Investing in climate change, but not sustainability

Investing in climate change, but not sustainability

Apr 15, 2019
Image credit: Zbynek Burival via Unsplash
Monday, April 15, 2019

Large companies are hedging against climate change while refusing to change the business models that contribute to the phenomenon.

Fossil fuel companies, for example, are increasingly investing in renewable energy, but they often are using wind and solar to facilitate extracting oil and natural gas the New York Times reported recently.

“Technology advances, but not the system underneath,” wrote Jesse Baron, an American journalist, in the newspaper.

The Times related a story about Exxon Mobil. In 2015, company executives said they considered sustainable energy a fantasy because the world would depend on carbon-based fuels for decades. Three years later, the company was underwriting solar farms in Texas. Those farms now power fracking rigs throughout the Lone Star State, saving Exxon money so it can remain competitive while emitting greenhouse gases.

Airline companies are producing lightweight planes that can take off in air that becomes less dense as temperatures rise. Investors are pouring money into hotels in regions where catastrophes are expected to hit in order to capitalize on the need for sort-term housing. British investors are purchasing Russian farmland expecting its value to increase as droughts strike other agricultural regions.

The story raised serious ethical questions for sustainable investors, like when should one support sustainable efforts and how can investing capitalize on climate change while also fighting it. Too often, the story concluded, investors seek returns but ignore global solutions to climate change.

“What is odd about many of these climate plays, which rely on such complex assumptions about the future, is how myopic they seem,” wrote Barron. “They assume that the world will change around a stable, fixed point.”

Image credit: Zbynek Burival via Unsplash