
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.
Read Article 