Bad ESG Vibes Globally in 2024, nearly $600 billion was held in mutual funds and ETFs designed around shares of companies participating in the energy transition, according to a report this week from Morningstar Sustainalytics. That’s 6% more than last year. But the growth is only because many of those stocks have gained value, not because more investors are putting their money into the funds, said Hortense Bioy, Morningstar’s head of sustainable investing research.
To the contrary, investors pulled $24 billion out of these funds, reversing a rush into climate funds that peaked in 2021. High interest rates that are bad for renewable energy companies are one reason. But the main driver of the exodus, Bioy said, is bad vibes. “These aren’t bad strategies, and they haven’t underperformed,” she said. “It’s more about the anti-ESG sentiment.” One segment that remains popular, she said, is “climate transition” funds that select companies based on their long-term decarbonization targets, not their carbon footprint today — and that are often loaded with Big Tech and fossil fuel companies.
OPEC’s original mission statement was to regulate oil output to set acceptable prices for their crude oil. One weakness was the tendency of OPEC members to cheat on their allocated quotas. Saudi Arabia, being the swing producer, kept the brood in check by threatening to flood the market. In time Saudi got richer and richer and its budget got bigger and bigger to the point they could not afford to kill oil prices. Venezuela adopted a fantastic way of keeping the oil companies in line. Instead of price controls Venezuela let oil companies sell the oil at any price they wished but taxed them on state set price. Then Venezuela did something stupid (1970s), nationalizing the oil companies. PDVSA, the national oil company, succumbed to politics and became the government’s petty cash.
Then the Americans invented Fracking and now are the ones who regulate the price of oil. When prices go up the Americans work feverishly to get more oil out of the ground. When the price goes down they stop pumping. Thereby taking the control of oil out of Opec’s hands.