The end of ESG investing as we know it as investors rush for the exit
After having a golden decade where the money rolled in and few questions were asked, ESG is now facing a perfect storm.
In recent months the general trend across investment markets is a swing away from shares and towards the safety of bonds and cash, but ESG has often been impervious to broader market cycles. Not any more.
Politically, ESG is getting hit hard from all sides.
On the right of politics, US Republican states have led a strong campaign against ESG as it currently operates. Florida in particular has created a new legislative framework which limits government and corporate activism in ESG investing.
Florida governor and Republican presidential hopeful Ron DeSantis is now demanding that all investing done on behalf of the state’s taxpayers is prudent and “does not include the furtherance of ideological interests”. This US law will, by definition, reduce the amount of money flowing into ESG investments.
On the other side of Atlantic, European Union leaders – politically miles away from US Republicans – are pressing for more accurate and transparent ESG regulations.
In effect, both sides of politics are trying to achieve the same thing, a more honest and effective version of ESG than we have just now. But the political heat represents a pincer movement against ESG at a time when investors are returning to conservative investments with rising rates and the threat of a global recession.
As Alex Dunnin at Rainmaker sayss: “The serious players who want to last the distance are toughening up. It’s not just about a few cliched divestments here and there. This should see a bit of a shake-out down the track.”
Bandwagon’s bust
The outstanding problem for ESG is the hijacking of the entire sector by those who simply jump on the bandwagon to get both the money in the door and the scores on the board.
Examples are too numerous to mention, but it’s hard to beat this year’s ESG ratings from the highly regarded S&P Global group which hit the headlines for all the wrong reason in assessing the electric car maker Tesla.
Guess what? The Chevron oil company ranked higher than Tesla when it came to the E (environment) score.
But that was not the top prize for double standards. In the G (governance) category, cigarette maker Philip Morris came out on top of Tesla for disclosure.
In everyday business big companies manage ESG just like any other issue. An oil company can improve its ratings by offloading dirtier assets to private companies who don’t even try to score on the ESG spectrum.
It this sort of box-ticking that has even the most earnest ESG investors worried.
Separately, investors who may have been assured in the past by seeing the biggest names in finance staunchly defend both the aspirations of ESG investing and the need to follow its core themes are now changing the script.
The world’s most famous ESG advocate has been Larry Fink, head of the world’s biggest investment house Blackrock.
In recent weeks Fink has banned the term ESG. His explanation is that the term has been corrupted by politicians on the Left and Right. This is what Fink said: “I’m not going to use the word ESG any longer because it’s been misused by the far Left and the far Right. Instead we will talk about decarbonisation or we will talk about government or social issues.” But the end result is that Blackrock no longer supports ESG as we know it.
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Anglers, Whales Will Be Burdened by Onerous NOAA Rules
When the Biden administration isn’t attacking hunting, it’s setting its sights on recreational fishing and boating.
I’ve extensively written about the Commerce Department’s proposed Atlantic Ocean 11.5 mile-per-hour (MPH) vessel speed rule for upwards of seven months of the year. Supporters claim it’ll “protect” the endangered North Atlantic right whale. But both whales and anglers - commercial and recreational - will suffer from misguided policy making here.
A similar National Oceanic and Atmospheric Administration’s (NOAA) Fisheries rule, filed in May 2021 with even more onerous stipulations, has been proposed in the Gulf of Mexico to protect yet another endangered whale: the newly-identified Rice’s whale with just about 50 known individuals.
NOAA Fisheries recently solicited comments for its proposed “Endangered and Threatened Species; Petition To Establish a Vessel Speed Restriction and Other Vessel-Related Measures To Protect Rice's Whales.” The comment period ended July 6th, 2023.
Who is behind the petition that spurred this rule? Radical preservationist environmental groups - Earthjustice, Natural Resources Defense Council, Center for Biological Diversity, and Defenders of Wildlife -proposed the draft rule to establish a year-around 11 mph slow-down zone stretching from “Pensacola, Fla. to south of Tampa.” These groups, mind you, frequently attack and sue to block lawful hunting on public lands.
The petition also deliberately conflates commercial vessels with recreational ones and would impose unenforceable conditions on recreationists. The rule, if adopted, will bar recreational vessels from hosting overnight offshore trips, mandate observers on all trips in the proposed speed zone, and embolden radical environmentalists to report on “non-compliant” recreational vessels, for instance.
Boating United, a group of leading fishing and boating organizations, lambasted the Biden administration for not consulting them. They also contend there’s no recorded incident involving a recreational vessel hitting a Rice’s whale.
“The recreational boating and fishing community is committed to marine wildlife protection and ensuring our cherished waters are safe for wildlife, including the Rice’s whale, and boaters alike. A blanket approach such as vessel speed restrictions covering large swaths of the Gulf will do little to address the protection of the Rice’s whale population and puts recreational boaters, anglers, and communities that rely on economic activity from these industries at risk,” said Frank Hugelmeyer, president of the National Marine Manufacturers Association.
“Once again, proponents of vessel speed restrictions are acting as if small recreational boats are the same as large cargo ships. They are not,” added Jeff Angers, president of the Center for Sportfishing Policy. “We invite NOAA to join with us in identifying 21st Century technological advances that can help tell mariners where whales are instead of effectively barring public access to America’s marine waters.”
“It's impossible for NOAA Fisheries to expect to be able to handle the volume of calls they would receive,“ Captain Dylan Hubbard, co-owner of Hubbard’s Marina in Madeira Beach, Florida, told me on the District of Conservation podcast.
Hubbard also joined Jesse Watters Primetime this week to discuss how the rule would adversely impact the $200 billion Gulf Coast recreational fishery.
He told Fox News, "A lot of people access the fishery — our economy, the whole southeast region is driven by recreational boating — and it's a $214 billion industry, and this has a huge impact proposed, and basically closing an area from 100 to 400 meters deep, or about 300 to 1,300 ft."
Last year, NOAA Fisheries received $82 million from the so-called “Inflation Reduction Act” and Fiscal Year 2023 appropriations funds to expand whale monitoring programs.
"We have high hopes for improving technology, but right this moment we don't have existing technology that can track and monitor and detect and avoid vessel strikes sufficient to prevent the fatalities,” NOAA Assistant Administrator Janet Coit told E&E News.
A bipartisan group of Congressional lawmakers, in turn, drafted a bill to delay funding here until the agency modernizes its north Atlantic right whale monitoring system. Lead sponsors include Rep. Buddy Carter (R-GA) and Rep. Mary Peltola (D-AK).
“Like most of my colleagues, I am concerned about the long-term health of our marine mammal populations, including the North Atlantic Right Whale. This rule, however, has too many potential unintended consequences for small boat operators who need flexibility to maintain their safety at sea. Alaskans know that the ocean is unpredictable; limiting a vessel’s speed can have catastrophic consequences for human life and new regulations should not create additional hazards for our nation’s mariners,” Rep. Peltola said.
Per NOAA Fisheries own Marine Recreational Information Program trip data and vessel registration data, the likelihood of a recreational vessel striking an endangered whale is “less than one in a million.”
If both the Atlantic Ocean and Gulf of Mexico were subjected to these obtuse vessel speed rules, anglers and boaters- key drivers of conservation funding administered by the Dingell-Johnson Amendment - will be displaced from waters.
Basing rulemaking on emotion over science is detrimental to true conservation and has no benefit to marine mammals either.
This wholly unscientific petition must be rejected. Anglers and boaters aren’t the whales’ enemies; preservationist environmentalists and overregulation are.
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Electric Cars Are a Scam
Almost useless in a Northern winter
The left likes to treat skeptics of electrical cars as if they were Luddites. Truth is, making an existing product less efficient but more expensive doesn't really meet the definition of innovation.
Even the purported amenities and technological advances EV makers like to brag about in their ads have been a regular feature of gas-powered vehicles going back generations. At best, EVs, if they fulfill their promise, are a lateral technology.
This is why there is no real "emerging market" for EVs in the United States as much as there's an industrial policy in place that props up EVs with government purchases, propaganda, state subsidies, cronyism, taxpayer-backed loans, and edicts. The green "revolution" is an elite-driven, top-down technocratic project.
And it's increasingly clear that the only reason giant rent-seeking carmakers are so heavily invested in EV development is that the government is promising to limit the production of gas-powered cars artificially.
In August 2021, President Joe Biden signed an executive order to set a target for half of all new vehicles sold in 2030 to be zero-emission. California claims to ban combustion engines in all new cars in about ten years. So, carmakers adopt business models to deal with these distorted incentives and contrived theoretical markets of the future.
In today's real-world economy, Ford projects it will lose $3 billion on electric vehicles in 2023, bringing its EV losses to $5.1 billion over two years. In 2021, Ford reportedly lost $34,000 on every EV it made. This year, it was losing more than $58,000 on every EV. In a normal world, Ford would be dramatically scaling back EV production, not expanding it. Remember that next time; we need to bail out Detroit.
Then again, we're already bailing them out, I suppose. Last week, the U.S. Energy Department lent Ford -- again, a company that loses tens of thousands of dollars on every EV it sells -- another $9.2 billion in taxpayer dollars for a South Korean battery project. One imagines no sane bank would do it. The cost of EV batteries has gone up, not down, over the past few years.
Ford says these upfront losses are part of a "start-up mentality." We're still pretending EVs are a new idea rather than an inferior one. But scaremongering about climate and a misplaced romanticizing of "manufacturing" jobs have softened up the public for this kind of waste.
In the real world, there is Lordstown. In 2019, after General Motors -- which also loses money on every EV sold -- shut down a plant in Lordstown, Ohio, then-President Donald Trump made a big deal of publicly pressuring the auto giant to rectify the situation. CEO Mary Barra lent Lordstown Motors, a new EV outfit, $40 million to retrofit the plant. Ohio also gave GM another $60 million.
You may remember the widespread glowing coverage of Lordstown. After Biden signed his "Buy American" executive order, promising to replace the entire U.S. federal fleet with EVs, Lordstown's stock shot up.
By the start of this year, Lordstown had manufactured 31 vehicles in total. Six had been sold to actual consumers. (Most of them would be recalled.) The stock was trading at barely a dollar. Tech-funding giant Foxconn was pulling its $170 million. And this week, the company filed for bankruptcy.
Without massive state help, EVs are a niche market for rich virtue signalers. And, come to think of it, that's sort of what they are now, even with the help. A recent University of California at Berkeley study found that 90% of tax credits for EVs go to people in the top income strata. Most EVs are bought by high earners who like the look and feel of a Tesla. And that's fine. I don't want to stop anyone from owning the car they prefer. I just don't want to help pay for it.
Really, why would a middle-class family shun a perfectly good gas-powered car that can be fueled (most of the time) cheaply and driven virtually any distance, in any environment, and any time of the year? We don't need lithium. We have the most efficient, affordable, portable, and useful form of energy. We have centuries' worth of it waiting in the ground.
Climate alarmists might believe EVs are necessary to save the planet. That's fine. Using their standard, however, a bike is an innovation. Because even on their terms, the usefulness of EVs is highly debatable. Most of the energy that powers them is derived from fossil fuels. The manufacturing of an EV has a negligible positive benefit for the environment, if any.
And the fact is that if EVs were more efficient and saved us money, as enviros and politicians claim, consumers wouldn't have to be compelled into using them, and companies wouldn't have to be bribed into producing them.
https://townhall.com/columnists/davidharsanyi/2023/07/14/electric-cars-are-a-scam-n2625710
************************************************************More Claptrap From the Climate Czar
John Kerry is the gift who keeps on giving, and he gave generously this week.
Did you know, by the way, that he served in Vietnam? That he, ahem, earned as many Purple Hearts as Audie Murphy? That he once spent Christmas in Cambodia? It’s true, honest. He has the hat to prove it.
All kidding aside, we here in our humble shop owe His Haughtiness a debt of gratitude. He’s the gift who keeps on giving, the Botox beta-tester who lets us love our crow’s feet, the French-looking climate czar who on an otherwise slow news day gives us something to write about.
And so it was this week, when all the world’s attention was focused on Hunter Biden’s bag of blow, John Kerry was preparing to meet with representatives of Chinese President Xi “Don’t Call Me Dictator” Jinping, there to discuss a climate deal.
The Washington Free Beacon sets the stage: Back in 2014, under a newly installed Xi, “China unveiled a plan — to much fanfare from the American press — to cap its annual coal consumption at 4.2 billion tons by 2020. China’s commitment to lower emissions, former president Barack Obama said at the time, ‘shows what’s possible when we work together on an urgent global challenge.’ Today, the Chinese have blown past that number and burn more coal than the rest of the world combined.”
What a useful idiot, that Barack Obama. After all, when it comes to hammering out an emissions agreement with the lying, thieving, live-organ-harvesting ChiComs, what’s not to trust?
As it turns out, nothing’s not to trust — at least not for a diplomat as sharp and seasoned and set on selling us down the river as John Kerry is. As the Free Beacon continues: “Kerry has nonetheless argued that, in the case of the Chinese, words alone are proof of climate ‘progress.’ He has lauded the genocidal dictator for using the term ‘climate crisis’ and for pledging to cut emissions as part of an ‘ecological strategy.’”
Xi must be thanking his lucky yellow stars for the good fortune of being able to negotiate with a pantywaist like Kerry instead of men like former President Donald Trump and his secretary of state, Mike Pompeo.
Trump seemed to embrace the advice of the intrepid Hong Konger who once warned him of the sphincter-like qualities of the Red Chinese.
As for Pompeo, he could’ve advised Kerry on China with a single word: reciprocity. “If the Chinese can buy land near our military facilities,” he said back in January, “we should be able to buy land near their military facilities. … If they can use propaganda on the telephones of our children, we should be able to put our propaganda on the phones of their children. … The theory of the case is, we’ve let them have one set of rules, and we’ve bent the knee and kowtowed to them and had an entirely different set of rules, and that can’t continue.”
On the other hand, Kerry has a history of dastardly diplomacy. As our Nate Jackson wrote back in 2018, shortly after Kerry had been caught undermining our nation’s foreign policy by conducting secret meetings with the Iranians: “One thing that displays this haughty self-importance is his habit of taking on foreign-policy negotiations without the authority to do so. From his treasonous negotiations with the North Vietnamese in 1971 while still an officer in the U.S. Navy to private negotiations with the Palestinians last January, Kerry thinks his foreign policy trumps America’s.”
Kerry insisted this week that such “shadow diplomacy” is just fine, “depending on what it does.”
How can we trust this guy to negotiate a nuke deal with the mad mullahs? Clearly, with Joe Biden as president, we’re getting the foreign policy we deserve. And we’re getting it good and hard.
But wait. There’s more. Yesterday, Kerry appeared before the House Foreign Affairs Subcommittee on Oversight and Accountability. At one point, Kerry spouted off indignantly in defense of his means of travel: “I just don’t agree with your facts, which began with the presentation of one of the most outrageously persistent lies that I hear, which is this private jet. We don’t own a private jet. I don’t own a private jet. I personally have never owned a private jet. And obviously it’s pretty stupid to talk about coming in a private jet from the State Department up here. I just honestly— if that’s where you want to go, go.”
Florida Republican Michael Waltz, himself a former Green Beret, had heard about enough, and his grilling of Kerry is good stuff:
As Power Line’s Scott Johnson quipped: “My vocabulary of opprobrium is insufficient to do justice to Biden administration climate czar John Kerry. There is no leftist bromide he can’t spout with suffocating self-regard.”
True that. Or, as the girls back in Saigon used to say, He so haughty.
https://patriotpost.us/articles/98851-more-claptrap-from-the-climate-czar-2023-07-14 ?
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My other blogs. Main ones below
http://dissectleft.blogspot.com (DISSECTING LEFTISM )
http://edwatch.blogspot.com (EDUCATION WATCH)
http://pcwatch.blogspot.com (POLITICAL CORRECTNESS WATCH)
http://australian-politics.blogspot.com (AUSTRALIAN POLITICS)
http://snorphty.blogspot.com/ (TONGUE-TIED)
http://jonjayray.com/blogall.html More blogs
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Jim Hansen and his twin
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