Sustainability, Energy Transition, ESG | Weekly Thematic

ESG Investing Stinks! We need something different to drive change
July 20, 2022
Companies Mentioned:
OMV, Repsol, BP, Shell, TotalEnergies, ENI, Tullow Oil, Gevo, Freeport McMoRan, Consumers, Hexion, Lummus, ExxonMobil, Yara, VW, Redwood
Commodities Mentioned:
Subjects Covered:
Recycling, Renewables, Carbon Capture, Emissions, New Energy, The Hydrogen Economy, ESG Investing, Climate Litigation, Clean Fuels

C-MACC Weekly “CRETER” (Climate etc.)

ESG Investing Stinks! We need something different to drive change

  • We argue ESG investing is doing very little to support environmental initiatives, penalizing energy companies with transition plans rather than helping them.
  • ESG and green money is unavailable for most projects that do not exhibit “safe” returns – in the current setting, almost everything does not fit this requirement.
  • Public companies with well-articulated transitions strategies are hamstrung by public valuations, limiting degrees of freedom, and take private options look good.
  • Start-ups are equally hampered by shrinking risk appetite on both inflation and higher borrowing costs – we want energy transition but won’t pay for it.
  • Otherwise, we look at metals’ prices, the cost of chemical recycling, methane emissions, renewable natural gas, and renewable power costs.

See PDF below for all charts, tables and diagrams

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