“There is really no historical precedent for the magnitude of the shift in investor focus that we’ve witnessed over the last decade toward the analysis and use of climate and other #ESG risks and impacts in investment decision-making.”
Playing the Long Game: The Intersection of Climate Change Risk and Financial Regulation – Nov. 5, 2020-Alison Herren Lee-Acting Head of SEC
Consider the following:
- The #EnergyTransition is not possible unless the gas and oil sector has continued access to external sources of capital to sustain production to meet expected demand.
- Yet, organizations such as #BankTrack, #RainforestActionNetwork, the #SierraClub, #ReclaimFinance, and others call out banks that finance oil and gas projects around the world.
- Investors and equity analysts, highly influenced by these organizations, have caught the attention of bank management who responded by withdrawing bank credit from the upstream gas and oil sectors-historically, the lifeline of the industry.
- Upstream producers curtailed capital expenditures on exploration and development drilling, causing reserve/production to decline, commodity prices will rise as supply fails to meet demand, and prices will escalate.
Who benefits from this cycle? Certainly not the global economy.
Who suffers most? Certainly not those Long Gas and Oil. Yes, the most vulnerable members of society pay the price for this folly.
We must keep our eye on the ball!
#ESG principles provide a mechanism for both sides to debate and discern solutions that will benefit both industry and society.
We must stop shouting at each other and #engage.