What if steering oil & gas away from clean energy was good for sustainability?
Here’s a challenging thought for you all. Activist investors Bluebell went after BP earlier this year arguing they should bolster investments in oil and gas and cut spending on clean energy.
Despite what it appears, I’m not sure this is really anti-sustainability!
Bluebell has had a big impact on other companies and are also currently battling it out with BlackRock over similar issues. So, what they do matters.
On the surface their argument seem like an anti-environmental position. After all, they are calling for increased investments into fossil fuels and less for transformation. But I’m not sure this is the right analysis.
I have said for many years that incumbent fossil fuel companies will not change and transition to ‘clean energy’ companies, they will simply hold on to their old ways as long as possible and then die out. I argue that everything else is a smokescreen.
This is why I wonder if Bluebell is simply pursuing a rational investment decision rather than taking a stand against sustainability. After all BP’s odds of a successful transformation are very low. So maybe Bluebell calling for them to invest in what they’re good at, and divest from what they are not, just exposes BP’s greenwashing?
The financially rational decision for an investor would be to invest in fossil fuel companies who are raking in record profits, argue for maximum dividends and then use that money to invest in the transformation elsewhere - in companies who are far more likely to succeed. So whatever Bluebells intentions, the actual practical result of their success might be to accelerate fossil fuel companies’ demise, because it would shatter the deluded belief of institutional investors that fossil companies’ transformation would ever happen.
#Investing #fossilfuel #energytransition
Published by Bloomberg | 29 January 2024