December 2023 Newsletter
News & Commentaries by Ron Robins
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New Podcasts:
- Analysts’ Impact, ESG, and Healthcare Stock, Picks. And,
- Great ESG Fashion, Infrastructure, and Clean Energy Stocks and Funds!
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Md. comptroller: Climate risk is an investment risk, so why is Congress trying to prevent me from considering it? “As Michael Bloomberg, noted, ‘anti-[environmental, corporate and government] crusaders position themselves as defenders of the free market. But they are attempting to use the government to block private firms from acting in the best interests of their clients.’”
[COMMENTARY] I find it more than amusing that so-called defenders of the free market are frequently calling for restrictions regarding investment policies! What an irony!
Md. comptroller: Climate risk is an investment risk, so why is Congress trying to prevent me from considering it? By Brooke E. Lierman, December 18, 2023, The Baltimore Sun, USA.
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Is the ESG Investment Bubble Bursting? “ESG funds are experiencing a decrease in new inflows and increased closures due to underperformance and investor withdrawal. Regulatory tightening, greenwashing exposure, and a return to oil and gas investments contribute to the declining appeal of ESG funds. Despite previous overperformance, ESG funds are now struggling as investor sentiment shifts back towards traditional energy sectors and increased scrutiny on sustainability claims.”
[COMMENTARY] Investor interest in the ‘essence’ of ESG is only going to increase, though the term ESG might become less used.
Is the ESG Investment Bubble Bursting? By Irina Slav, December 23, 2023, OilPrice, UK.
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Bank of England Takes Strides Towards Green Investments. “In a significant move, it has integrated climate considerations into its corporate bond purchase scheme. The decision has been taken as part of a broader effort by central banks globally to incorporate environmental sustainability into their monetary policy frameworks.”
[COMMENTARY] The Bank of England, the European Central Bank, and a few other central banks are taking steps to assist in reducing climate change impacts on their financial systems. However, the U.S. Federal Reserve has stated no such intent to follow suit.
Bank of England Takes Strides Towards Green Investments, by Saboor Bayat, December 22, 2023, BNN Breaking, Hong Kong.
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Making oil is more profitable than saving the planet. These numbers tell the story, “20% to 50%. That’s the internal rate of return — the money a company will make off the capital it puts into a project — for a company producing U.S. oil and gas right now… By comparison, 5% to 10% (is) how much money… the same company could expect to make if it put money in solar or wind projects at the moment.”
[COMMENTARY] Many banks and financial institutions will not now finance fossil-fuel projects. Hence, there’s a dearth of such new projects. Thus, surviving oil wells and small-scale fossil-fuel development projects can command great returns. Many of these projects are financed with internal cash flows and are not reliant on a bank or outside funding. So, they can be highly profitable at today’s oil prices in particular.
Making oil is more profitable than saving the planet. These numbers tell the story. Camila Domonoske interviewing Dan Pickering, December 12, 2023, npr, USA.
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Top 10 ESG Developments for 2023 “2023 saw terms like “ESG,” “greenwashing,” and “circular economy” come into common use. We also saw a tsunami of other environmental, social, and governance (ESG)-related developments at the international, federal, and state levels.”
[COMMENTARY] This is a useful review of developments in the ESG space during 2023.
Top 10 ESG Developments for 2023, by Amy Antoniolli, J. Michael Showalter, Daniel J Deeb, and Meera Gorjala, December 8, 2023, The National Law Review, USA.
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Unlocking the Hidden Potential in ESG Data. “Being at the forefront of tackling the complex and challenging ESG data landscape presents unique opportunities for investors by helping to expand the investment universe and access more datasets with alpha potential.”
[COMMENTARY] Many ethical and sustainable investors might appreciate the guidance given in this article regarding understanding and analyzing ESG data and information.
Unlocking the Hidden Potential in ESG Data, by Anna-Marie Tomm and Matthew Bell, December 2023, Man Institute, USA.
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America’s Most Responsible Companies 2024. “For the fifth year in a row, Newsweek has partnered with global research and data firm Statista for our annual list of America’s Most Responsible Companies… This year’s top overall position is held by Merck, having an impressive score of 92 out of 100, with Xylem following closely at 91.3 and HP, which held the No. 1 position for the previous four years, maintaining a solid presence in third with a score of 90.3.”
[COMMENTARY] This Newsweek ranking is not as widely known as some others but does offer some useful insights for investors.
America’s Most Responsible Companies 2024, by Nancy Cooper, December 2023, Newsweek, USA.
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Featured Book
Beyond the ESG Portfolio: How Wall Street Can Help Democracies Survive. “It is easy to unintentionally finance autocrats by using benchmark indices, which often include bonds and stocks of countries slipping down the democracy rankings. Despite best intentions, an investor may be investing in Russia’s invasion of Ukraine or supporting a leader like Hugo Chavez without realizing it. This is the kind of situation Beyond the ESG Portfolio sheds clear light on.”
For more information, visit Beyond the ESG Portfolio: How Wall Street Can Help Democracies Survive, by
