A year ago, the world’s biggest resources companies were apparent slaves to the ESG movement. Many of them were open to ejecting their dirtiest fossil fuels from their portfolios to attract the cherished “green” premium offered by investors who wanted to own more climate-friendly companies.
Today, these very same companies are resisting the pressure to ditch their fossil fuels in the name of making their environmental, social and governance credentials more attractive – and they are getting away it.
How to explain the reversal? Turns out that the ESG-inspired sales and spinoffs were not as climate friendly as advertised and the entire industry is rethinking its approach to the “E” part of the ESG equation. At one point, coal seemed a goner, yesterday’s commodity – and good riddance.
The world’s top mining companies – BHP, Vale, Glencore, Anglo American and Teck, among them – were under enormous pressure to clean up their portfolios. The assumption was that the ESG crowd would punish those companies that kept coal and oil; to some degree, they did.