121–130 of 253 posts
Divest from fossil fuels and invest the funds in clean energy. What am I missing?
Bill Gates also doesn't support the Green New Deal or government involvement (god forbid his taxes go up) in mitigating climate change. His public prayers for a technocratic solution to climate change are ridiculous and embarrassing for him considering he knows it will never happen.
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Could you talk a bit more about your company?
We're creating an S&P 500 index fund that aggressively uses shareholder engagement to get companies to reduce emissions through their supply chains.
I'd love see how you guys do it, and will be following your progress.
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We're creating an S&P 500 index fund that aggressively uses shareholder engagement to get companies to reduce emissions through their supply chains.
This seems like a great idea in theory- potentially better than the so-called luxury ETFs that only invest in what the fund manager deems as socially-responsible companies. If your expense ratios are low, and you allow me to have a meaningful say in how I or the fund as a whole votes for better climate outcomes, I would be personally interested. I'd love see how you guys do it, and will be following your progress.
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> Does this work in liquid markets though? Well, I think the idea is to try to the make the market for these stocks less liquid. And it might work, because the long run you're talking about isn't actually looking too bright due to the technological developments with renewables and electric vehicles. These stocks are not retirement stocks, unless you're retiring in a couple of years.
The point is that it takes near universal coordination to actually hurt liquidity. Otherwise, you're just funneling money to amoral investors.
Depending on how liquid a product was, this type of action can have real consequences. Eg:
* boycotting a specific type of industrial product mainly bought in Europe = big impact * Boycotting wheat = small impact, this is easily sold elsewhere * Boycotting sports term = big impact. Often only one league matters
Shared are quite liquid. Likewise, a boycott of a specific oil company would do little to thwart oil use.
Not buying oil itself actually has some impact, by shifting the demand curve.
So where does the dollar to invest in climate innovation come from if you don't take the dollar out of the fossil fuel stock? What he said was nonsensical and innumerate. Perhaps its because he has effectively infinite money? His comment don't really hold up even under basic charity. The dollar in fossil fuels is a dollar not in another industry with a better story for the environment. The rest of us have a limited p…
There are trillions of dollars invested somewhere other than in oil and gas extraction, because the investors believe they are getting a better return, or they simply don't have a signal that somewhere else has better potential. When a dollar leaves fossil fuels and the sticker price of ownership decreases, those investors receive a signal about higher potential yields.
The issue is that even Bill and Melinda and the Gates Foundation have a limited pile of cash compared to the effectively infinite money already in oil and gas exploration and extraction and the effectively infinite money haphazardly seeking returns elsewhere regardless of impacts on the planet. That is, the supply of money for those industries is too elastic at the scale of only $100B.
I think that Bill Gates is saying that given their limited pile of cash, they have the most impact creating competitors to current energy intensive industries that demand energy and competitors to fossil fuels as alternative suppliers of energy.
I don't know why the title and the leade repudiate divestiture. Maybe it is an attempt to sound clever, or maybe it is a bias toward hopelessness. I imagine some readers will simply ape the statement in cocktail party situations, which will miss the opportunity of advocating the proactive solutions Gates was talking about, and counterproductively reinforce the fatalistic idea that no one can do anything.
I'm pretty unclear on how anyone even thinks divestment works, actually. When a company sells stock in an IPO, buying stock from them allows them to raise capital, so it seems clear to me that you shouldn't buy stock from a fossil fuel company. But that's non-investment, not divestment. Divestment is about selling existing stock. It's true that divestment drives down the stock price. This could mean that if a company…
Stock buybacks shrink the size of the company. They lose money they could otherwise use to (say) drill for oil, instead returning it to shareholders' hands to deploy in other ways. That sounds like a win for divestment to me.
"Less likely/more painful to raise money" and "more likely/less painful to buy stock back" are two sides of the same coin, both meaning less money invested in the business.
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Divestment pushed South Africa to abolish apartheid.
Yeah, but countries != companies. Divesting from SA meant smaller tax base, fewer jobs and a fall from international prominence. Divesting from a company/industry means that the stock price may fall. Assuming that the actual profitability of the company remains unchanged all divesting did was make the stock a better buy.
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Gates says divestment will not lower carbon emissions. This is very different from saying it will not lower valuation. Has the reduction in tobacco companies' stock prices materially affected smoking rates? I don't think so.
I'm less sure. Juul would say that redirecting nicotine addicts to vaping over smoking has probably altered rates of uptake of smoking, and the market backs Juul and vaping which has led big tobacco to diversify and invest. Oil and Coal ventures who own the underground asset have the choice of converting from gasoline production to feedstock for plastics and pharma and fertilizer, or just leaving it in the ground for…
Cheaper stock prices just due to divestment will have pretty much zero impact on oil demand. Why should it be any other way?
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Theoretically if 51% of ownership of an oil company wants to seal all oil wells isn't that what the company should do?
certainly they could elect board members who'll hire CEOs to execute that plan.
I’m torn on that, but minority’s shareholders have a legitimate expectation their rights should be protected.