Story of the Week: December 2022

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December 17, 2022 - HSBC announces plans to halt funding for new oil and gas developments, but Canadian unit will be exempted
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December 17, 2022 - HSBC announces plans to halt funding for new oil and gas developments, but Canadian unit will be exempted

HSBC announces plans to halt funding for new oil and gas developments, but Canadian unit will be exempted by Stefanie Marotta Appeared in The Globe and Mail on December 14, 2022 Gina's Thoughts This is our last SOTW before the holidays and we have some bad news and some good news. First the bad news: HSBC Holdings, the world's eighth-largest bank, announced earlier this week that they will no longer invest in new oil and gas projects. Now the good news: HSBC's Canadian branch is exempt from this new policy and RBC is in the process of buying them. Why is HSBC Canada exempt? Because they are going through a deal with RBC who agreed to purchase the Canadian unit for $13.5 billion at the end of November and you can't force new policy on a division that is in the process of being purchased. Could it also be that HSBC Canada is exempt because of projections for continued growth in oil and gas demand for decades to come? Merry Christmas and Happy Holidays. InvestNow's SOTW will be back in the New Year!
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December 10, 2022 - Watch out for ESG assets that turn out not to be
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December 10, 2022 - Watch out for ESG assets that turn out not to be

Watch out for ESG assets that turn out not to be by Matthew Lau Appeared in the Financial Post on December 6, 2022 Gina's Thoughts "The backlash against ESG investing has finally arrived." This was proclaimed in a NY Times editorial in August 2022. Fast forward to December and we have Vanguard, the 2nd largest asset manager in the world (after BlackRock) pulling out of both NZAM and GFANZ whose members have committed to reaching net zero carbon emissions by 2050. We have attorney generals (AGs) in the US divesting from the divestors by refusing to put state money in BlackRock's coffers. And, as Matthew Lau writes, we have a "recent backlash against ESG and the multiple definitions and confusing terminology, the overreliance on checklists, the potentially misleading marketing campaigns, and the frequent lack of rigour and accountability." Lau also posits that the investing backlash against ESG is due to ESG's abandonment of fiduciary duty. In a letter to BlackRock, the aforementioned AGs wrote, "BlackRock appears to use the hard-earned money of our states' citizens to circumvent the best possible return on investment." The backlash has begun in the US. Will Canada follow suit?
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December 3, 2022 - BlackRock, UBS Ask to Be Removed From Texas' Energy Boycott List
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December 3, 2022 - BlackRock, UBS Ask to Be Removed From Texas' Energy Boycott List

BlackRock, UBS Ask to Be Removed From Texas' Energy Boycott List by Shelly Hagan and Danielle Moran Appeared in the Financial Post on November 28, 2022 Gina's Thoughts "Don't Mess with Texas." Last year, the Texas state legislature passed a law requiring the state's comptroller to name financial institutions and funds that refuse to do business with energy companies, and potentially divest from them. Energy is a pillar of the state's economy and the state doesn't want to do business with financial institutions that have boycotted energy companies. Now, BlackRock Inc., UBS Group AG and other major financial firms are taking steps to be removed "from the list of companies that Texas has classified as boycotting the fossil fuel industry". Faced with the prospect of losing business in the booming state, these financial firms are writing letters and making submissions to prove they support the energy industry. The law allows the state to "divest from the divestors" and the divestors don't like it.
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