Difference between LDS investing and ESG investing? It’s transparency, George Pyle writes.

Free market Utahns should see that openness in investing is good for everyone.

More than a few of my loyal Twitter followers tell me it is absolutely none of my business — or the business of The Salt Lake Tribune or the United States government — how The Church of Jesus Christ of Latter-day Saints spends or invests its money.

But, according to several members of the Utah Legislature, it is the state’s business how banks, other money managers and individuals spend or invest their money.

Clearly, this is the financial version of “Free speech for me but not for thee.” And it demonstrates how it is impossible to keep politics out of either religion or the financial world.

The Tribune’s Editorial Board recently put forth an opinion titled “Those who give to the LDS Church deserve an accounting of their money.” It argued news that had been dribbling out about the size of the LDS Church’s investment portfolio, managed by a company it owns called Ensign Peak Advisors, was serious enough that the church needed to be completely open with its own members and with federal regulators.

Several unhappy and, in some cases, downright angry comments followed. The general tenor of which might be summed up as, “The @LDSchurch doesn’t owe the failing, propaganda-ridden, sorry excuse for a newspaper @SLTrib a damn thing.”

The United States Securities and Exchange Commission would like a word.

Actually, it had one, released a couple of days after the editorial was published, in which they noted the LDS Church had agreed to pay a fine of $1 million, and Ensign Peak an additional $4 million, for violating rules that require such investment portfolios to file full and accurate reports with the SEC.

The violation was an intricate scheme, the SEC said, where the church went to great trouble to cook up a baker’s dozen of phony companies, with sham addresses, supposedly run by investment managers who actually had zero say in where the money went.

It was all to make it difficult for anyone outside the church hierarchy to know just how much money it has in its investments. Leaders were afraid, we are told, that if members knew just how ginormous its investment sock was they might stop paying the 10% of their income their faith demands of loyal members.

Maybe. But that’s not why the feds care. Or why you should.

The SEC isn’t worried that the faithful, or the press, won’t know how rich the LDS Church is. It is worried that any outfit with that much stock might decide to dump, oh, say, its $2 billion in Apple stock, or its nearly $2 billion in Microsoft shares, causing big ripples throughout the market that could crush smaller investors and seriously damage the corporations affected.

If Ensign pretends it doesn’t have $2 billion in Apple or Microsoft, that makes the market much more difficult for investors to read and for regulators to oversee. And making the market easy to read is the SEC’s job.

Meanwhile, Utah State Treasurer Marlo Oaks and some lawmakers are waving the bloody shirt of something called ESG, or environmental, social and governance, which they say is “weaponizing” investment decisions. There are a few bills to ban or limit the practice which, even if passed, won’t be much more than MAGA posturing.

ESG is really a bunch of analysis and reporting used by outfits that move lots of money around, and other outfits that sell them information, to take the measure of various corporations through a lens of whether they are environmentally responsible, socially conscious and well-governed.

It’s information that investors, big and small, can choose to use to decide which companies’ stock to buy, or avoid. There’s no government agency or rule telling anyone how or if to use that information. It’s just there if they want it. To make their own decisions with their own money, or money they manager for other people. Just the way the marketplace is supposed to work.

Utah’s fear that some investors might want to steer clear of fossil fuel companies, say, or gun manufacturers is willfully ignorant of the fact those decisions are none of the state’s business. Especially a state that supposedly is all about the free market.

A lot of ESG is for show, what liberal critics call “greenwashing,” to make corporations and banks seem more environmentally friendly than they actually are. There is still a lot of money in oil and gas.

But there is also a cold calculation to it. ESG, when taken seriously, is an attempt to be the first to invest in new opportunities instead of the last to still be putting money in dying industries. And putting your money in things that will save the world, rather than hasten its demise, must also have an appeal.

Also, as Dr. Strangelove might say, the whole point of ESG is lost if you keep it a secret. The whole idea is transparency in investing. Which the opposite of what the LDS Church is in trouble for.

George Pyle, reading The New York Times at The Rose Establishment.

George Pyle, opinion editor of The Salt Lake Tribune, would gladly pay you Tuesday for an oat milk latte today.


Twitter, @debatestate