Fossil-Fuel Divestment Is Futile
— May 29, 2018
By Paul H. Tice
ESG criteria purport to promote “sustainable investing” by imposing “social responsibilities” on corporations—including the responsibility to prevent global warming—under the guise of fiduciary responsibility, risk management and financial transparency. Because the environmental question relates to what oil and gas companies do, as opposed to how they operate, there is no obvious way for them to comply, apart from getting out of the business.
That means there’s no obvious way for fund managers to comply with ESG activists’ demands other than by divesting themselves of fossil-fuel companies. The activists have succeeded in redirecting investment flows away from the coal and oil-sands industries, with crude oil the next hydrocarbon in the crosshairs.
Read the full article as published by The Wall Street Journal.
Paul Tice is an Executive in Residence at NYU Stern.