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