Story of the Week: May 2022

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May 28, 2022 - ESG's power grows as banker is canceled for talking sense on climate change 
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May 28, 2022 - ESG's power grows as banker is canceled for talking sense on climate change 

ESG's power grows as banker is canceled for talking sense on climate change by Rupert Darwall Appeared in the New York Post on May 24, 2022 Gina's Thoughts Stuart Kirk, head of Responsible Investment at HSBC made headline news for speaking out against the ESG and environmentally-charged investment movement.  ESG has been and is being weaponized to drive the divestment agenda.  As Rupert Darwall notes in his article, "central banks and financial regulators are using every regulatory weapon in their armories to suppress investment in fossil fuels and direct capital flows toward renewables like wind and solar."  The result of the ESG driven divestment movement has not been what was hoped for.  Oil and gas demand is up and emissions are up too.  Over 80% of economic life is powered by oil and gas.  Canadians should take a cue from Mr. Kirk and stand up for our oil and gas companies and invest in them for the betterment of the environment, Canadians and the world.
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May 21, 2022 - Natural gas to be classed as
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May 21, 2022 - Natural gas to be classed as "green" investment to boost North Sea

Natural gas to be classed as "green" investment to boost North Sea by Rachel Millard Appeared in The Telegraph on May 13, 2022 Gina's Thoughts "A lot of investors with ESG [environmental, social and governance] targets are divesting from fossil fuels - we don't want that to be done at the detriment of natural gas." So says Kwasi Kwarteng, the Business Secretary for the UK Government.   Mr. Kwarteng, and the UK Government are following in the footsteps of the EU who labelled natural gas and nuclear electricity generation as "green" earlier in the year.  Does anybody reflect on how absurd this whole conversation has become?  We are for ESG.  ESG says fossil fuels are bad.  Natural gas is a fossil fuel.  Therefore natural gas is bad.  But wait, we need natural gas and we want investors to invest in natural gas.  So, let's say it is an exception and call it green.  This brings to mind this conversation from Lewis Carroll's Through the Looking-Glass:  "'When I use a word,' Humpty Dumpty said, in rather a scornful tone, 'it means just what I choose it to mean — neither more nor less.' 'The question is,' said Alice, 'whether you can make words mean so many different things.'"
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May 14, 2022 - An inconvenient truth about ESG Investing 
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May 14, 2022 - An inconvenient truth about ESG Investing 

An inconvenient truth about ESG Investing by Mark Yamada Appeared in Investor's Edge Magazine on May 9, 2022 Gina's Thoughts Investments in ESG (Environmental, Social, Governance) funds have seen explosive growth over the past several years.  "At US$35 trillion, ESG already represents one-third of global assets under management, according to Bloomberg Intelligence, with more than 40% growth projected through 2025."  Investors believe they are "Doing Well, by Doing Good" but they are likely doing neither.  The past decade has seen ESG being weaponized to drive divestment in oil and gas companies.  The author of the article succinctly summarizes how divestment is not "Doing Well, by Doing Good".  "The result may be that divestment does more in terms of virtue signalling than investing impact.  It can also be costly for portfolios.  While hundreds of institutions have committed to divesting some or all of their fossil fuel investments, the implications for portfolios -- particularly in Canada, where oil and gas make up 13% of the S&P/TSX Composite Index -- can be significant when prices for those commodities rise as they have over the past two years."  Divestment has no impact on emissions reductions and it can cost the investor on the returns side; in other words "Not Doing Well and Not Doing Good".
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May 7, 2022 - Which energy assets will be stranded?
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May 7, 2022 - Which energy assets will be stranded?

Which energy assets will be stranded? by Terence Corcoran Appeared in the Financial Post on May 4, 2022 Gina's Thoughts Corcoran turns the concept of stranded assets on its head.  Stranded assets is a term Mark Carney, former Governor of the Bank of Canada and the Bank of England used to describe coal, oil and gas that should be divested of and left in the ground.  "If fossil fuels persist and continue to dominate the world energy market, other assets could end up stranded, particularly energy assets that are already non-viable and cannot survive today without massive injections of state funding."  US investment giant Warren Buffett is betting big on oil and gas and he is not alone.  "In March, the Financial Times reported that global banks poured US $750 billion into fossil fuel finance.  On the markets, the S&P/TSX Capped Energy Index has doubled over the last year from 120 to 240 and rose another nine points to 250 on Tuesday -- its highest point since 2014 -- after Imperial Oil nearly tripled its quarterly profits and Brent futures hit US$106 a barrel.  In the U.K., the Conservative government continues to talk of boosting North Sea oil and gas activity."  Canadian oil and gas companies have been reporting very promising financial results.    With growing energy demand and an underinvestment in new supply, fossil fuels are nowhere near being obsolete or stranded.
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