The ESG Push to Gamble Pension Funds on Climate Concerns
by Ron Clutz
Instead of joining the financial revolution geared toward environmental, social, and governance (ESG) that many experts believe is coming down the pike (with or without the cooperation of the United States) the Trump administration has actively fought against this likely inevitability. A new proposed regulation from the United States Department of Labor would explicitly bar the department from taking ESG into consideration in decision making concerning U.S. employer-provided pension funds. Ostensibly, this move is because the government doesn’t believe that the nation’s pension fund managers are doing a good job, but many critics see this as a blatant attempt to redirect investment dollars towards fossil fuels, which are increasingly falling out of favor with investors.
[Note: The author’s bias shows, favoring subsidized wind and solar enterprises over oil and gas companies that provide reliable energy powering modern civilization, reliable returns and tax revenues.]
This week Bloomberg Green reported that in this new proposed ruling, “the language reaffirms the standard interpretation of fiduciary guidelines that only financial risks and returns can be considered in the management of U.S. employer-provided pension funds; ‘non-pecuniary goals,’ for example relating to political or public policy, should not guide pension investments.” As Bloomberg Green points out in the report, “The timing is ironic, coming as the fossil fuel industry begins to confront existential questions about its near-term future. It would almost be amusing if it wasn’t for the fear, uncertainty, and doubt the proposal leaves in its wake.”
For Balance, Consider How Risky are Wind and Solar Investments
Paul Driessen writes at CFACT Reporting renewable energy risks. Excerpts in italics with my bolds.
The whole thrust of the ESG campaign is to burden oil, gas and coal companies with additional reporting and scrutiny regarding hypothetical global warming impacts and to downgrade their worth in investors’ eyes. Driessen correctly points to the risk of renewable energy projects collapsing when public support and tax dollars are withdrawn, as is already happening in some European countries.
If efficient energy companies must disclose climate-related financial risks, so should renewables.