Derek Kreifels
Derek Kreifels is the co-founder and Chief Executive Officer of the State Financial Officers Foundation (SFOF), the only nonprofit in the U.S. that combines ground-breaking free-market research with a strong network of states’ treasurers, auditors, and other financial officers, to actively sustain the health of each state’s economic outlook. Before co-founding SFOF in 2012, Kreifels spent five years as Assistant State Treasurer of Kansas, where he oversaw the state’s college savings plan, ABLE plan, debt and bond management, and pension investments. During his tenure, his office processed over $21B annually, and he managed 42 employees with an annual budget of over $3.5M.
Books Mentioned on The Jordan B. Peterson Podcast #344 - Derek Kreifels
Author: Siddhartha Kara
Author: Jordan B. Peterson
Author: Jordan B. Peterson
Unpacking the Implications of ESG Investing with Derek Kreifels
In episode #344 of the Jordan B. Peterson Podcast, renowned psychologist and author Dr. Jordan Peterson hosts Derek Kreifels, CEO of the State Financial Officers Foundation (SFOF). The conversation delves into the complex and controversial topic of Environmental, Social, and Governance (ESG) investing, its impact on state treasuries, and the broader financial implications for individuals and businesses.
Background and Mission of Derek Kreifels and SFOF
Derek Kreifels’ journey from a small town in Kansas to the deputy treasurer of Kansas and eventually the CEO of SFOF highlights his commitment to financial issues from a free-market perspective. SFOF, co-founded by Kreifels and eight other state treasurers 11 years ago, focuses on educating public officials on public finance issues, emphasizing the importance of a free-market approach.
The ESG Investing Phenomenon
ESG investing, short for Environmental, Social, and Governance, is increasingly influencing corporate and state investment strategies. Initially sounding appealing due to its ethical overtones, ESG soon reveals complexities and potential pitfalls. The podcast discusses how ESG is being utilized by large financial entities like BlackRock to push a political agenda, often at odds with the fundamental principles of free-market capitalism and fiduciary responsibility.
The Political Influence of ESG
The conversation sheds light on the political undertones of ESG. Most SFOF members are Republicans, reflecting a tendency towards free-market ideologies. The group’s stance is not explicitly partisan but naturally aligns with those who favor market-oriented solutions over centralized state planning.
Fiduciary Responsibility and State Treasurers
State treasurers, as discussed, play a crucial role in managing state finances and are trusted more by the public in financial matters compared to governors or Congress members. Their primary role is to oversee the financial transactions and investments of the state, ensuring they align with the best interests of the state and its citizens.
ESG’s Conflict with Fiduciary Duty
A significant part of the discussion revolves around how ESG principles can conflict with the fiduciary responsibilities of state treasurers. The guests argue that the primary goal of investment should be financial return, not advancing political agendas. This conflict becomes evident in situations where ESG principles lead to investment decisions that may harm the financial interests of the states and their residents.
The Rising Concerns Over ESG Investments
In the Jordan B. Peterson Podcast episode #344, Dr. Peterson and Derek Kreifels, CEO of the State Financial Officers Foundation, discuss the growing influence of Environmental, Social, and Governance (ESG) investing. This approach has gained traction among large financial entities like BlackRock, often driving a political agenda that conflicts with free-market principles and fiduciary responsibilities.
Political Dimensions of ESG
The podcast highlights the political implications of ESG, with most State Financial Officers Foundation (SFOF) members aligning with Republican, free-market ideologies. This alignment is not explicitly partisan but reflects a preference for market-oriented solutions over centralized state planning.
Role of State Treasurers and Fiduciary Duties
State treasurers, responsible for managing state finances, face a dilemma. The podcast points out that while their primary role is to ensure investments align with state interests, ESG principles often lead to choices that may not be financially beneficial for the states they represent.
ESG’s Conflict with Fiduciary Duty
Kreifels argues that ESG principles conflict with the fiduciary duties of state treasurers. The primary goal of investment, according to this view, should be financial return, not advancing political agendas. This conflict becomes evident in cases where ESG principles guide investment decisions that potentially harm states’ financial interests.
Future of ESG Investing
The discussion concludes by reflecting on the future of ESG investing and its implications for financial governance. The rise of ESG has sparked debates about the role of financial institutions in political and social issues, challenging traditional boundaries between business, governance, and ethics.
The Global Influence of ESG Investment Strategies
In this section of the Jordan B. Peterson Podcast #344, Dr. Jordan Peterson and Derek Kreifels, CEO of the State Financial Officers Foundation, delve deeper into the intricacies of Environmental, Social, and Governance (ESG) investing. The discussion underscores the global influence of ESG, particularly how large financial entities like BlackRock utilize it to push political agendas, often conflicting with the traditional principles of capitalism and fiduciary responsibility.
The Political Dimensions of ESG
Kreifels emphasizes the political implications of ESG, noting its alignment with certain political ideologies. The podcast highlights the tendency of State Financial Officers Foundation (SFOF) members, mostly Republicans, to favor market-oriented solutions over centralized planning, illustrating the inherent political bias in ESG strategies.
ESG and Fiduciary Duty Conflicts
A significant part of the podcast focuses on the conflict between ESG principles and the fiduciary duties of state treasurers. Kreifels argues that investment should prioritize financial return over political agendas, emphasizing the potential harm ESG principles can cause to states’ financial interests.
Future Implications of ESG Investing
The conversation concludes with reflections on the future of ESG investing and its broader implications for financial governance. The growing influence of ESG invites debates about the role of financial institutions in political and social issues, challenging traditional norms of business, governance, and ethics.
The Global Reach and Political Dimensions of ESG
In the final third of Jordan B. Peterson’s podcast episode #344 with guest Derek Kreifels, they delve into the wider implications of Environmental, Social, and Governance (ESG) investing on global markets and society. The conversation highlights how ESG, initially appealing for its ethical overtones, is increasingly wielded by large financial entities like BlackRock to advance political agendas, often conflicting with traditional capitalism and fiduciary duties.
The Intricacies of ESG Investment Strategies
The podcast explores the intricate details of ESG investing. Kreifels explains how this approach has extended beyond ethical investment to a tool for pushing political narratives, particularly in environmental and social issues. The discussion also touches on how ESG is used by corporations to align with certain political ideologies, reflecting a bias that deviates from the principles of free-market capitalism.
Fiduciary Duties Versus Political Agendas
A significant part of the discussion focuses on the conflict between ESG principles and the fiduciary responsibilities of investors, particularly state treasurers. The podcast argues that while ESG might appear socially responsible, it often leads to investment decisions that may not align with the financial interests of the stakeholders, thus compromising fiduciary duty.
The Future Landscape of ESG Investing
The conversation concludes with reflections on the future trajectory of ESG investing. Peterson and Kreifels discuss how the growth of ESG invites debates about the role of financial institutions in political and social issues, challenging the traditional norms of business, governance, and ethics.