This is Jeff Oravits show business spotlight, where I bring you happenings in the business community, the financial markets, real estate, and much more, and we talk with and invite great guests that help us break all this down. On this episode, Glenn Leest with WT Wealth Management. Let's talk ESGs. What is it and why you should be paying attention to this.
All right, welcome. And, um, I do have our good. Buddy Glenn Leest with WT Wealth Management with us. Uh, Glenn, oh man, we've got a big one to talk about here today, uh, with ESG. And I mean, it used to be, we'd talk like the ABCs, but now it's the ESG, I guess. What, what is, how you been by the way? I'm, I'm doing great.
Thanks for asking. I've got a funny story about a Tesla because I was in Seattle, uh, for a week and, uh, I got to drive a Tesla and, uh, yeah. Um, interesting experience with that, but it's impress, impress. It's an impressive car though. I mean, I have Oh yeah. Um, uh, Bruce Slinger, who's a frequent guest on the show, he has two of those.
He was one of the early ones that got one and nobody had one. And it was, you know, just super novelty. And he took me in it, and it threw you back in your seat. The, the, the, the, the pickup speed. Oh yeah, it goes zero, but ours that we got was zero to 60 in like 2. 5 seconds or three seconds. It was just unbelievable.
Yeah. Yeah. Well, if you someday decide to buy a Tesla, um, Glenn, you will probably pop your ESG score up a little bit. What is, what is, I think a lot of people are familiar with it, but what does that stand for? What is ESG? Yeah, so ESG stands for environmental social and governance. And so it's a metric that a lot of companies have started to adhere to um To boost their really their social credit score and their clock within the society to say hey This is what we're doing You know to better be a better steward of our company which in premise sounds really good However, it's kind of been used in a not so good way, or it's maybe gotten off the rails a little bit.
And that's where our conversation comes in today. So, say you have a company like Facebook. So, what the ESG does is you've got a company like Moody's or Fitch or some other rating agency that scores this company and scores in a bunch of different areas. And based on that spits out a score one to five stars or whatever the scale is the time.
And if you're four stars and above, then you're doing great. You get a grade and you get included in a lot more. Uh funds retirement funds and you know different, you know asset managers, you know we’ll include you in there. And then if you don't get those scores, you'll be excluded So there's been a lot of companies that have been trying to get their scores up because it makes a big difference, you know if uh You have a company like vanguard or BlackRock, you know who are including you in their funds, you know That could be a 15 20 stake in your company Um, and if you're not included because you don't meet the ESG scores you can be excluded So as a basis, that's kind of what ESG stands for um, and I can go into each detail while you know, the e the s the g, you know what they're looking for, but Um, that's the basics of it is they're trying to give a score of how they're doing each of those areas.
Well, yeah. And I think we should go into that a little bit more Glenn, because I mean, that this is becoming a huge factor going forward. ESG. I think a lot of people and companies are making really dumb decisions to try to get that score. Let's, let's say you were traditional. I don't know, energy producer or whatever and you're, dirty coal, whatever you want to call it.
Or, oh, those petroleum producers, well, suddenly, you're like, oh, let's, let's add some solar panels or let's do this or that, which we normally would never do because it doesn't add anything to the bottom line. And that's not what our business is, but we need a good ESG score because we want our shareholder price to go up and we want to be, you know, we want black rock to buy us.
I mean, do you think it's leading to poor management decisions? 100 percent Yes, and I'll give you a good example. So, um, every company, their main goal is to, you know, provide a good or service to their clients or customers, make money and be more profitable each year. So, all their guiding business principles or policies should be in the direction of how we can make that equation better?
And so, a lot of times with the ESG movement, um, they've made a shift from increasing shareholder value to increasing stakeholder values. They've kind of made this tiny, what seems like a tiny shift, but it's actually a massive shift because stakeholders can be Anyone that has any affiliation with the company it could be you know The community it could be a customer can be an employee These are all people that have no financial interest in the company or no ownership And now that allows that company to push And further advance whatever social issue they want to even if it's bad for business and it's clearly in a lot of cases like Anheuser Busch I You know, it'd be hard to argue that their recent marketing campaign has been good for business because they're down 26 billion and they're laying off tons and tons of people.
I mean, I can't imagine working for that company for, you know, if I was an employee working there for 10 years and all of a sudden losing my job because of some, you know, ill-advised marketing, you know, plan that they did that really just destroyed their company. So, um, just this further social issue like.
That's not good for business and it's clearly demonstrating other companies like target got hit with a 6 billion market cap loss after their, uh, their latest controversy that they've been going through. So. Yes, you are 100 percent correct. Some of these policies, um, are not good for business, but the thought process is they're good for whatever social issue they're trying to achieve, which, you know, why, why even go down that road?
Yeah. And you, you hit it, Glenn. And Glenn Least is with us. You hit it with what is the purpose of these companies? And I, I sum it up even a little differently and well, maybe just even shorter, you can put it on a bumper sticker, uh, to return value to the shareholders. I mean, that's why they really exist is you buy a stock, you buy a piece of that company and you're hoping to get a dividend back or that the stock value will go up.
It used to be you'd be buying these and getting dividends back and you're making a return on your investment. And normally if, uh, I buy that stock and maybe I have some interest in the company or some say I buy enough of those shares, I go to the meeting and then, they listen to you, Glenn. And they say, yeah, we didn't make a good decision here.
We're going to make changes. But now they're not listening to me, or you or the smaller, medium sized investors are just listening to these big conglomerates, the big hedge funds that are buying everything up. Yeah. And so that touched on the, I've got good news with all this because we've got a way to fight the good fight, if you will, as a firm, if you're not into the ESG thing, but.
A lot of these companies are feeling pressure from these large institutional asset management firms, like Vanguard or BlackRock. And say, you know, you're BlackRock and you own 20 percent share of Target through all your different funds, and you say to Target, hey, this is what we want you to do. We want you to implement this DEI policy, diversity, equity, and inclusion.
And if you don't, you know, we're going to ding you, or we're just going to divest from you, meaning we're going to pull our funds. Well, you as a company are going to say, oh my gosh, we need to comply. We're like being forced into a corner. And so, the real problem. Are these large asset managers have so much sway that, um, the companies are kind of being forced into that.
Cause, cause think about that. If you're a target and you're in a shareholder or you're in the meeting, you know, with top executives, you own a bunch of shares of the company. You wouldn't want to implement policies that are going to directly affect the value of your company and affect the value of your shares.
You're going to say, hey, whatever social issue thing we're trying to do, whether I agree or not. Let's talk about business. This is going to hurt business. And that is not what we're designed to do. Um, and so one way to combat, because a lot of people have felt powerless in this whole situation, because there's some companies you can boycott.
There's a lot of other companies that frankly, we can't live without. Like, what else are we going to do? Like, you know if you don't like Verizon wireless, like. I'm not going to go with Boost Mobile, um, because Verizon, you know, gives solid service. And so, it's kind of like a lot of people feel trapped, like their voice can't be heard.
There's no way to make a... A measured change, but we have a, a great solution for that. We may call it the anti ESG portfolio where we can fight that. Yeah. So, what, what is, let me just really quick before I forget you, you made a good point on, you have to do business with some companies. Okay. You don't like Verizon.
Okay. I got AT& T or what's the other one sprint or something. Is that still around? Uh, okay. I need a bank that has presence in all the cities in the country. I don't like Bank of America, so I'm going to go to Wells Fargo. I mean, it's like, there's not a lot of difference, so you kind of get stuck. Um, but I like the, what'd you call it, anti ESG fund?
Yeah. Okay. Yeah. Break that, break that down. Yeah. So, it’s, we just rolled this fund out about a week and a half ago. Okay. And here's the premise. Is that we realize boycotting these companies may not have an effect or we just can't boycott them at all because they're so ingrained in our daily life and so what we're doing is as a firm when we own Because we have quite a bit of assets under management, but say we have you know Half a million shares of apple between all our clients.
We can actually go together as one One voting class and say we're only going to vote for policies that Further the growth and the further the value of the shareholders That is what we want to focus in on and anything that's not in line with that We're going to vote it down and say let's get back to just doing business Let's get back to just selling a great cup of coffee or producing a good car, whatever the case may be And so it's a way for investors to really Still be able to own shares of these companies, but feel good.
That measurable change is happening because if enough people do that. Um, maybe, you know, there's like 25 percent of people that are doing these, you know, type of anti ESG movements and they can vote with their, you know, their sharers, um, and make a measurable change at the board of directors’ level and the policy level.
So, I think that's something very exciting and to my knowledge, there's not a whole lot of places offering an alternative, um, to the ESG movement. Yeah, that's interesting. That may catch on. I should always put my disclaimer here. Um, I am interested in that anti personally. That sounds interesting in full disclosure.
I obviously invest some with Glenn and with WT Wealth Management. Glenn's also a sponsor here. Great sponsor here on the program. Um, but I, I deal with people that I like to deal with that I have a lot in common with. And I also like when I hear things like anti ESG fund. Um, um, but of course, investing always has, has risks.
I'll throw that out there, Glenn. Yeah, but I, I'm setting that all aside. I'm going to be talking to you on the side because I'm, I'm curious what's again, I don't give any individual stock or any kind of individual advice, but what's in there. Can you say, or is it still, is that something people should call?
I'm really curious. Like what, what company, how do you even find companies that fit in that parameter? So this is the beauty of it is even if the company doesn't fit in that parameter state say for example Walmart and this is like a completely made up scenario, but say Walmart, you know is implementing all these policies that are really bad for business, but we own a bunch of shares of Walmart We'll then take those shares and vote accordingly to say hey, let's get back in line with you know, good business policies so that way we don't have to specifically search out a company that is You know, doing things the other way, which there are those companies that are, you know, you know, still doing business.
To be in business and offering a good or service and not doing all the social commentary. But even those that are, we can still own them and feel good to know that we're making changes. It allows you to invest, you know, and have a clear conscience to know you're not part of the problem. You're part of the solution.
Um, so to answer your question, that that's how we do it. We'd put like a, an overlay in your portfolio and we would. Enable that ability and there's two ways of doing it and I can kind of cover, you know How specifically we're doing that and why it’s, so I think intriguing. Okay. So the first way is um, we If you have individual stocks in your portfolio because we have a couple different versions of portfolios Um, some of them are big buckets of mutual funds or ETF’s and then at a certain Account size we can then do the same thing but actually own the individual shares of the company But if you only have like 500 or 1000 bucks, you're not going to be able to buy 300 different companies or 200 different companies.
But if you have a couple hundred thousand, you can. So, we have a way to do it both at the mutual fund level and the individual stock level. So, one of the mutual funds that we're really excited about, um, it's called strive. Um, and that company was created by Vivek, uh, Ramaswamy.
for president. Yeah, yeah, yeah. I didn't even know that until recently and I already liked what I was hearing from the guy anyways, and then I found out he was, uh, offered this mutual fund, you know, uh, ability to kind of fight back against that. He, you know, his company has been doing quite well and it's growing very fast.
We're looking to implement that on the mutual fund side and then also some individual stock voting on our side so that no matter what size client, if they want this, we can implement it for them. Okay. That's interesting. Well, I think the good news is people are fighting back. Um, and if they're not fighting back in the way you're talking about the Anheuser Busch debacle is a perfect cautionary tale to the, the, the boardroom folks and the shareholders that when they see somebody come and say, hey, I got a great idea.
Let's do this. And they're like, oh, Anheuser Busch, and I, I, you know, I feel bad for the people that have lost jobs and stuff like that. I always do, but sometimes there needs to be an example put out there and, and, and a success in, in halting this stuff going forward. All right, Glenn. Um. Interesting stuff.
I suspect that you and I will be talking a lot more about ESG, uh, environmental, social governance, um, as we go forward, but I'm, I'm glad to hear that you're fighting back some and look forward to having you back on real soon. Uh, throw out your, your info there quick. I, I know you guys, you can come into your office, you can call up, um, email, anything like that.
So, uh, people can get in touch with you and, and have that one-on-one conversation. Yeah, yeah. My office number is 928 225 2474. Again, that's 928 225 2474. Or they can stop by the office. We're at 813 North Beaver Street, just south of the hospital. And, uh, or email at intelligent investing at WC wealth management.
com. All right, Glenn, talk with you soon. Have a good one. Thanks, Jeff. You bet. You've been listening to Jeff Oravits show business spotlight. Check out more of my interviews and videos by going to talk with Jeff. com or look up Jeff Orbitz on YouTube. Please subscribe and comment. Also check out and subscribe to the Jeff Orbitz show on your favorite podcast provider.
And remember this interview is for information. I do not give financial advice. You should seek out a financial planner or a financial advisor when making any investment decisions. Thank you to the show has been brought to you exclusively by Glenn leased at WT wealth management. Give Glenn a call at 9 2
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