Investing

Countdown to Biden summit, Siemens' hydrogen plan, and ranking ESG

By David Callaway, Callaway Climate Insights

Natural resources climate stocks holding up: Gold may be losing out to bitcoin as a store of value in some circles, but when it comes to climate stocks, natural resource plays are holding their own. So far this week, the CCI Natural Resources Index is up 0.94 points, or 0.8%, to 116.79. Among standout moves, Vale (VALE) and Albemarle (ALB) both rose almost 4%, while Westwater Resources (WWR) fell more than 7%.

History may judge U.S. climate czar John Kerry’s visit to China today and tomorrow as far more important than drumming up support for President Biden’s climate summit next week. After all, Kerry was Secretary of State at one time, and climate is likely the easiest of several tense topics between the two superpowers he could address.

If he can’t make headway there, the outlook is bleak for issues like human rights, Taiwan, and the South China Sea.

Based on preliminary reports from India, where Kerry visited in the past few days, there isn’t a lot to expect. Talks have also struggled with Brazil, another major polluter, though there has been some progress reported elsewhere, with Japan and Canada prepared to make new climate pledges next week.

On Wall Street, both Citi (C) and JPMorgan Chase (JPM) fired the opening salvos Thursday for a busy week of corporate climate pledges and scientific warnings, committing a combined $3.5 trillion to climate finance initiatives over the next decade. Love to see how that compares to the last decade.

Still, the main event at the summit on Earth Day, April 22, will be the U.S. climate pledge itself. Reports Biden will commit to a 50% reduction in emissions by 2030 are increasing, as are doubts in Washington that it is possible within the proposed framework. An executive order tied to corporate disclosures also is likely.

With money flowing freely and stocks hitting record highs, it’s easy to think big about fighting global warming. But without international cooperation, the wave of investment could be wasted. Kerry is increasingly looking like the Willie Loman of climate change. A big win ahead of next Thursday is a long shot, but stranger things have happened.

More insights below. . . .

What Wall Street really thinks of ESG ratings

. . . . Despite a massive surge in environmental, social and governance investing in the past year, most U.S. investors don’t really weigh ESG factors as the most important in their buying decisions. In fact, barely even in the top 10, reports Mark Hulbert. In Germany, however, ESG is second only to market cap in driving investment decisions, way up from just a few years ago. In this new analysis of the investor psychology behind ESG investing and the uneven performance calculations behind many ESG funds, Hulbert lays out where this will take the asset management industry in the next few years as ESG considerations rise. . . .

Read the full column

Siemens spinoffs join forces to harness offshore wind for green hydrogen

. . . . Two of Siemens’s most important spinoffs, Siemens Energy and Siemens Gamesa, have teamed up to produce green hydrogen using offshore wind turbines in one of the largest projects yet as Europe races toward renewable energy as its primary replacement for fossil fuels. Darrell Delamaide speaks with Siemens Energy’s Alexander Habeder about how the project will come together and analyzes the competitive wind power environment in Europe to assess their chances. . . .

Read the full story

Thursday’s insights: Proxy season battles, scientists become bankers

. . . . With corporate climate pledges flying ahead of Earth Day and the Biden summit next week, it’s easy to overlook the battle shareholders are still fighting during proxy season to get climate resolutions heard. But several companies are still pushing their shareholders to reject resolutions, leaving difficult decisions for the asset managers, who have also pledged to be more climate friendly. Read more here. . . .

. . . . First it was rocket scientists. Then came the Long-Term Capital Management scandal. Now it’s climate scientists getting recruited on Wall Street, ostensibly to varnish the global warming credentials of the largest banks and asset managers. The question is whether anyone will listen to them once they’re corporate insiders. Read more here. . . .

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