Story of the Week: January 2022

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January 29, 2022 - Why the Sustainable Investment Craze is Flawed
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January 29, 2022 - Why the Sustainable Investment Craze is Flawed

Why the Sustainable Investment Craze is Flawed by James Mackintosh Appeared in the Wall Street Journal on January 23, 2022 Gina's Thoughts In the first in a series of columns about the failed promise of funds guided by ESG principles, the author makes some strong points that underscore why the ESG fossil fuel divestment movement is flawed. "The financial industry has spotted an opportunity to make money by helping people feel good about themselves. Despite claims to the contrary, these investments don't do much to make the world a better place." The divestment movement is all about "noisily" pushing pension funds, university endowments and banks to shift investment dollars out of oil and gas. The flaw is that these investment shifts do nothing to affect demand for hydrocarbons. On the supply side, "some of the biggest sources of fossil fuels are immune to shareholder pressure anyway. Much of the world's oil is pumped by government-controlled companies, led by Saudi Arabia and Russia." Taking investment dollars away from Canadian hydrocarbon companies in the name of ESG does nothing to change the demand side and does everything to ensure that the oil and gas supply comes from countries with lower environmental standards. A wholesale divestment from Canadian hydrocarbon companies that have high environmental standards, are the largest investors in innovation in Canada, provide some of the highest paying jobs in the sector, contribute a host of other social benefits and adhere to the highest measures of transparency and reporting is anything but ESG investing.
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January 22, 2022 - BlackRock's Climate Stance is About Profits, Not Politics, Larry Fink says
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January 22, 2022 - BlackRock's Climate Stance is About Profits, Not Politics, Larry Fink says

BlackRock's Climate Stance is About Profits, Not Politics, Larry Fink says by Justin Baer Appeared in the Wall Street Journal on January 17, 2022 Gina's Thoughts "In his annual letter to the CEOs of the companies in which BlackRock invests, Mr. Fink said businesses that don't plan for a carbon-free future risk being left behind." The author writes that it is "the quest for long-term returns, and not politics, that animates the money manager's efforts". If it is true that Blackrock's quest for long-term returns guides their investment decisions, they should analyze the demand side of the equation. The International Energy Agency forecasts that oil and gas will continue to make a major contribution to the global energy mix through to 2050. Some forecasts see oil and gas providing 75% of the world's energy mix through to 2100. Demand for hydrocarbons is increasing. Every company and every industry relies on hydrocarbons. A carbon-free future is not currently possible and may never be possible. Striving towards Mr. Fink's utopian vision of a hydrocarbon-free future will not lead to long-term returns and will come with great costs to economies and people around the world.
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January 15, 2022 - Divestment Won't Stop Fossil Fuels - Nor Should It
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January 15, 2022 - Divestment Won't Stop Fossil Fuels - Nor Should It

Divestment Won't Stop Fossil Fuels - Nor Should It by William McNally Appeared in C2C Journal on January 8, 2022 Gina's Thoughts William McNally's thorough and excellent article is perfect for our first Story of the Week of 2022. He talks about the pressure that the fossil fuel sector - oil, gas and coal - is under from all directions of the divestment movement. "From all the rage 'ethical' investing to 'woke' hedge fund managers extolling green energy companies, to world economic leaders stating that fossil fuel assets will become worthless to climate-obsessed politicians intoning their mantra of an 'energy transition' to an all-electric nirvana." Yet, "world crude oil and natural gas prices are zooming, there is a bull market in traditional energy stocks and credible forecasting agencies are predicting fossil fuels will remain key to global energy security until at least 2100." In true January fashion, McNally asks and answers the question, "What might this portend for the fossil fuel divestment movement?".
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