An oil pumping is seen in a field on April 8, 2025 in Nolan, Texas.
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Like many mission -based fund managers have reconsidered their defense policy following the large -scale invasion of Ukraine of Russia, an analyst ate Goldman Sachs He says that now is the time for sustainable investors to evaluate their approach to oil and gas companies.
It arrives at a time when European energy specialties have reduced renewable spending and doubled in fossil fuels in an effort to increase short -term shareholders.
Investments focused on environmental, social and government factors (ESG) tend to favor companies that obtain a highly criteria score, such as climate change, human rights or corporate transparency.
Tobacco giants, fossil fuel companies and arms manufacturers generally have their legs among those who have projected or excluded legs from sustainable portfolios.
“In the same way that the feeling of defense companies has changed with the Russian-Ukraine war, I think that the feeling of ownership of oil and gas should change,” Michele Della Vigna, head of EMEA Natural Research Videar.
A persistent lack of will to possess energy specialties is biased by an “important error” when evaluating the transition of energy from the perspective of European investors, said Della Vigna, an approach that expects to change.
We see record temperatures of rupture, the increase in greenhouse gas emissions, ocean heating and sea level increase. I mean, why would we want to see more fossil fuels? The majority of ESG investors would not.
Ida Kassa Johannesen
Chief of Esg Commercial at Saxo Bank
Della Vigna de Goldman described three reasons to support his opinion about why ESG investors should bring oil and cold gas actions.
“Let’s be clear, this energy transition will be much longer than expected. We will have, we believe, the maximum demand for oil in the mid -2030 [and] Peak Gas Demand in the 2050s, “said Della Vigna.
“And we clearly show that we need the development of oil and gas from Greenfield until 2040. Then, if we need a new development of oil and gas, why would we own these companies?”
Meanwhile, the International Energy Agency has said that the demand for fossil fuels will reach its maximum point for the end of the decade. The energy guardian dog has also repeatedly noticed that new oil and gas projects are not needed to meet world energy demand while achieving zero net emissions by 2050.
The second point of Della Vignna was that oil and gas companies represent some of the largest carbon energy investors worldwide, adding that a failure to interact and finance oil and gas existences would ultimately serve as a barrier to energy transition.
In addition, Della Vigna said that, unlike public services, which he described as infrastructure builders, oil and gas companies are “market manufacturers” and “assailants.”
A variety of solar panels create electricity on the Lightleurce BP solar farm near the Angleyey village of Rhosgoch, on May 10, 2024 in Wales.
Christopher Furlong | Getty Images News | Getty images
“Therefore, we need their capacities, balance and risk rhythm. They are some of the largest carbon investors and if we like it or not, we also need its central and gas business,” said Della Vigna.
“Otherwise, we will not have affordable energy, special for emerging markets, and we have the poverty of energy, which I do not think it is acceptable in any frame of ESG,” he continued.
“I think that the energy companies that lead the energy transition should be a cornerstone or ESG funds, not a target of divestment,” said Della Vigna.
‘Some losses around the edges’
Not everyone is convinced that oil and gas stocks should follow defense companies to an ESG portfolio.
“I think it’s a bit extreme,” Kassa Johannesen, head of Commercial ESX at Saxo Bank, told CNBC.
“Just because defense actions have won the favor that it is not no, no, no, no, no, no, no, it is not that it cannot not, neither should the favor win. I do not think we should compare both directly,” said Kassa Johannesen.
“We can see the negative impacts of oil and gas. The current climatic situation is not good. We see temperatures of record rupture, the increase in greenhouse gas emissions, the warm -up of the oceans and the increase in sea level. I mean, why would we want to see more fuse.
Scientists have pressed repeatedly for rapid reductions in greenhouse gas emissions to prevent global average temperatures from increasing. These calls have continued through an alarm of temperature records, with the planet registering its hottest year in human history in 2024.
Extreme temperatures are fed by the climatic crisis, whose main conductor is the burning of fossil fuels.
All good, a senior analyst of actions that covers the oil and gas industries in Morningstar, said it is difficult to foresee a time when there will be a total acceptance of oil and gas in ESG.
He added, however, that a slightly more relaxed approach to investors is feasible about the basics that energy specialties significantly increase the amount they invest in renewable and low carbon technologies.
An Exxon service station is observed on August 5, 2024 in Austin, Texas.
Brandon Bell | Getty images
“I mean Esg, for me, it’s all the reason for being the energy transition [and] Climate change Therefore, I would be difficult to believe that they would say that they will begin investing in oil and gas companies, “Good to CNBC told CNBC.
“Now, I think that what you could begin to see is that it loosen at the edges, and that they reach an agreement in which a company is investing x quantity in renewable energy, or the profits will be x quantity in 10 years, then perhaps a Total[Energies] Enter the wallet. But someone like a Exxon or just a Chevron … it would be difficult for me to see how that becomes in Esg, “he added.