What The Economist Has to Say About ESG
August 1, 2022
Article by Jeffrey Price
This author often turns to The Economist as a source to cite when advocating a particular position. The much-over-used acronym, ESG, became the focus of one of its recent cover stories (https://www.economist.com/leaders/2022/07/21/esg-should-be-boiled-down-to-one-simple-measure-emissions). We read so often about “ESG this and ESG that” in the releases from publicly-traded energy companies, and The Economist points out that a lot of these factors ought to be severely de-emphasized. We agree. We do not take the exact opposite point of view, but we simply view matters of Social or Governance as secondary to the measurement of performance of a private enterprise. Let us repeat, they are relevant, but they are far from primary in importance.
Unfortunately, ESG has become too big of a factor in the guiding principles of some publicly-traded energy companies (Shell?) and consequently, this once-renowned oil company has latched on to looney ideas as to where it is going to re-deploy its gargantuan base of equity capital. Stated in a different way, this company no longer has a defensible business model.
Somewhat similar criticisms can be leveled at other publicly-traded energy companies, while those that are funded by more opaque private equity have stayed with a more narrow focus on a core principle of profit-making.
But! The Economist editorial points out that the “E” in ESG ought to stand for emissions, and the opinion writers strongly support the notion of many inducements to bring about a decrease in worldwide emissions of CO2 and other harmful gasses. That stance does not make The Economist editorial board as anti-oil, but simply means that the externalities (i.e., costs not borne by the corporation) associated with consumption of oil should be assessed back against those who chose to consume it.
We at First Keystone wholeheartedly support responsible use of hydrocarbons and we contribute to the objective by offering to lease Class A industrial facilities.
The opinions expressed above reflect only those of the author and do not represent those of the First Keystone Pecos Industrial Park organization. First Keystone welcomes responsible fact-based discourses on these topics.