Good News Everyone! Should ESG Funds Embrace Oil and Gas Companies?

Sweet Zombie Jesus! ESG Funds Gone Mad?

Good news everyone! Professor Hubert J. Farnsworth here reporting on a development so bizarre it's like discovering MomCorp secretly runs a kitten orphanage! It seems some pointy headed analyst at Goldman Sachs is suggesting that those holier than thou ESG funds the ones that wouldn't touch fossil fuels with a ten foot pole should start cozying up to oil and gas companies. Can you believe it? As they say 'Shut up and take my money!'... but maybe not so fast.

Wubba Lubba Dub Dub! The Energy Transition is Taking Forever!

Apparently this Della Vigna fellow (no relation to that lousy Vinnie and his robot mafia I hope!) argues that the energy transition is slower than a snail riding a glacier. He claims we need oil and gas well into the future so why not invest in the companies digging it up? His reasoning is as sound as a screen door on a spaceship! The man argues and I quote 'We need greenfield oil and gas development well into the 2040s. So if we need new oil and gas development why wouldn't we own these companies?' Why not indeed? It's just like saying 'If we need more doomsday devices why not invest in Planet Express?'

To Shreds You Say? Fossil Fuels and Climate Change!

Now hold your horses! Ida Kassa Johannesen from Saxo Bank has a point she says 'We can see the negative impacts of oil and gas. The current climate situation is not good.' And she would be right. It is like trying to feed candy to Nibbler. You know you are making a mistake but there is nothing that you can do about it. But what if we can do something? Could the professor be wrong!?

Blernsball Economics! Investment in Low Carbon Energy

Della Vigna also argues that oil and gas companies are major investors in low carbon energy. It is a bit like me investing in a youthanizer it does not really mean that I will use it correctly! Apparently not investing in these companies would hinder the energy transition. According to him they are market makers and risk takers whatever that means in this century. We need their capabilities their balance sheets and their risk taking! Without them we will have energy poverty especially in emerging markets. Affordable energy or energy poverty what will it be I ask?!

Good News Everyone! The Fine Line Between Acceptance and Relaxed Approach

This brings to mind the timeless question 'What if?' What if oil and gas companies were the key to solving energy poverty? Allen Good a senior stock analyst at Morningstar believes a relaxed approach is possible if these energy giants significantly increase their investments in renewable technologies. He goes on to mention and I quote 'So I would find it hard to believe that they would say they are going to start investing in oil and gas companies. Now I think what you could start to see is some loosening around the edges whereby they come to some agreement where a company is investing X amount in renewable energy or their earnings will be X amount in 10 years then maybe a Total [Energies] gets into the portfolio. But someone like an Exxon or even a Chevron … I would find that hard to see how that gets in ESG.'

I Don't Want to Live on This Planet Anymore! The Verdict?

So what's the verdict? Should ESG funds embrace oil and gas companies? I don't know! I'm just a nutty professor with a penchant for doomsday devices. But one thing's for sure: this debate is hotter than a solar flare and it could reshape the future of sustainable investing. As I always say 'When will I learn? The answer: Never!'