"How to Calculate Your Individual ESG Score to ensure that your Digital ID 'benefits' and money are accessible"

[Tom Nolan + 2,441]

Biden Screws Americans on their 401(k)s with ESG regulations

(It was sneaky...happening on Thanksgiving week.  See this:  https://www.zerohedge.com/political/thanksgiving-biden-stuffs-americas-401ks-esg

WSJ editorial: Biden Puts Your 401(k) to ESG Work

The Biden regulatory machine doesn’t rest, even in Thanksgiving week. On Tuesday the Labor Department finalized a rule that empowers retirement plan sponsors to invest based on environmental, social and governance (ESG) factors and put your 401(k) to progressive political work.

The Labor Department casts its rule as a mere clarification of the 1974 Employee Retirement Income Security Act (Erisa), which requires that retirement plan sponsors act “solely in the interest” of participants and beneficiaries. A Trump Labor rule barred retirement managers from considering factors that weren’t material to financial performance and risk.

Asset managers and union pension plans claimed the Trump rule limited their discretion to consider such ESG factors as climate, workforce diversity and labor relations. The Biden DOL says it created a “chilling effect” on ESG investing. Its replacement rule gives plan sponsors nearly unlimited discretion and legal protection to invest based on these often political considerations.

“A fiduciary may reasonably conclude that climate-related factors” including “government regulations and policies to mitigate climate change, can be relevant to a risk/return analysis of an investment,” the rule says. Ditto workforce diversity, inclusion and labor relations since they may affect employee hiring, retention and productivity.

….

The main point of the Biden rule is to give legal protection to retirement plan fiduciaries that invest based on ESG. A secondary goal is to steer more retirement savings into ESG funds that often charge higher fees by allowing retirement sponsors to offer them as default options in 401(k) plans. Workers automatically enrolled in default funds can opt out, but they usually don’t.

AND

FTX had stellar ESG ratings right before implosion

FTX Bankruptcy Exposes ESG’s Flaws

ESG ratings agencies such as S&P Global, MSCI, Sustainalytics, and Truvalue Labs calculate scores for individual companies and compile ESG indices based on a variety of factors such as the degree of diversity among board directors, exposure to greenhouse gas emissions, firearms, and human rights violations. According to an ESG score from Truvalue Labs, FTX scored higher on “leadership and governance” than ExxonMobil. However, FTX’s new CEO overseeing the bankruptcy stated, when talking about FTX, that he had never “seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information.”

Although still under investigation, FTX has been accused of several corporate governance failures. The company lacked a coherent board of directors. It also allegedly transferred customer funds to crypto hedge fund Alameda Research to conduct speculative transactions, failed to establish proper cash management procedures, and possessed unaudited financials.

When Sam Bankman-Fried (SBF) led FTX, the company prided itself on its social and environmental activism. The FTX Foundation, FTX’s charity arm, stated its dedication to climate change, animal welfare, and future pandemic prevention. The Foundation established projects such as the Future Fund, which was funded mainly by FTX’s top leaders, to “make grants to nonprofits and individuals, and investments in socially-impactful companies.”

While noble causes at face value, the board of directors’ fiduciary duty is to its shareholders and ensuring the maximization of financial returns. Too much focus on ancillary ESG factors distracts from a company’s fiduciary duty.

WSJ editorial: Sam Bankman-Fried Becomes an ESG Truth-Teller

Mr. Bankman-Fried is also acknowledging that he genuflected to regulators and Democratic lawmakers to win political protection. ESG ratings company Truvalue Labs even gave FTX a higher score on “leadership and governance” than Exxon Mobil, though the crypto exchange had only three directors on its board. The directors were Mr. Bankman-Fried, another FTX executive and an outside attorney. Truvalue Labs says FTX was given an overall “laggard” score.

“ESG has been perverted beyond recognition,” Mr. Bankman-Fried confessed in an interview this week with Vox in which he also acknowledged that his advocacy for strong crypto regulations was “just PR.”

He said he feels “bad for those who get” harmed by “this dumb game we woke westerners play where we say all the right shiboleths [sic] and so everyone likes us.” Ah, yes, the poor saps who invest in companies because they claim to be sustainable.

JDSupra: Evaluating ESG In The Aftermath of FTX

At this time, there is no fully agreed-upon measure of what items should be evaluated in determining an ESG score, and there also is no agreement on how these items should be evaluated. That remains up to the individual entity itself, which obviously causes problems. There are organizations that try to publish their own guidelines about how to do this, but so far there is no “rating agency” using metrics generally agreed-upon in the same way as Moody’s and Standard & Poors work in the financial agency (although we saw in 2008 how susceptible they are to malfeasance).

Now comes FTX, which in one day literally wiped out billions of dollars of shareholder value, and is threatening the entire crypto-currency industry. As more information comes out about FTX, it becomes more likely that even the most basic levels of corporate governance and institutional transparency may not have been met. Indeed FTX’s new CEO, John J. Ray III, wrote in a bankruptcy court filing that “never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here.”

What makes this failure at FTX relevant to the corporate, governmental and airport world is that, just last week, it became public that one of the agencies trying to rate companies for ESG, Truvalue Labs, had given FTX a higher ESG score for governance than it had given to Exxon Mobil. Again, this score was given to FTX by an ESG rater despite the fact that it appears FTX had almost no level of corporate governance.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 

The Employee Retirement Income Security Act (ERISA) of 1974 is a U.S. federal tax and labor law that establishes minimum standards for pension plans in private industry.

ERISA imposes a fiduciary duty on these players, and in one particular, the employers in selecting appropriate funds for default choices in 401(k)s. Before this latest move by the Biden admin, the fiduciary duty meant the focus was the financial performance of the fund (and thus focused on the investment strategy and the fees charged), and so this kept a rein on how outlandish the funds could get.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Points and Figures: The Newest Web: ESG Investing is a Fraud

But, if you are a mom-and-pop, you might put your money in a Fidelity-type fund. Due to the change in language, the manager of that fund can now invest into companies that will yield zero or negative return and suffer no consequences from doing it. Not only that, the government has shielded them from legal consequences as well.

The line about how the Trump administration verbiage “chilled” investment into these sorts of entities is telling. The language was put in to prevent fraud. That bad orange man Trump “limited their financial discretion”. Oh, the humanity. They might actually have to compete and earn the best return on investment for their customers.

The people in the game can’t play the game if they have to suffer legal consequences for playing it. They have to compete. They don’t want to compete because they might lose.

All this stuff that is being rammed down your throat invites fraud. It’s an engraved invitation with no RSVP on it. Come when you want as long as you toe the line. When you don’t have standards, you can’t have competency. If you can’t be held accountable, then you can do anything you want in the name of whatever cause du jour is the current thing.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Some script taken from...  https://marypatcampbell.substack.com/p/esg-and-erisa-pity-the-poor-tort

Edited November 27, 2022 by Tom Nolan

[Tom Nolan + 2,441]

This was a sneaky approach to further an agenda.  This Biden addition legally protects these retirement funds from lawsuits, because most of us realize that ESG rankings are corrupt, twisted, metric hype.  Behind the scenes is Blackrock, WEF and other elite who are pushing this ESG agenda.  The demonization of those corporations who do not follow ESG rankings are becoming blacklisted.  Biden strengthens the ESG narrative...that is the intent.

(It was sneaky...happening on Thanksgiving week.  See this:  https://www.zerohedge.com/political/thanksgiving-biden-stuffs-americas-401ks-esg

WSJ editorial: Biden Puts Your 401(k) to ESG Work

The Biden regulatory machine doesn’t rest, even in Thanksgiving week. On Tuesday the Labor Department finalized a rule that empowers retirement plan sponsors to invest based on environmental, social and governance (ESG) factors and put your 401(k) to progressive political work.

The Labor Department casts its rule as a mere clarification of the 1974 Employee Retirement Income Security Act (Erisa), which requires that retirement plan sponsors act “solely in the interest” of participants and beneficiaries. A Trump Labor rule barred retirement managers from considering factors that weren’t material to financial performance and risk.

Asset managers and union pension plans claimed the Trump rule limited their discretion to consider such ESG factors as climate, workforce diversity and labor relations. The Biden DOL says it created a “chilling effect” on ESG investing. Its replacement rule gives plan sponsors nearly unlimited discretion and legal protection to invest based on these often political considerations.

“A fiduciary may reasonably conclude that climate-related factors” including “government regulations and policies to mitigate climate change, can be relevant to a risk/return analysis of an investment,” the rule says. Ditto workforce diversity, inclusion and labor relations since they may affect employee hiring, retention and productivity.

….

The main point of the Biden rule is to give legal protection to retirement plan fiduciaries that invest based on ESG. A secondary goal is to steer more retirement savings into ESG funds that often charge higher fees by allowing retirement sponsors to offer them as default options in 401(k) plans. Workers automatically enrolled in default funds can opt out, but they usually don’t.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Here is the Dept of Labor ...

https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/resource-center/fact-sheets/final-rule-on-prudence-and-loyalty-in-selecting-plan-investments-and-exercising-shareholder-rights

https://www.dol.gov/sites/dolgov/files/ebsa/temporary-postings/prudence-and-loyalty-in-selecting-plan-investments-and-exercising-shareholder-rights-final-rule.pdf

~~~~~~~~~

...and EXCERPT

ESG Fund Concerns

Some have raised concerns about the cost and performance of ESG investment funds. In response to a related Securities and Exchange Commission request for public input on climate change disclosures by public companies, Jean-Pierre Aubry, assistant director of research at the Center for Retirement Research (CRR) at Boston College, wrote in a 2021 comment letter about his concern over regulations that "would give credence to the army of asset managers currently promoting ESG investing to retail and institutional investors…."

ESG research by the CRR, he added, found "the major state and local government pension plans that have incorporated ESG factors into their investment policies underperformed those that did not. The study also finds that most retail ESG funds have higher fees and worse performance than similar index funds."

https://www.shrm.org/resourcesandtools/hr-topics/benefits/pages/dol-final-rule-rolls-back-restrictions-on-retirement-plans-use-of-esg-factors.aspx

[Tom Nolan + 2,441]

Thursday Dec 1st - Bloomberg

Florida Will Pull $2 Billion of Assets From BlackRock Over ESG

https://finance.yahoo.com/news/florida-pull-2-billion-assets-180630120.html

https://archive.ph/Xmjuo

Florida Will Pull $2 Billion of Assets From BlackRock Over ESG

(Bloomberg) -- Florida will pull $2 billion worth of state assets managed by BlackRock Inc., accelerating Republicans’ fight with the world’s largest money manager over its ESG investing practices.

The state treasury will immediately have Florida’s custody bank freeze about $1.43 billion worth of long-term securities and remove BlackRock as the manager of approximately $600 million worth of short-term overnight investments, Florida Chief Financial Officer Jimmy Patronis said in a statement on Thursday. The pullback is the latest step in a broader fight led by Republican Governor Ron DeSantis against corporations that embrace environmental, social and corporate governance values.

“I need partners within the financial services industry who are as committed to the bottom line as we are – and I don’t trust BlackRock’s ability to deliver,” Patronis said in the statement.

“Using our cash, however, to fund BlackRock’s social-engineering project isn’t something Florida ever signed up for,” he said. “It’s got nothing to do with maximizing returns and is the opposite of what an asset manager is paid to do. Florida’s Treasury Division is divesting from BlackRock because they have openly stated they’ve got other goals than producing returns.”

Reuters reported Florida’s planned divestiture earlier. The Florida Department of Financial Services manages approximately $60 billion in taxpayer money.

Ed Sweeney, a spokesperson for New York-based BlackRock, said the firm is “surprised” by the decision given the strong returns the company has delivered for Florida the last five years.

ESG Trigger

Republicans are ratcheting up attacks on environmental, social and governance investing this year. BlackRock, which oversees $8 trillion globally, is a major proponent of the strategy and has been a prime target for the GOP. Louisiana and Missouri have pulled a combined $1.3 billion from BlackRock this year. And in August, Texas included the firm on a list of those it says boycott the energy industry.

“Neither the CFO nor his staff have raised any performance concerns,” BlackRock’s Sweeney said in a statement. “We are disturbed by the emerging trend of political initiatives like this that sacrifice access to high-quality investments and thereby jeopardize returns, which will ultimately hurt Florida’s citizens. Fiduciaries should always value performance over politics.”

Back in August, DeSantis and other state officials passed a resolution calling for state funds to be invested without considering the “ideological agenda” of the ESG movement.

“The tax dollars and proxy votes of the people of Florida will no longer be commandeered by Wall Street financial firms and used to implement policies through the board room that Floridians reject at the ballot box,” DeSantis said at the time.

The move follows other similar clashes with corporate giants, such as PayPal Holdings Inc. and Walt Disney Co. DeSantis is seen as a key rival of Donald Trump for the 2024 Republican presidential nomination. The governor won a landslide re-election victory in November promising to battle what he called “woke ideology” being promoted by Wall Street banks, asset managers and big-tech companies in Florida.

On Wednesday, BlackRock’s Fink said he’s been working to counter criticism from across the political spectrum for BlackRock’s support of sustainable investing. Republicans have retaliated against his firm’s embrace of what they’ve described as “woke” capitalism, while Democrats and environmental activists have targeted BlackRock for investing in fossil-fuel producers.

Against that backdrop, BlackRock poured record amounts of money into US political campaigns this year. Fink said Wednesday that he has been spending a lot of time in Washington to “correct the narrative.”

[Tom Nolan + 2,441]

https://oilprice.com/Energy/Crude-Oil/How-Much-Has-Harvards-Fossil-Fuel-Divestment-Cost-It.html

How Much Has Harvard’s Fossil Fuel Divestment Cost It?

By Robert Rapier - Dec 01, 2022, 4:00 PM CST

• Harvard University made news last year when it announced that it had divested from the fossil fuel industry.
• The energy sector has been the top-performing sector for the past 2.5 years.
• Estimates put Harvard’s missed earnings because of its fossil fuel divestment at around $1 billion.

Join Our Community

Over the past decade, climate and environmental activists have pushed organizations to divest fossil fuel investments. According to Gofossilfree.org — an organization that describes itself as “A global movement to end the age of fossil fuels and build a world of community-led renewable energy for all” — to date 1,552 institutions have divested. The total value of the institutions divesting is estimated to be $40.5 trillion. The purpose of the divestment movement is to starve fossil fuel companies of the investments they need to develop new resources. Activists are attempting to address fossil fuel consumption by curbing supplies.

I always thought the divestment movement was an odd way to try to curb fossil fuel consumption. I think about it in the same way I think of shutting down pipelines. When you curb supply without a commensurate decrease in demand, you cause the price of oil and gas to rise. That, in turn, causes the value of the companies that produce the oil and gas to rise.

Increasing the price of a commodity is an effective way to decrease its consumption over time. However, as I have repeatedly noted, politicians who preside over high energy prices tend not to get reelected.

So, even as organizations are taking actions to reduce supply and drive prices higher, politicians — even those who are sympathetic to the cause of reducing fossil fuel consumption — are working to counteract those price increases. A good case in point is President Biden’s release of oil from the Strategic Petroleum Reserve (SPR).

As an investor — and the author of a widely-read investment newsletter (Utility Forecaster) — I preach diversification. Indeed, despite its name, the investments I recommend are diversified across multiple sectors. One of those sectors is the energy sectors. Among other recommendations, I recommend some fossil fuel companies as well as several renewable energy companies.

I count myself among those who want to see the world move away from fossil fuels. However, I still use fossil fuels in my daily life. So do all of those organizations making divestments. It seems hypocritical to me to say that we won’t fund any development, but we still demand the product. The net result of such thinking is to drive up the price of the product, and to increase the likelihood that we will have to obtain that product elsewhere (like Venezuela and Saudi Arabia).

That’s why I still recommend investments in fossil fuel companies. As demand for fossil fuels declines, I will peel back my fossil fuel recommendations. (Incidentally, I also have a significant fraction of my portfolio invested in solar energy companies). In a nutshell, I base my recommendations on what I believe will happen (soaring energy prices), and not what I hope will happen (falling fossil fuel demand).

Recently, I was tabulating the annual performance of stocks recommended by Utility Forecaster. Our model portfolio has significantly outperformed the S&P 500, and it is because of one reason: Our energy holdings.

Year-to-date (YTD), the total return of the energy holdings in the S&P 500 Index — as measured by the Energy Select Sector SPDR Fund (XLE) — is +70.8%. (These returns include dividends and splits, if applicable). Over that same timeframe the S&P 500 is down 15.5%.

But, that overall S&P 500 return is being helped by the energy sector. If you omit the energy sector’s returns from the S&P 500, the performance is even worse. The S&P 500 is top-heavy with technology companies, which make up over a quarter of the index weight. That sector is down 22.6% YTD. The communications services sector is down 34.9% YTD.

What does this mean? Any organization that divested energy sector companies for companies in the rest of the S&P 500 in the past few years cost themselves a lot of money.

Harvard University made news last year when it announced that it had divested from the fossil fuel industry. In a September 9, 2021 letter, President Lawrence Bacow said that as of June the university was no longer making direct investments in companies that explore or develop fossil fuels. He added that existing fossil fuel investments “are in runoff mode and will end as these partnerships are liquidated.”

I confess I would be far more impressed if he had announced that Harvard and its employees would no longer use fossil fuels, but that takes a different sort of commitment. Divestment feels painless, except it isn’t. There are unintended — if predictable — consequences.

Thus, the sector that Harvard and many other organizations divested has soared, while the rest of the stock market has been in a bear market. So, there have been real financial consequences for this decision.

Related: Scientists Find Two Completely New Minerals On Meteorite

For example, in Harvard’s 2020 fiscal report, a reported 2.6% of the university’s $41.9 billion endowment was in natural resources. Assuming this was primarily in fossil fuels, that means Harvard had about $1.1 billion in that sector.

From June 2021 (Harvard’s reported divestment date) through today, the energy sector has a total return of 81.1%. Thus, that portion of the endowment, if invested broadly in the energy sector, could have grown to $2.2 billion. Outside of the energy sector, the rest of the S&P 500 fell by about 8%. If the $1.1 billion that had been invested in the energy sector was invested equally in the S&P 500, it would have declined by $100 million. The divestment difference in this case amounts to $1.2 billion for Harvard.

No matter how you slice it, divestment would have been a bad financial decision for the past few years. The energy sector has been the top-performing sector for the past 2.5 years. Since May 2020, the energy sector is up about 190%. No other sector has returned even half that much. This year, the energy sector has soared, while the rest of the S&P 500 is in a bear market.

If your organization has divested its energy holdings for any other sector, it almost certainly lost money on that transaction. Without a doubt, billions of dollars — if not trillions — have been lost by the organizations doing the divesting. If anything, thus far divestment has helped tremendously enrich the oil and gas industry, as it restricts supply without materially impacting demand.

By Robert Rapier

More Top Reads From Oilprice.com:

• Steel Prices Hammered By China’s Zero-Covid Flip-Flop
• Azerbaijan And Georgia Aim To Become An Energy Bridge To Europe
• Big Oil’s Tax Practices Are Under Fire As Profits Soar

[Tom Nolan + 2,441]

 

[Jeroen Goudswaard + 57]

On 12/2/2022 at 4:46 PM, Tom Nolan said:

https://oilprice.com/Energy/Crude-Oil/How-Much-Has-Harvards-Fossil-Fuel-Divestment-Cost-It.html

How Much Has Harvard’s Fossil Fuel Divestment Cost It?

By Robert Rapier - Dec 01, 2022, 4:00 PM CST

• Harvard University made news last year when it announced that it had divested from the fossil fuel industry.
• The energy sector has been the top-performing sector for the past 2.5 years.
• Estimates put Harvard’s missed earnings because of its fossil fuel divestment at around $1 billion.

Join Our Community

Over the past decade, climate and environmental activists have pushed organizations to divest fossil fuel investments. According to Gofossilfree.org — an organization that describes itself as “A global movement to end the age of fossil fuels and build a world of community-led renewable energy for all” — to date 1,552 institutions have divested. The total value of the institutions divesting is estimated to be $40.5 trillion. The purpose of the divestment movement is to starve fossil fuel companies of the investments they need to develop new resources. Activists are attempting to address fossil fuel consumption by curbing supplies.

I always thought the divestment movement was an odd way to try to curb fossil fuel consumption. I think about it in the same way I think of shutting down pipelines. When you curb supply without a commensurate decrease in demand, you cause the price of oil and gas to rise. That, in turn, causes the value of the companies that produce the oil and gas to rise.

Increasing the price of a commodity is an effective way to decrease its consumption over time. However, as I have repeatedly noted, politicians who preside over high energy prices tend not to get reelected.

So, even as organizations are taking actions to reduce supply and drive prices higher, politicians — even those who are sympathetic to the cause of reducing fossil fuel consumption — are working to counteract those price increases. A good case in point is President Biden’s release of oil from the Strategic Petroleum Reserve (SPR).

As an investor — and the author of a widely-read investment newsletter (Utility Forecaster) — I preach diversification. Indeed, despite its name, the investments I recommend are diversified across multiple sectors. One of those sectors is the energy sectors. Among other recommendations, I recommend some fossil fuel companies as well as several renewable energy companies.

I count myself among those who want to see the world move away from fossil fuels. However, I still use fossil fuels in my daily life. So do all of those organizations making divestments. It seems hypocritical to me to say that we won’t fund any development, but we still demand the product. The net result of such thinking is to drive up the price of the product, and to increase the likelihood that we will have to obtain that product elsewhere (like Venezuela and Saudi Arabia).

That’s why I still recommend investments in fossil fuel companies. As demand for fossil fuels declines, I will peel back my fossil fuel recommendations. (Incidentally, I also have a significant fraction of my portfolio invested in solar energy companies). In a nutshell, I base my recommendations on what I believe will happen (soaring energy prices), and not what I hope will happen (falling fossil fuel demand).

Recently, I was tabulating the annual performance of stocks recommended by Utility Forecaster. Our model portfolio has significantly outperformed the S&P 500, and it is because of one reason: Our energy holdings.

Year-to-date (YTD), the total return of the energy holdings in the S&P 500 Index — as measured by the Energy Select Sector SPDR Fund (XLE) — is +70.8%. (These returns include dividends and splits, if applicable). Over that same timeframe the S&P 500 is down 15.5%.

But, that overall S&P 500 return is being helped by the energy sector. If you omit the energy sector’s returns from the S&P 500, the performance is even worse. The S&P 500 is top-heavy with technology companies, which make up over a quarter of the index weight. That sector is down 22.6% YTD. The communications services sector is down 34.9% YTD.

What does this mean? Any organization that divested energy sector companies for companies in the rest of the S&P 500 in the past few years cost themselves a lot of money.

Harvard University made news last year when it announced that it had divested from the fossil fuel industry. In a September 9, 2021 letter, President Lawrence Bacow said that as of June the university was no longer making direct investments in companies that explore or develop fossil fuels. He added that existing fossil fuel investments “are in runoff mode and will end as these partnerships are liquidated.”

I confess I would be far more impressed if he had announced that Harvard and its employees would no longer use fossil fuels, but that takes a different sort of commitment. Divestment feels painless, except it isn’t. There are unintended — if predictable — consequences.

Thus, the sector that Harvard and many other organizations divested has soared, while the rest of the stock market has been in a bear market. So, there have been real financial consequences for this decision.

Related: Scientists Find Two Completely New Minerals On Meteorite

For example, in Harvard’s 2020 fiscal report, a reported 2.6% of the university’s $41.9 billion endowment was in natural resources. Assuming this was primarily in fossil fuels, that means Harvard had about $1.1 billion in that sector.

From June 2021 (Harvard’s reported divestment date) through today, the energy sector has a total return of 81.1%. Thus, that portion of the endowment, if invested broadly in the energy sector, could have grown to $2.2 billion. Outside of the energy sector, the rest of the S&P 500 fell by about 8%. If the $1.1 billion that had been invested in the energy sector was invested equally in the S&P 500, it would have declined by $100 million. The divestment difference in this case amounts to $1.2 billion for Harvard.

No matter how you slice it, divestment would have been a bad financial decision for the past few years. The energy sector has been the top-performing sector for the past 2.5 years. Since May 2020, the energy sector is up about 190%. No other sector has returned even half that much. This year, the energy sector has soared, while the rest of the S&P 500 is in a bear market.

If your organization has divested its energy holdings for any other sector, it almost certainly lost money on that transaction. Without a doubt, billions of dollars — if not trillions — have been lost by the organizations doing the divesting. If anything, thus far divestment has helped tremendously enrich the oil and gas industry, as it restricts supply without materially impacting demand.

By Robert Rapier

More Top Reads From Oilprice.com:

• Steel Prices Hammered By China’s Zero-Covid Flip-Flop
• Azerbaijan And Georgia Aim To Become An Energy Bridge To Europe
• Big Oil’s Tax Practices Are Under Fire As Profits Soar

Investing is a long game.

- If you bought iShares Oil and Gas (SPOG) on inception (late Dec 2011), you would have made 5% in 11 years.

- If you had bought iShares Global Clean Energy (INRG) on the same day, you would have made 150% in 11 years.

- Both were actually bad investments, as had you bought the S&P (IUSA), you would have made 300% in the same 11 years.

So unless you had a crystal ball, and would have gone in O&G in January, 1 year returns are a poor proxy for investment returns.

[Tom Nolan + 2,441]

5 hours ago, Jeroen Goudswaard said:

Investing is a long game.

- If you bought iShares Oil and Gas (SPOG) on inception (late Dec 2011), you would have made 5% in 11 years.

- If you had bought iShares Global Clean Energy (INRG) on the same day, you would have made 150% in 11 years.

Jeroen, You make a valid, good point about long-term investing.  Especially, when for years, "free money" swamps the markets.

Regarding iShares Global Clean Energy (INRG) then see...Part 2 of the BLACKROCK SERIES.  (CTRL + F search box for article:  iShares)

But many people worship the Elite Controllers of the Climate Change narrative and of the Economy...You should read Part 2 of the BLACKROCK SERIES.  Some people worship their enslavers.  I am not saying that you worship them, but if you worship the Climate Change narrative, then you certainly love your elite masters.

 

[Tom Nolan + 2,441]

https://www.zerohedge.com/markets/vanguard-quits-climate-alliance-major-blow-woke-investing

Vanguard Quits Climate Alliance In Major Blow To Woke Investing

by Tyler Durden

Thursday, Dec 08, 2022 - 09:25 AM

In a mighty blow to Environmental, Social and Governance (ESG) investing, Vanguard, the world's second-largest asset manager, announced it's withdrawing from a major financial alliance against climate change: the Net Zero Asset Managers (NZAM) initiative.

NZAM, which Vanguard joined in 2021, bills itself as "an international group of asset managers committed to supporting the goal of net zero greenhouse gas emissions by 2050 or sooner, in line with global efforts to limit warming to 1.5 degrees Celsius; and to supporting investing aligned with net zero emissions by 2050 or sooner."

Last month, Consumers' Research joined 13 state attorneys general in filing a complaint against Vanguard with the Federal Energy Regulatory Commission (FERC), charging that the firm was violating its agreement to control utility company shares passively.  

"Committing to net zero isn’t an abstract goal," wrote Will Hild, executive director of Consumers' Research, in a Dec. 1 Wall Street Journal op-ed. "The Net Zero Asset Managers Initiative requires its members to prescribe specific emissions targets for industry sectors, especially utilities."

"The International Energy Agency’s net-zero road map envisions eliminating fossil fuels from electricity generation by 2050. That would require every American utility to remake its operations radically."

Vanguard's exit comes at a time of increased saber-rattling and legal maneuvers by Republicans against investment firms pursuing woke agendas in general and anti-fossil-fuel agendas in particular.

Congressional hearings are in the works, and various state legislatures are readying anti-ESG measures. On Dec. 1, Florida CFO Jimmy Patronis announced the state would withdraw $2 billion in assets managed by BlackRock. "Florida's Treasury Division is divesting from BlackRock because they have openly stated they've got other goals than producing returns," said Patronis. 

Here are two key excerpts from Vanguard's statement about its withdrawal: 

"Industry initiatives [like NZAM] can advance constructive dialogue, but sometimes they can result in confusion about the views of individual investment firms. That has been the case in this instance, particularly regarding the applicability of net-zero approaches to the broadly diversified index funds favored by many Vanguard investors." 

"We have decided to withdraw from NZAM so that we can provide the clarity our investors desire about the role of index funds and about how we think about material risks, including climate-related risks—and to make clear that Vanguard speaks independently on matters of importance to our investors."

That's welcome news. The idea that -- of all firms -- Vanguard would subordinate its investors' interests to those of an international climate change consortium was particularly disheartening. 

An industry maverick: Vanguard founder Jack Bogle is considered the father of the index fund (Photo: Vanguard)

Founded by the legendary Jack Bogle, the firm stands apart with a unique ownership structure in which Vanguard's mutual funds own the Vanguard Group. That structure positions the firm to put the interests of its investors first.

Overlaying an ESG agenda on fund management and proxy-voting betrays Bogle's founding vision, by using investor assets to pursue social goals -- at high risk of harming returns in the process.  

It remains to be seen just how far away from the ESG ledge that Vanguard is stepping. The firm said the exit from NZAM "will not affect our commitment to helping our investors navigate the risks that climate change can pose to their long-term returns."  

Malvern, Pennsylvania-based Vanguard reiterated its commitment to provide specific "products designed to meet net zero objectives." That's how it should be -- Vanguard and others should provide that warped investment approach only to those who specifically seek it out.     

Meanwhile, NZAM still counts most of the world's largest asset management firms among its roughly 290 signatories, including BlackRock, State Street, JPMorgan Asset Management and London-based Legal & General. Fidelity, Pimco and now Vanguard are three notable exceptions.   

As of Nov. 9, NZAM firms represented some $66 trillion in assets, according to the group. The loss of Vanguard -- the world's second-largest asset manager -- puts a $7 trillion dent in that figure. Here's hoping other firms follow Vanguard's lead in charting a new course that puts investors first. 

[Tom Nolan + 2,441]

Carbon Border Adjustment Mechanism (CBAM)

https://www.europarl.europa.eu/news/pt/press-room/20221212IPR64509/deal-reached-on-new-carbon-leakage-instrument-to-raise-global-climate-ambition

EXCERPT

On Tuesday morning, MEPs reached a provisional agreement with Council to set up an EU Carbon Border Adjustment Mechanism to combat climate change and prevent carbon leakage.

According to the deal reached, an EU Carbon Border Adjustment Mechanism (CBAM) will be set up to equalise the price of carbon paid for EU products operating under the EU Emissions Trading System (ETS) and the one for imported goods. This will be achieved by obliging companies that import into the EU to purchase so-called CBAM certificates to pay the difference between the carbon price paid in the country of production and the price of carbon allowances in the EU ETS.

The law will incentivise non-EU countries to increase their climate ambition. Only countries with the same climate ambition as the EU will be able to export to the EU without buying CBAM certificates. The new rules will therefore ensure that EU and global climate efforts are not undermined by production being relocated from the EU to countries with less ambitious policies.

The new bill will be the first of its kind. It is designed to be in full compliance with World Trade Organisation (WTO) rules. It will apply from 1 October 2023 but with a transition period where the obligations of the importer shall be limited to reporting. To avoid double protection of EU industries, the length of the transition period and the full phase in of the CBAM will be linked to the phasing out of the free allowances under the ETS. This will be negotiated later this week in connection with the revision of the ETS and the results integrated into the CBAM regulation.

The scope of CBAM

CBAM will cover iron and steel, cement, aluminium, fertilisers and electricity, as proposed by the Commission, and extended to hydrogen, indirect emissions under certain conditions, certain precursors as well as to some downstream products such as screws and bolts and similar articles of iron or steel.

~~~~~~~~~~~~~~~

https://www.zerohedge.com/geopolitical/eu-reaches-deal-impose-worlds-first-carbon-border-tariff

EU Reaches Deal To Impose World's First Carbon Border Tariff

by Tyler Durden

Wednesday, Dec 14, 2022 - 03:15 AM

"CBAM will be a crucial pillar of European climate policies. It is one of the only mechanisms we have to incentivise our trading partners to decarbonize their manufacturing industry." Mohammed Chahim, European Parliament's lead negotiator on the law, said in a statement. 

 

 

 

 

 

[Tom Nolan + 2,441]

https://www.corbettreport.com/morano-greatreset/

Marc Morano of ClimateDepot.com joins us to discuss COP27, the morphing of the climate scam into the COVID scam, and his new book, The Great Reset: Global Elites and the Permanent Lockdown.

Interview 1773 - Marc Morano Writes The Great Reset

Corbett • 12/12/2022

Watch on Archive / BitChute / Odysee / Rokfin / Rumble / Substack / Download the mp4

SHOW NOTES:
ClimateDepot.com

Marc Morano on The Corbett Report

The Great Reset: Global Elites and the Permanent Lockdown

Introducing Climate TRACE

World Health Organization: One Health

Watch: Anti-UN ‘climate agenda’ protest: Skeptics Morano & Rucker ‘glue’ themselves to museum glass in Egypt & are ‘removed’ by security – Fake handcuffed ala AOC

Who is Bill Gates?

SCIENCE IN CRISIS? | Precipitous fall from Climate, to Vaping to COVID19 (Morano on Regulator Watch)

Good News: Global CO2 Emissions Plummet During Covid-19 Lockdowns. But For How Long?

Avoiding a Climate Lockdown

Jane Fonda Calls For Biden To Act On Climate At Washington Rally

Masks to again be required in Alameda County in certain settings

Interview 1645 - James Corbett on The Delingpod

Meet Paul Ehrlich, Pseudoscience Charlatan

Ehrlich calls for sterilizing agents in the water (NY Times 1969)

[Tom Nolan + 2,441]

https://archive.vn/uYm19

Monday Dec 19, 2022 - Bloomberg

Vanguard Exit Has Lawyers Mapping Out Wall Street’s Top ESG Risk

(Bloomberg) -- At a recent climate-finance meeting attended by Wall Street giants including BlackRock Inc. and Goldman Sachs Group Inc., no one spoke until a lawyer had finished reading out a disclaimer stating the group was not a cartel.

The newly formed ritual is a direct reaction to the increasingly hostile position of the Republican Party toward firms trying to incorporate environmental, social or governance factors into their strategies.

Those attending the latest quarterly meeting of the International Sustainability Standards Board’s Investor Advisory Group, at which the cartel disclaimer was made, were free to discuss how to improve corporate disclosures on sustainability risks after the lawyer finished his statement, according to two people present who asked not to be identified describing a private gathering.

It’s a pattern that’s been repeated for the past few meetings, according to a spokesperson for the IFRS Foundation, the nonprofit that’s overseeing sustainability disclosure standards across the globe. That way, the group can ensure it’s compliant with various anti-competition guidelines around the world, the IFRS spokesperson said.

The effectiveness of the GOP campaign to cajole Wall Street into tip-toeing around climate policies was underlined again this month, when Vanguard Group Inc. withdrew from the world’s biggest climate finance alliance. Not long after, it was excused from a grilling by Republican lawmakers in Texas targeting Wall Street firms they see as pro-climate.

But lawyers advising the finance industry say firms might be better off looking past GOP attacks and instead bracing for the bigger legal risk stemming from inadequate climate strategies.

“For all the talk of antitrust risk,” the bigger concern “flows from not acting in ESG friendly ways, not taking account of climate risk, not adequately preparing for the energy transition and not having a credible pathway to net zero,” Tom Cummins, a partner at law firm Ashurst, said in an interview. “From a litigation perspective, there has been a lot more activity and focus on claims against institutions for failing to take climate seriously.”

Chong S. Park, a partner at Ropes & Gray LLP, said that GOP investigations into the pro-climate actions of firms on antitrust and consumer protection grounds are unlikely to succeed. And that’s in large part because the notion of a “group boycott” of fossil fuels is undermined by the fact that banks and asset managers continue to finance oil, gas and coal companies, he said.

ClientEarth, a group that this year successfully sued the UK government for making net-zero statements that didn’t stack up, is shifting its focus and will next year start targeting the finance industry.

“There is a real issue in how financial institutions’ continued support for polluting industries is compatible with their climate promises and best available science, the fiduciary duties of their directors, prudent management of climate risks and shareholder expectations,” said Megan Clay, lawyer and finance lead at ClientEarth.

Read More: Big Oil Investors Call for More Aggressive Climate Targets

Since its defection from the Net Zero Asset Managers initiative, Vanguard has faced a wave of indignation from climate activists. The firm has tried to reassure stakeholders that it still cares about the climate, and promised to “keep investors informed of our approach through thoughtful insights such as our climate research.” The firm also said it intends to engage with portfolio companies and policymakers, and will continue to provide stewardship reports and regular climate reports.

But such statements seem at odds with Vanguard’s record on climate finance. It committed a smaller share of its managed funds to net zero than any other NZAMi member, with about 96% of its business ignoring emissions goals.

For now, though, Vanguard’s decision to walk out of the net-zero alliance has been rewarded by Republicans, with lawmakers in Texas excluding the firm from an interrogation centered on ESG investing strategies. Executives from BlackRock, NZAMi’s largest member and the world’s biggest asset manager, were summoned to testify.

And no matter the legal risks, Wall Street firms suspected of “ESG collusion” stand to lose business in Republican states. BlackRock has already had contracts withdrawn, with Florida and Texas proving particularly hostile to the firm’s stated commitment to ESG.

The net-zero coalition that Vanguard left has acknowledged that members face a challenging political and regulatory environment, but said there’s no evidence the alliance is about to “splinter.”

Each member has “to act within their own fiduciary duty, but I think most will stay,” said Kirsten Snow Spalding, vice president of the Ceres Investor Network, a founding partner of the NZAMi.

“Vanguard is acting politically,” she said. But its defection won’t prompt other members “to leave en masse.” In fact, the coalition is being approached by asset managers who are now interested in joining the group, she said.

[Tom Nolan + 2,441]

https://oilprice.com/Energy/Energy-General/The-ESG-Hype-Is-Showing-Signs-Of-Fatigue.html

The ESG Hype Is Showing Signs Of Fatigue

By Irina Slav - Dec 19, 2022, 6:00 PM CST

• The Net Zero Asset Managers alliance, set up just two years ago, brought together asset managers worth a combined $66 trillion.
• In October, banks including JP Morgan, Morgan, Stanley, and Bank of America, threatened to leave the UN-backed group of ESG-conscious financial institutions.
• Texas has also threatened to pull out its investments from large asset managers if they continued to be antagonistic to the oil and gas industry.

Join Our Community

  Earlier this month, Vanguard, the world’s largest asset manager, quit a net-zero banking alliance saying it wanted more independence and more clarity about its ESG commitments to investors.

Then, a week later, HSBC, the UK-based, developing world-focused lender, announced it would suspend direct financing and advisory services to new oil and gas projects, bowing under the pressure of shareholders and environmental activists.

The two events seem completely unrelated, but they are signs of things to come: fractures in the ESG investment movement are appearing--and they are likely to grow bigger at a time when consumption of fossil fuels is set to hit a new high.

The Net Zero Asset Managers alliance, set up just two years ago, brought together asset managers worth a combined $66 trillion. It later joined the UN-backed Glasgow Financial Alliance for Net Zero, led by former Bank of England governor Mark Carney.

In October, banks including JP Morgan, Morgan, Stanley, and Bank of America, threatened to leave the UN-backed group of ESG-conscious financial institutions on the concern of breaking U.S. antitrust legislation if they comply with the GFANZ guidelines for making investment decisions.

It is in legislation that the biggest cracks are appearing, after Republicans regained a majority of the lower house of the U.S. parliament and began a crackdown on ESG investments and the possibility of such investments violating antitrust law.

It is these same Republicans, both in Congress, and in states, that are mounting pressure on asset managers and banks with regard to their ESG commitments. And some are pulling out their investments from the majors: Florida recently pulled out $2 billion worth of investments from BlackRock because of its ESG agenda.

Related: U.S. Oil Rig Count Slips Along With Crude Prices

Texas has also threatened to pull out its investments from large asset managers if they continued to be antagonistic to the oil and gas industry. In a rare example of vulnerability, BlackRock had to assure the Lone Star State that it is not, in fact, against oil and gas, which in turn prompted a backlash from its more ESG-minded, climate-conscious investors.

But while pressure in the United States is growing from legislators interested in the legality of some ESG commitments, the HSBC case suggests that elsewhere it is still shareholders with a taste for ESG investing who are keeping the upper hand.

That’s despite the fact that doubts are beginning to appear around the actual profitability of such investing, which was supposed to be superior to traditional investment. The evidence of these higher returns seems to lack credibility and, perhaps more importantly, the actual benefits of ESG investing for the planet also seem to be not there.

Because of this pressure, HSBC had to quickly update its policies and commit to refusing financing to those prospective oil and gas clients who plan to allocate more than 10 percent of their capital spending on project exploration, which would be most of them.

Yet this commitment seems more symbolic than actual. Per the Financial Times, most of the financing HSBC has been providing to the oil and gas industry is financing not tied to specific projects and, by implication, it is financing that the bank could continue to provide even after this latest commitment.

So, the picture that emerges is one in which ESG supporters and climate-conscious investors continue to be loud in their criticisms and calls for action, but another reality is reasserting itself: a reality in which there are more important things than climate commitments. Things like law abiding and keeping investors on rather than seeing them go.

It is a tough position for asset managers to be in. On the one hand, conservative investors such as the states of Texas and Arizona, threaten—and make good on their threats—to pull out their money if the ESG push gets too strong. On the other, there are the climate-conscious investors that make similar threats.

With GFANZ, things came to a head earlier this year, when Race to Zero, the UN initiative that was setting standards for financial institutions with a view to net-zero commitments, threatened banks to expel them from the net-zero alliance unless they restricted “the development, financing and facilitation of new fossil fuel assets.”

Since this is nothing short of outside interference in corporate decision-making, it was only to be expected that banks would balk at it. The directive was later softened, language-wise but the fact remained that banks have limits to the ESG pressure they are willing to take.

In this context, what is happening now with Vanguard and HSBC could be seen as yet more signs of those limits, especially when compliance of antitrust legislation is on the line with some legislators suspecting the existence of “climate cartels” and eager to investigate them.

Meanwhile, cracks are beginning to appear in the investor push for Big Oil to become more climate-conscious, too. While the past couple of years saw many climate-related resolutions tabled by environmentalist shareholders pass in the most climate-unfriendly industry, this year everything changed.

Climate resolutions failed repeatedly at Big Oil general meetings because a new priority emerged, trumping environmental, social, and governance: energy security. And it’s not going away for a while.

By Irina Slav Oilprice.com

More Top Reads From Oilprice.com:

• LNG Tanker Orders Soar 95% To Hit A Record High In 2022
• The Era Of Cheap Oil Has Come To An End
• Big Oil Pours Billions In The Permian Basin

[Tom Nolan + 2,441]

Dec 21, 2022

"Australians forced to submit identification to access social media ..... police will have access to those accounts"

One Minute News Video

Australian Passport To Access The Internet

https://www.youtube.com/watch?v=WIRailT8OsY

 

[Tom Nolan + 2,441]

https://www.zerohedge.com/economics/eu-plans-impose-direct-carbon-taxes-individuals

http://endoftheamericandream.com/the-eu-plans-to-impose-direct-carbon-taxes-on-individuals/

The EU Plans To Impose Direct Carbon Taxes On Individuals

December 19, 2022

 

he EU Plans To Impose Direct Carbon Taxes On Individuals

by Tyler Durden

Friday, Dec 23, 2022 - 09:25 AM

Authored by Michael Snyder via The End of The American Dream blog,

Would you like to pay a carbon tax every time that you turn your heater on?  What about every time that you fill up your vehicle with gasoline?  Incredibly, this will soon be what life is like in Europe.  When I first heard that the EU plans to impose direct carbon taxes on individuals, I thought that it must be just another false Internet rumor.  But it isn’t a false rumor.  News sources in Europe are reporting on it, and you can find information about this plan on the official website of the European Parliament.  I don’t know why the corporate media in the United States is not talking about this, because this is an enormous story.

As I write this article, I am still in shock.  This is actually happening, and if this plan is successfully implemented in Europe it will be just a matter of time before a similar plan is pushed through in the United States.  The following comes from a Dutch article that has been translated into English…

Last night, after long negotiations, the bullet went through the church: residents of the European Union must pay for the greenhouse gases they emit. This means that every time you refuel and if the heating is switched on, you have to pay because of the harmful substances that are released as a result.

Of course they are starting small in an attempt to minimize opposition.

Once this plan goes into effect, the cost of a liter of gasoline will only go up by about 10 cents…

The new scheme will entail higher prices at the pump: up to 10.5 cents for a litre of petrol and 12 cents for diesel, according to a study by the Potsdam Institute for Climate Research.

But as we have seen so many other times, once people become accustomed to new taxes rates tend to go up significantly.

According to one prominent member of the European Parliament, the new direct carbon taxes on individuals are part of “the largest climate legislation package in the EU ever”…

“I am pleased that a balanced agreement has been reached on the largest climate legislation package in the EU ever,” says Esther de Lange (CDA) MEP. She was one of the negotiators and responsible for the coordination of the Green Deal and chief negotiator on the Social Climate Fund.

We are being told that there is broad support for this climate legislation package across the political spectrum.

Europe is scheduled to reduce carbon emissions dramatically by the year 2030, and this new legislation will be a central pillar of that effort…

The measures are part of a package of climate laws. Before 2030, CO2 emissions must be reduced by 55 percent. European industry, which already partly has to do this, will have to deal with higher emission costs, and companies from outside Europe will pay for their emissions at the border. The money raised with this can be spent on climate plans.

If you do not like this new legislation, now is the time to make your voice heard.

Personally, I pledge to make efforts to increase my carbon emissions in protest to this plan.

In fact, I am thinking about firing up my wood stove even now.

The good news, if you want to call it that, is that the new carbon taxes are not scheduled to be implemented until 2027.

So there is still time for the EU to reverse course.

Unfortunately, other draconian measures that are designed to reduce carbon emissions are going full speed ahead right now.

For example, countless farms are currently being permanently shut down all over Europe.

In the Netherlands alone, thousands of farmers are facing forced buyouts whether they like it or not…

The government in the Netherlands is planning to conduct forced buyouts of 3,000 Dutch farms with the intention of closing them down to cut nitrogen emissions in half to meet the country’s climate goals. As many as 11,200 farms will have to close, and another 17,600 farmers will have to significantly downsize their livestock operations to meet these draconian targets.

The plan could not come at a worse time because grocery prices are skyrocketing, and world leaders are warning about an oncoming food crisis caused by supply disruptions caused by the war in Ukraine and rising input costs resulting from the energy crisis.

This is literally insane.

For years, I have been warning that a global food crisis would be coming, and now it is here.

2022 was the worst year for global hunger in decades, and now the head of the International Committee of the Red Cross is warning that we will see “an enormous level of suffering” in 2023…

The head of the International Committee of the Red Cross warned Wednesday “an enormous level of suffering” awaits the world in 2023 with famine spreading.

Mirjana Spoljaric, who took over at the ICRC in October, told a Geneva press conference: “We expect an enormous level of suffering.

“As the world is trending at the moment we don’t see any easing of the humanitarian pressures, they will be immense potentially,” she said.

“There is a possibility that we will see very high levels of hunger in many parts of the world and insecurity in general.”

Shutting down farms and paying farmers not to grow food in such an environment is absolutely crazy.

But our politicians are doing it anyway.

The global food crisis is going to get substantially worse in 2023, and our leaders seem intent on imposing measures that will greatly accelerate that process.