X

Sign Up To Our Free Newsletter

Join Now

Thanks for subscribing to our free newsletter!

ERROR

  • 3 minutes Texas forced to have rolling brown outs. Not from downed power line , but because the wind energy turbines are frozen.
  • 7 minutes Scientists Warn That Filling The Sahara With Solar Panels Is A Bad Idea
  • 11 minutes United States LNG Exports Reach Third Place
  • 15 minutes Joe Biden's Presidency
  • 16 hours Texas Supply Chain Massacre
  • 17 mins U.S. Presidential Elections Status - Electoral Votes
  • 6 hours America Makes Plans to Produce Needed Rare Earth Minerals Domestically
  • 8 hours Texas forced to have rolling black outs, primarily because of large declines in output from fossil fuel power plants
  • 12 hours Former BP Exec "Biden not in war against oil" . . Really ?
  • 2 mins Here we go - again: plug-in hybrids cost motorists more than what they were told
  • 2 days Good Marriage And Bad Divorce: Germany's Merkel Wants Britain and EU To Divorce On Good Terms
  • 2 days Speaker Pelosi, "Tear Down This Wall" . . around Capital Building
  • 3 hours An exciting development in EV Aviation: Volocopter

Will Trump's New Investment Proposal Help The Oil & Gas Industry?

The U.S. Department of Labor – which has recently proposed a rule that would limit retirement funds’ investments based on environmental, social, and governance (ESG) criteria – is unlikely to incentivize more funds to invest in oil and gas companies, Bloomberg Green Columnist Kate Mackenzie says.  

At the end of last month, the U.S. Department of Labor proposed a new rule, which explicitly says that retirement plan fiduciaries must select investments and investment courses of action “based solely on financial considerations relevant to the risk-adjusted economic value of a particular investment or investment course of action.”  

“The Department is concerned, however, that the growing emphasis on ESG investing may be prompting ERISA plan fiduciaries to make investment decisions for purposes distinct from providing benefits to participants and beneficiaries and defraying reasonable expenses of administering the plan,” it said in the proposed rule.

According to Bloomberg’s Mackenzie, it looks like the Department of Labor sees ESG investment strategies as underperforming the market, while in reality, they have outperformed them in recent years, studies have shown.

“Generating more hurdles to the incorporation of ESG criteria will have a chilling effect, leading to plan participants losing access to ESG options---many of which have outperformed their indices over time and especially during the market shock related to COVID 19,” Lisa Woll, CEO of US SIF: The Forum for Sustainable and Responsible Investment, said, commenting on the proposed rule.

Related: 10 Energy Stocks Defying The COVID-19 Slump

A US SIF 2018 survey of sustainable investment firms in the United States showed that three-quarters of 141 money managers of total assets of over $4 trillion said that their motivation for incorporating ESG criteria into their investment process was the desire to improve returns and to minimize risk over time, Woll said.  

According to the Environmental Defense Fund, the proposed rule ignores the ESG investment strategy as a core driver of financial performance.

“Retirement planning depends on long-term thinking and an appreciation for systemic risks. As we confront the effects of climate change and COVID-19, we need policies that recognize the present and future impact of ESG factors on financial performance,” the fund said.  

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage



Leave a comment

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News