing pornography, 0:13:25.720 --> 0:13:30.200 selling tobacco and alcohol products, funding stem cell research, and 0:13:30.240 --> 0:13:35.600 promoting in vitro fertilization. All in all, Robert says Inspire 0:13:35.760 --> 0:13:39.760 excludes about half of this in P. Five hundred, companies 0:13:39.840 --> 0:13:47.720 like Amazon, Walmart's Apple, and Google's parent company alphabets. In 0:13:47.760 --> 0:13:50.360 an effort to limit the number of companies on the 0:13:50.440 --> 0:13:55.160 exclude list, Robert will often press executives, encouraging them to 0:13:55.200 --> 0:14:00.000 avoid what he says is politicization. Here's one examples. 0:14:00.000 --> 0:14:03.160 So, who likes costco wholesale fans of free samples in 0:14:03.160 --> 0:14:03.480 the room. 0:14:03.760 --> 0:14:07.000 He's on the stage at a conservative conference in twenty eighteen. 0:14:07.480 --> 0:14:09.839 Last summer, we were alerted to the fact that they 0:14:09.880 --> 0:14:13.400 had begun sponsoring certain gay pride parades throughout the country, 0:14:13.800 --> 0:14:17.559 a handful of different cities. Obviously, this is concerning to us. 0:14:18.000 --> 0:14:19.800 So I picked up the phone and I just called 0:14:19.840 --> 0:14:21.640 Investor Relations, he said. 0:14:21.680 --> 0:14:25.080 The CFO called him back and they had several conversations. 0:14:25.480 --> 0:14:28.120 About six weeks after that initial phone call, got another 0:14:28.160 --> 0:14:31.200 call from this gentleman telling us that Costco had made 0:14:31.200 --> 0:14:34.200 the executive decision not to support divisive issues his word, 0:14:34.240 --> 0:14:37.120 divisive issues such as gay pride parades. 0:14:38.160 --> 0:14:41.760 Costco wouldn't respond to requests for comment, but these sorts 0:14:41.760 --> 0:14:45.040 of campaigns show that his work is about more than 0:14:45.160 --> 0:14:49.440 just investing in this faith. He's having an influence. It 0:14:49.440 --> 0:14:52.360 doesn't always go his way, though, He says he's tried 0:14:52.360 --> 0:14:56.800 to persuade Smuckers against supporting lgbth wrights and other quality issues. 0:14:57.480 --> 0:15:00.440 He's also tried to press six Sporting Goods against paying 0:15:00.480 --> 0:15:06.480 for employee travel for abortions, but so far he's been unsuccessful. Yet, 0:15:06.600 --> 0:15:08.680 Robert says he avoids the shame game. 0:15:08.840 --> 0:15:13.400 One of the big criticisms of physically responsible investing generally 0:15:13.480 --> 0:15:16.800 is that it can be easily perceived or assumed that 0:15:16.880 --> 0:15:19.800 it's a guilt trip game, right, like, hey, did you 0:15:19.840 --> 0:15:20.880 know that you're invested in this thing? 0:15:20.960 --> 0:15:21.200 Shame? 0:15:21.880 --> 0:15:24.920 And unfortunately, I think historically there have been those that 0:15:24.920 --> 0:15:27.920 have taken that approach. Good intentions maybe, but you know, 0:15:28.200 --> 0:15:30.360 run approach. And you know, we've heard a lot of people, 0:15:30.440 --> 0:15:32.480 especially from the early days and like before we got 0:15:32.480 --> 0:15:35.000 involved in like the decades, you know, nineties and eighties 0:15:35.000 --> 0:15:37.640 and whatnot, that that really was the perception that it 0:15:37.680 --> 0:15:41.000 was like a guilt and shame sort of legalistic approach, 0:15:41.440 --> 0:15:45.960 which is, you know, distasteful and not really difficult. We're 0:15:45.960 --> 0:15:48.840 supposed to be compelled by love and grace, not guilt 0:15:48.880 --> 0:15:49.240 and shame. 0:15:49.840 --> 0:15:52.080 So take that as you will. But one thing that 0:15:52.200 --> 0:15:54.920 really struck me was that he decided to label his 0:15:55.000 --> 0:15:59.000 funders e SG. When I thought about it, it made 0:15:59.040 --> 0:16:03.600 sense in some ways. I mean, Inspire certainly screens companies 0:16:03.640 --> 0:16:07.360 by a variety of categories that fall under E S 0:16:07.440 --> 0:16:11.640 and G topics, which is environmental, social and governance issues. 0:16:12.240 --> 0:16:17.440 Inspire will screen for human rights violations, forced labor and 0:16:17.480 --> 0:16:21.720 other worker issues like minimum wage policies. It'll look at 0:16:21.720 --> 0:16:25.040 whether companies are cognizant of their environmental impacts such as 0:16:25.160 --> 0:16:29.520 water consumption and air pollution, and INSPIRE will screen for 0:16:29.640 --> 0:16:34.720 discriminatory or prejectory lending, whether companies are aggressively marketing products 0:16:34.720 --> 0:16:38.960 in low income communities. All of those are considered issue factors. 0:16:39.600 --> 0:16:42.320 But the day I visited him last August, that was 0:16:42.360 --> 0:16:46.280 all about to change. Right before our interview, he was 0:16:46.320 --> 0:16:48.880 in a meeting with his board and they decided to 0:16:48.960 --> 0:16:51.320 remove the E issue label from their funds. 0:16:51.640 --> 0:16:53.440 I don't know if there was some meeting that they 0:16:53.440 --> 0:16:56.600 had in conservative radio land or something, right, but like, hey, 0:16:56.680 --> 0:16:58.160 this year, let's talk about USU every. 0:16:58.000 --> 0:17:01.160 Single time we go on here. So the you know, 0:17:01.280 --> 0:17:04.000 just we noticed the rhetoric is like increasing. Hmm. Watching this, 0:17:04.160 --> 0:17:05.159 I don't know how that's going to go. 0:17:05.440 --> 0:17:07.080 We're committed to like trying to be alive, trying to 0:17:07.080 --> 0:17:10.840 be redemptant influence on ESG, and meanwhile we're getting like 0:17:10.960 --> 0:17:13.000 lambassad from the left for like staying reesg. 0:17:13.720 --> 0:17:16.880 Roberts says he got blowback from liberal corners for claiming 0:17:16.920 --> 0:17:20.320 the ESG label while investing in socks that might contradict 0:17:20.359 --> 0:17:25.199 a more traditional understanding of what ESG means. Meanwhile, his 0:17:25.320 --> 0:17:28.479 more conservative clients were also getting confused by the label. 0:17:29.320 --> 0:17:33.000 Conservative talking heads like Glenn Beck and Tucker Carson had 0:17:33.040 --> 0:17:36.760 been attacking ESG on air, describing it as what they 0:17:36.840 --> 0:17:42.000 call a leftist agenda. So have high profile politicians such 0:17:42.000 --> 0:17:46.040 as Florida Governor Ron de Santis and former Vice President 0:17:46.160 --> 0:17:50.520 Mike Pence. Beck has said ESG poses a danger to 0:17:50.680 --> 0:17:54.480 soul of America. DeSantis has gone as far as directing 0:17:54.520 --> 0:17:56.840 his state to pull billions of dollars from black Rock, 0:17:57.280 --> 0:17:59.800 the Wall Street money manager that's been the most vocal 0:18:00.240 --> 0:18:04.000 about pressing companies on issues like climate change, and more 0:18:04.040 --> 0:18:09.080 than a dozen states have pushed anti ESG laws. So, 0:18:09.160 --> 0:18:13.080 if all these guys are calling ESG woke capitalism, what 0:18:13.119 --> 0:18:16.960 was inspired doing? Robert says he wishes es SHE could 0:18:16.960 --> 0:18:19.640 be seen as more neutral, But it is what it is. 0:18:20.280 --> 0:18:24.639 It's a narrative that we are powerless to counteract. If 0:18:24.640 --> 0:18:28.320 we had a bigger microphone than maybe we would try. 0:18:27.760 --> 0:18:33.640 But the amount, Yeah, like when every conservative pundit is 0:18:34.000 --> 0:18:36.040 calling an evil, like, we just cannot. 0:18:36.440 --> 0:18:37.359 Counteract that narrative. 0:18:37.960 --> 0:18:42.000 Not that Robert necessary wants to counteract conservative talking points. 0:18:42.480 --> 0:18:45.000 He is on the conservative end of the spectrum, after all, 0:18:45.880 --> 0:18:48.880 and he shared the stage at conservative conferences with big 0:18:48.960 --> 0:18:53.240 names from the Republican Party. He says he won't endorse candidates, 0:18:53.840 --> 0:18:56.600 but his work naturally leads him to back or speak 0:18:56.640 --> 0:18:59.960 as against companies based on whether they're handling of socially 0:19:00.080 --> 0:19:02.320 shoes conforms to his reading of the Bible. 0:19:02.840 --> 0:19:07.439 We believe that a healthy business respects all viewpoints, right, 0:19:07.480 --> 0:19:09.800 and they certainly they claim to be tolerant and inclusive, 0:19:10.119 --> 0:19:12.680 then they should actually be so in practice. 0:19:13.760 --> 0:19:16.280 So do you want them neutral or do you want 0:19:16.320 --> 0:19:18.199 them to keep kends what you mean by neutral? Right, 0:19:18.240 --> 0:19:21.520 So it means neutral by allowing all points. 0:19:21.359 --> 0:19:26.119 Just making shoes, just sit to making cheese. 0:19:28.119 --> 0:19:32.159 If it's Nike, yes I would like him Betral, not 0:19:32.760 --> 0:19:35.720 if it's Bobby Lobby or just like what I'd like 0:19:35.800 --> 0:19:38.280 them to keep not being neutral, you know. 0:19:38.320 --> 0:19:40.760 But even those companies they respect new point, diversity and 0:19:40.840 --> 0:19:43.719 all sorts of people working there, so they're not It's 0:19:43.800 --> 0:19:49.320 neutrality in you know, not imposing your beliefs, you know 0:19:49.480 --> 0:19:53.040 upon people working there in a way that is you know, 0:19:53.200 --> 0:19:55.680 heavy handed or whatever else like it's respecting all viewpoints. 0:19:57.240 --> 0:19:59.919 Wow. Wow, I'm sorry to interrupt Segel, but this is 0:20:00.200 --> 0:20:03.320 just so interesting to me. Robert sounds like such a 0:20:03.320 --> 0:20:06.520 likable man, and he has goals of realizing his values 0:20:06.560 --> 0:20:10.919 as an investor and through his portfolio. But I also 0:20:10.960 --> 0:20:13.760 think there's some hypocrisy and contradictions going on here that 0:20:13.800 --> 0:20:19.480 are worth exploring. He's asking companies like Nike, for example, 0:20:19.560 --> 0:20:22.480 to be neutral and to not put values ahead of 0:20:22.520 --> 0:20:25.080 their product line for example, or do not put values 0:20:25.080 --> 0:20:28.240 ahead of their sponsorships. And yet then he's turning around 0:20:28.240 --> 0:20:31.800 and saying Chick fil A or a hobby lobby is 0:20:31.880 --> 0:20:34.920 doing the right thing by restricting certain people from its 0:20:34.960 --> 0:20:39.240 premises or from its product line. And that just feels 0:20:39.280 --> 0:20:43.200 to me like a deep contradiction, especially from someone who 0:20:43.520 --> 0:20:46.760 says they're a Christian if you accept that sort of 0:20:46.840 --> 0:20:50.680 a basic tenet of Christianity is love and forgiveness. Who 0:20:50.760 --> 0:20:53.800 is he really forgiving? Who does he really love when 0:20:53.840 --> 0:20:57.400 he's working through where he's going to invest? And then 0:20:57.440 --> 0:21:01.480 the criticisms he has of other people for making exactly 0:21:01.520 --> 0:21:02.880 the same choice as he does. 0:21:03.400 --> 0:21:05.560 Well, that's where it gets all murky. A lot of 0:21:05.600 --> 0:21:09.720 conservatives feel that corporate America has been co opted by 0:21:09.760 --> 0:21:13.560 liberals who are pushing goals like climate change, for instance. 0:21:14.280 --> 0:21:18.639 These conservatives want businesses to focus on business and to 0:21:18.760 --> 0:21:22.560 be more neutral and not following liberal goals. 0:21:23.080 --> 0:21:25.120 Yeah, but neutrality is in the eye of the beholder, 0:21:25.359 --> 0:21:28.399 too right, right, too right, and at least classically with investment, 0:21:28.440 --> 0:21:30.160 if you're saying you're being neutral, you're trying to look 0:21:30.280 --> 0:21:32.920 just at the numbers. And now you have these conflicts 0:21:32.920 --> 0:21:34.639 between people who say, we have the numbers, but we 0:21:34.680 --> 0:21:38.040 also have values. But then you have Robert Ntsley who's saying, 0:21:38.040 --> 0:21:40.520 my values are good for me, but your values aren't 0:21:40.520 --> 0:21:41.040 good for you. 0:21:42.000 --> 0:21:43.919 Maybe this is a good place to pause on the story. 0:21:44.400 --> 0:21:47.560 I agree. Let's take a break, and then where are 0:21:47.560 --> 0:21:48.720 we going When we get back. 0:21:49.280 --> 0:21:50.960 I want to step back and talk to some of 0:21:50.960 --> 0:21:53.480 the experts I've been speaking to about what's going on 0:21:53.560 --> 0:21:56.199 in the issue space, and then we'll go back to 0:21:56.440 --> 0:21:58.040 roberts and here's some of his sorts. 0:21:58.640 --> 0:22:06.280 Great, we'll be right back with all of that. Okay, 0:22:06.560 --> 0:22:09.680 we're back with Bloomberg's ESG reporter Segel Kishan. 0:22:09.960 --> 0:22:10.840 Thanks for having me. 0:22:11.240 --> 0:22:13.600 So we've just heard the story of Robert Netsley, a 0:22:13.680 --> 0:22:16.879