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Pull Investments From Companies Not Committed to Environment, Pope Says | Investing News

VATICAN CITY (Reuters) – Pope Francis on Saturday urged people to pull investments from companies that are not committed to protecting the environment, adding his voice to calls for the economic model that emerges from the coronavirus pandemic to be a sustainable one.

Francis spoke in a video message for an online event called “Countdown Global Launch, A Call to Action on Climate Change”.

“Science tells us, every day with more precision, that we need to act urgently … if we are to have any hope of avoiding radical and catastrophic climate change,” he said.

The pope listed three action points: better education about the environment, sustainable agriculture and access to clean water, and a transition away from fossil fuels.

“One way to encourage this change is to lead companies towards the urgent need to commit to the integral care of our common home, excluding from investments companies that do not meet (these) parameters … and rewarding those that (do),” he said.

He said the pandemic had made the need to address the climate crisis and related social problems even more pressing.

“The current economic system is unsustainable. We are faced with a moral imperative … to rethink many things,” he said, listing means of production, consumerism, waste, indifference to the poor, and harmful energy sources.

In June, a Vatican document urged Catholics to disinvest from the armaments and fossil fuel industries and to monitor companies in sectors such as mining for possible damage to the environment.

Other speakers and activists at the online event included actress Jane Fonda, Britain’s Prince William, former U.S. Vice-President Al Gore, and European Commission President Ursula von der Leyen.

(Reporting By Philip Pullella; Editing by Christina Fincher)

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business

Forget Big Oil, These 3 Stocks Are Better Energy Investments

Big oil has seen better days. Shares of giant oil companies like ExxonMobil, BP, and Shell have lost more than 50% of their value over the last decade on average. Conditions have gotten so bad in the oil patch that BP plans to pivot away from the sector toward renewable energy. Because of that, big oil doesn’t hold the investment appeal that it once did.

That’s why investors should to start looking elsewhere if they want exposure to the energy sector. Three much better alternatives these days are pipeline giant Enterprise Products Partners (NYSE: EPD), and utilities Dominion Energy (NYSE: D) and NextEra Energy (NYSE: NEE). Here’s why we think they have a much brighter future than big oil.

A hand holding a lightbulb with icons of the energy industry such as an oil pump, solar panel, and wind turbine around it.

Image source: Getty Images.

How about a big pipeline?

Reuben Gregg Brewer (Enterprise Products Partners): The biggest problem with big oil is that top- and bottom-line performance is tied to the volatile price of oil. But there’s a way to sidestep that and still take advantage of the out-of-favor nature of the energy industry: Focus on the midstream sector. Midstream companies own and operate the pipelines, storage facilities, processing plants, and transportation assets that move oil around the world. The key, however, is that most players in the space get paid fees for the use of the assets. That means demand is more important than energy prices.

One of the biggest and most diversified midstream players in North America is Enterprise Products Partners. Roughly 85% (or more) of its gross margin is fee based. While the master limited partnership was impacted by the energy downturn, it is still covering the cost of its huge 11% distribution yield by a generous 1.6 times. The partnership has pulled back on its growth plans, but with such a large yield

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business

HSBC Bank Aims For Zero Carbon On Investments By 2050

Asia-focused bank HSBC announced Friday that it aims to achieve net-zero carbon emissions across its investments by 2050, but campaigners accused it of falling short on tackling climate change.

“HSBC has both the scale and global reach to play a leading role in guiding its customers through this transition and helping them to achieve this ambitious goal,” the lender said in a statement.

Its target is to “align its financed emissions — the carbon emissions of its portfolio of customers — to the Paris Agreement goal to achieve net zero by 2050 or sooner”.

“The bank also aims to be net zero in its operations and supply chain by 2030.”

Europe’s biggest bank added that it has earmarked between $750 billion and $1.0 trillion of finance and investment to assist the transition.

CEO Noel Quinn called the 2020s a “pivotal decade of change” towards “a healthier, more resilient and more sustainable future”.

The 2015 Paris agreement saw nations commit to limiting global warming to two degrees Celsius above pre-industrial levels.

London-listed HSBC meanwhile follows in the footsteps of rival Barclays, which committed in March to zero-carbon by 2050 under pressure from its shareholders to help tackle climate change.

Campaigners complain that HSBC continues to fund fossil fuel projects including coal power Photo: AFP / GREG BAKER

Environmental campaign groups however gave a sceptical response to HSBC’s announcement on Friday, arguing that the bank should cease support for coal, gas and oil activities.

“HSBC’s net-zero commitment is a bit like saying you’ll give up smoking by 2050, but continuing to buy a pack a week, or even smoking more,” said Becky Jarvis, coordinator of campaign group network Fund Our Future UK.

“Any further financing of oil, gas, and coal expansion today is utterly at odds with a net-zero commitment by 2050.

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business

South Africa Unlikely to Force Specific Investments on Retirement Funds

(Bloomberg) — South Africa’s government is unlikely to force retirement funds to plow money into specific companies or projects, an industry body of fund managers and insurers said.

© Bloomberg
A construction worker looks out towards the Central Business District (CBD) on the city skyline from inside The Leonardo, the Legacy Group’s mixed-use property development, currently Africa’s tallest building, in the Sandton district of Johannesburg, South Africa, on Tuesday, Sept. 17, 2019. Emerging markets will again be looking to central banks to provide the next leg-up in a rally that’s making it the best September so far for stocks and currencies since 2013.

Of the economic plans under discussion to revive South Africa’s economy, none are calling for prescribed assets to be used as a solution, the Association for Savings and Investments South Africa Chief Executive Officer Leon Campher said in an emailed statement.

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The African National Congress has said previously it would investigate forcing retirement funds to help fund social development, but the idea has been strongly opposed by investors. Since then, the National Treasury has shunned proposals to instruct pension funds on where to invest. Asisa’s members have urged the government to instead provide the industry with bankable projects.

“Retirement funds would consider investing in well-structured viable infrastructure projects,” Campher said. “This should not be confused with pumping money into state-owned enterprises.”

South African Ruling Alliance Pushes For Prescribed Assets

While the government may still be considering ways to expand a regulation in the Pension Fund Act to ease barriers to infrastructure investment, this does not amount to prescription and is also not necessary, Campher said.

“Asisa is of the view that the current Regulation 28 provisions do not prevent increased investment in infrastructure,” he said.

For more articles like this, please visit us at bloomberg.com

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business

Pension Funds Around The World Moving To Abandon Investments In Fossil Fuels

KEY POINTS

The New Jersey bill mandates total divestment from coal companies within two years
New Jersey Treasury Department, which administers the pension fund, opposes the divestment bill
The oil and gas sector now only accounts for about 2.5% of the market cap of the S&P 500 index

The State of New Jersey may soon order its state pension fund to divest from fossil fuels, following a long list of other state, municipal and national pension funds that have already done so.

In a recent op-ed published in the Newark Star-Ledger newspaper, Richard J. Codey (a former governor of New Jersey) and Tom Sanzillo (director of finance at the Institute for Energy Economics and Financial Analysis) wrote that it is high time for the Garden State to pull out of fossil fuel investments — for both environmental and financial reasons.

New Jersey State Senators Bob Smith and Linda Greenstein, both Democrats, have sponsored the Fossil Fuel Divestment Bill — Senate Bill S330 — which calls for the state pension fund to withdraw from fossil fuels.

Specifically, the bill would prohibit state pension funds from investing in any of the top 200 companies “that hold the largest carbon content fossil fuel reserves.”

The bill also mandates total divestment from coal companies within two years, and withdrawal from all other fossil fuel companies by Jan. 1, 2022.

However, the New Jersey Treasury Department, which administers the pension fund, opposes the bill, suggesting, among other things, that jettisoning energy investments would lower annual returns.

But the editorial disputed that assertion.

“The proposed legislation provides the right financial solution,” Codey and Sanzillo wrote. “Oil and gas companies once led the world economy and contributed mightily to pension fund returns. Today, however, and for the last 10 years, the oil and gas sector has performed

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