I’ve recently become interested in the green movement’s latest attack on fossil fuel companies: ESG activism. ESG activists are successfully pressuring fossil fuel companies to comply with biased environmental reporting practices, such as “climate risk disclosures,” that are encouraging investors to underestimate the future value of fossil fuel companies.
Below are two speeches I’ve developed to address this threat. If you have any questions about these speeches or would like to invite me to speak at your organization, send a note to Abtin Forouzandeh, our VP of Product.
Understanding the ESG threat
Oil and gas companies are under increasing pressure from ESG activists to disclose climate risks, produce sustainability reports, and even shrink their investments in new fossil fuel projects. How the industry responds, argues philosopher and energy expert Alex Epstein, will depend on understanding what the ESG movement wants–and how likely it is to succeed.
As an offshoot of the largely ineffectual “keep it in the ground” movement, the ESG movement has cleverly targeted finance and enlisted the support of highly influential asset managers, proxy advisors, and pensions funds to further its anti-fossil fuel agenda. These influencers, Epstein says, have very little incentive to promote the success of oil and gas companies–but very large incentives to position themselves as “green.” If the industry is going to successfully address the threat posed by the ESG movement, it urgently needs to understand the movement’s history, goals, and tactics–and how to counter them.
Taking the high ground on disclosure
Oil and gas companies have responded to demands they disclose their exposure to climate risks in one of two ways: to fight them off or acquiesce. Neither approach, argues philosopher and energy expert Alex Epstein, gives investors an accurate picture of the future prospects of oil and gas companies.
The right approach, Epstein says, is for companies to proactively provide investors with all of the relevant information they need about their business–negative and positive. For example, companies should not only address their potential negative environmental and climate impacts. They should also highlight the environmental and climate benefits of the affordable, abundant, reliable energy they produce–and explain how these benefits are likely to moderate radical restrictions on fossil fuels. In this speech, Epstein explains the power of full-context disclosure to inform investors and disarm activist attackers.