If the ESG movement had one target, it was coal, the grubbiest of the fossil fuels. Mining companies in the Western world eventually succumbed to ESG pressure when they realized that sending their coal operations packing would not only clean up their acts but create value, as investors would reward them for having done good for the planet.
So out went the coal, and the share multiples of the companies behind the spinoffs or sales of the fuel climbed. But coal not only refused to die a polite death, it became hugely profitable after Russia invaded Ukraine a year ago, triggering an energy crisis that sent many countries, from Germany to Pakistan, scrambling for the product they once vowed to downgrade to fringe status.
This phenomenon, in turn, inevitably triggered creative financial engineering designed to both get rid of coal and, in effect, keep it at the same time. No company refined this sleight of hand better than Teck Resources Ltd., a producer of copper, zinc and metallurgical coal with a market value of $27.3-billion, making it Canada’s premier mining company.
Last week, Teck unveiled a have-your-cake-and-eat-it-too deal that makes a mockery of the environmental, social and corporate governance strategy that had been pushing the resource industry to get rid of its dirtiest products.