The state of Oregon was criticized on Thursday over its investment in fossil fuels. The group criticizing it, Divest Oregon, which describes itself as “a statewide grassroots coalition of individuals and organizations representing unions with PERS members, racial and climate justice groups, youth leaders, and faith communities,” released an article ripping the state over alleged holdings of $5.3 billion in fossil-fuel firms. That includes–gasp!–nearly $1 billion in coal-company investments.
It's not only Oregon, of course. In February, New York state Comptroller Thomas DiNapoli said the state's retirement fund would limit investments in 21 shale-oil and gas-producing firms. Maryland lawmakers have approved a bill that makes it more difficult for its investment advisers to invest in any company that could cause climate change.
The interest in investing in the so-called environmental, social, and corporate governance (ESG) elements has grown exponentially during the past few years. As per the Deloitte Center for Financial Services, professionally managed assets that have ESG mandates increased to $46 trillion by 2021, accounting for more than 40 percent of total managed assets. As a result, it's become extremely difficult to raise funds for increasing the production of fossil fuels. Thus, even prices that exceed $100 per barrel aren't attracting capital to the industry.
In the latest episode of Bloomberg's “Odd Lot Podcast,” Goldman Sachs' top commodities strategist explained ESG investment to be “a blunt instrument that is reducing capital flows into a very critical sector.” This is what happens when cancel culture is combined with investing–it results in even greater inflation and higher gas prices. If President Joe Biden truly wants to push for an increase in oil production in the U.S., he may be inclined to encourage the ESG Left to ease off.