Nick Pope
Contributors
Reuters reported on Wednesday, citing analysis done by a firm called LSEG Lipper, that investors are fading green energy investment funds due to concerns about the sector’s ability to grow and the possibility of former President Donald Trump returning to the White House.
Funds that invest specifically in green energy companies and products around the world saw investment outflows totaling $4.8 billion in the first quarter of 2024, an amount largest in a quarter on record, according to to Reuters. Meanwhile, S&P Global Clean Energy Index fell about 10 percentage points this year while S&P 500 Energy Index – a fund that includes many oil and gas companies – is up more than 16% so far this year.
“This is something that Consumer Research has warned about from the beginning. The idea that the rush in [Environmental, Social and Corporate Governance (ESG)] and that green investing will be good for investors and shareholders is always a lie,” Will Hild, executive director of Consumer Research, told the Daily Caller News Foundation. “Now, with higher interest rates and a radically different energy model, the folly of this nonsense is becoming clear.” (RELATED: Citigroup reports majority of its clients are not ready to meet key climate goals)
Many major financial institutions in the United States have embraced ESG investing in recent years, describing it as a practice that allows investors to profit while helping to make positive social changes . Opponents such as Hild have countered that the strategy violates the fiduciary duties that institutions owe to their investors by introducing politicized considerations into the decision-making process. Financial regulations should have been completely apolitical.
Now some of the world’s top asset managers, such as BlackRock and State Street, are under administration. investigation by the House Judiciary Committee on their ESG practices, while the asset management arm of State Street and JP Morgan have withdraw money from Climate Action 100+, a coalition pushing companies to cut emissions and adopt other corporate climate policies.
Globally, some of the green funds that saw the largest capital outflows in the first quarter of 2024 included Handelsbanken Hallbar Energi, a Swedish fund that lost $458 million in investments, and iShares Global Clean Energy ETF, which lost 335 million USD, according to Reuters. . Meanwhile, Ninety One Global Environmental Fund lost $226 million in investments in the first quarter.
The apparent decline in investor confidence and interest in green energy funds appears to be occurring despite the Biden administration’s push for development. big climate agenda and similar costly initiatives undertaken by European countries such as Germany. Governments such as the US and Germany have spent huge sums of money to subsidize technologies such as wind and solar power generation, but green energy has not yet been able to replace the fossil fuels that are the lifeblood of these countries. developed economies in the world.
If investor interest in green energy funds and products continues to decline, it is unlikely that international climate targets will be set or reaffirmed at the United Nations by 2023. climate summit in Dubai will be met, according to Reuters.
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