Militant ESG Biggest Threat To Solving The Green-Energy Transition

It’s easy to say no to an investment likely to generate hostile news. It’s simple to go along with increasingly Militant ESG rhetoric on gas to avoid negative headlines.

But – we will fail to reach Carbon Net-Zero unless gas remains part of the transition equation and governments get a grip on energy strategies.

Yet again I’m going to highlight how blinkered ESG (Environment, Social and Governance) thinking could be driving us all toward a climate and economic disaster.

Let me share a few snippets from what’s been a fascinating week for Energy, climate change, and energy transition.

• Oil headed for $100.
• Chinese coal production has hit a record high.. up 7.2% YoY to 390 million tonnes in Dec 2021. It will use over 4 billion tons this year. It used less than 50 million tons per month in 2000.
• France, Germany, and the UK all fired up coal stations due to a January-blocking high shutting down the wind.
• 1/5th of France’s nuclear power stations are currently “under repair”. Germany’s are closed. The UK’s new ones look stalled in cost overrun.
• UK consumers face a brutal cost of living crisis on the back of soaring energy bills.
• The Scots’ government is celebrating a windfall of £700mm from selling a clutch of offshore wind licenses.
• The EU may withdraw low CO2 Natural Gas and Nuclear power from its green energy taxonomy.
• A La Nina cooling event meant 2021 was only the 7th warmest year on record – but the last seven years have been the warmest series on record. [This is patently untrue and based on a data-free press release run unquestioningly by the MSM. –CCD ed.]

And, Larry Fink (the brains behind the biggest investor on the planet; BlackRock) was lambasted by ESG and environmental zealots for the heinous thought-crime of suggesting Gas might be part of the ongoing energy transition.

Shock. Horror… Burn the Heretic!

I genuinely fear the tail is wagging the dog when it comes to climate change and energy transition.

There is a distinct lack of joined-up planning to solve the complex issues of a) weaning the global economy off fossil fuels while b) maintaining economic growth.

Governments are failing to direct energy-transition strategies necessary for part a. They have effectively surrendered the narrative to populists and environmentalists, who completely ignore the economic growth (part b) of transition.

The populists now own the climate change agenda – and I congratulate them for raising awareness.

They are well-intentioned but have set a Militant ESG tone oblivious to the reality that a chaotic mass shutdown of energy sources they object to, (primarily fossil fuels but also nuclear), could leave the global economy shuttered and in an even worse state than rising global temperatures.

They have seized the agenda because no one was willing to object.

There are solutions, and net-zero can be achieved.

Recently I covered how we can get to Carbon Net-Zero in the Morning Porridge. We can innovate a mix of the downright obvious and relatively cheap schemes to save us from climate change chaos.

We can become more efficient, reforest vast swathes of land, improve soils, build more renewables while saving costs, time, effort, and resources by defocusing the expectations being placed on expensive unproven technologies.

My note was written based on research from the top energy analyst; Thunder Said Energy. You can read the article here: “Energy Transition and Why We Should Not Panic.”

One of the key points for an affordable and effective Net-Zero Carbon by 2050 plan would be to swiftly replace the worst carbon polluter, Coal, with cleaner Natural Gas, and over the coming decades gradually replace Gas with new more efficient, and diverse renewable power.

To speed up the process we could invest more and more thoughtfully in Nuclear.

Unfortunately, as we saw at the COP26 conference, Militant ESG is close to achieving a stranglehold on investment decisions. Gas is Fossil therefore Gas is Evil. Nuclear is not much better.

In every single discussion I have with fund management professionals – my day job – the subject of ESG comes up. Chief investment officers and senior fund managers all tell me the same things.

Their investors insist on knowing how their money is being invested in a green and sustainable manner – because their investors apparently want to be green.

Their investment committees block anything with a whiff of ESG difficulty. ESG is now the single most important investment parameter when making investments.

And no Asset Management or Corporate CEO wants to risk facing down angry environmental protesters because he/she has proposed or funded gas or nuclear investments.

It’s easier to say no than it is to say yes when it comes to “challenging investments” – which leads to underinvestment.

Read rest at Morning Porridge