Profits / Investments
The insurance industry is trying to maximize profits - while analyzing the consequences of pollution.
Worryingly, "insurers paid out more in claims than they received … and those losses are increasing.”
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If homes get destroyed more frequently there is a plan:
Raise rates in most places, and stop insuring in others. "It’s going to [become] harder to get insurance."
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If insurance companies won't/can't help, the government could come in.
The “National Flood Insurance Program has paid to rebuild houses that have flooded 6 times over.”
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Some areas will become “climate abandonment neighborhoods”.
We "face brutal choices about which communities to save ... and which to sacrifice.”
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Weather & insurance expenditures are "resulting in a steady increase in the ... cost of homeownership.”
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In addition, insurance companies make money by insuring the biggest pollution-profiteers.
"Liberty Mutual is insuring new tar sands pipelines, coal mines, oil rigs, and ... fossil fuel extraction.”
“Major insurance companies invest more than half a trillion dollars … in fossil-fuels.”
Insurance companies, investors, and businesses deliberate over ethical quandaries regarding pollution.
Stories of DuPont, Boeing, and Monsanto provide examples of how profits are valued.
Monsanto knew "PCBs were harmful and pervasive, [yet] kept selling them." "They [hid] the dangers [to] profit.”
In separate scandal, Monsanto tried to intimidate farmers: "'We will get you. You will pay’.”
Companies such as 3M and DuPont placed “‘profit above public well-being’.”
PFAS can cause problems with fertility, cancer, "hormone disruption, and [the] immune system.”
“Manufacturers of these toxic chemicals [knew] about their hazards for decades.”
Problems with Boeing airplanes followed a change in corporate leadership.
“What got lost [at Boeing] was a corporate culture that ... prized engineering and safety."
It was replaced by one that "focused [more] on delivering profits.”
Are corporate-leaders willing to grab money - in an unethical way - as long as they don’t go to jail?
Oftentimes yes. Bringing in big bucks is what they were hired to do.
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A few years ago, (positive) Impact / ESG / SRI investing became popular, and some of it was legit:
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”Pension funds" asked "portfolio managers [for] more climate-sensitive offerings [& to] divest from oil.”
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Businesses and investors, attempted "to protect ... assets and investments from climate risks.”
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“Private bank investors [were] tilting ... to renewables.”
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However, the biggest pollution-profiteers found a way to fight back against this limited progress.
-- "Wall Street’s retreat from earlier environmental pledges has been on [track] for months"
-- Exxon said the idea to get "out of the oil & gas business" would decrease shareholder value.
Much of the money-moving was to gain profit (or avoid losing $), not to clear the air:
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“A majority of directors at major banks ... are connected to polluting companies.”
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“Big banks have been making billions of dollars from bankrolling fossil fuels.”
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When will there be a transition to renewables? Investors like their reliable pollution-fueled profits, nevertheless:
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Fossil-fuels may "become stranded assets, and investors don’t want to be left holding the bag.”
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If the fuels "need to stay in the ground”, $ for oil and coal "is inflating a multi-trillion-dollar bubble.”
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Will you put $ "into fossil-fuels until ... demand" drops, and then find what you "own is worthless"?
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OR, what if “Black pays for Green”: use pollution profits to gradually invest in a cleaner economy?
Carmakers could produce electric cars, and oil / gas companies could become wind / solar companies --
but only after making as much money as possible from more-polluting / more-profitable kinds of business.
One Big Oil CEO said: "'Black pays for Green'". Could that really work?
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“Companies, financial institutions and governments pledged to end deforestation” (2014) re palm-oil & beef.
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Instead, deforestation accelerated. It's "'a deforestation economy'." “'It’s in our investments and pensions'."
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In 2020 the CEO of Volkswagen was removed:
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partly due to his "cost cutting plans ... for a radical shift toward electric cars.”
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The CEO of Ford had plans to move away from polluting vehicles but:
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“The company is … reducing [what it'll] spend on electric vehicles ... to stem multibillion-dollar losses.”
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"Ford CEO Jim Farley said ... ‘It was really the customer changing their decision'."
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Hertz sold thousands of its EVs, and replaced "the CEO who helped build up [the EV] fleet."
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“‘The execution and marketing of EV’s [by Hertz] was a horror show’."
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One gas station owner,
"has not ... installed an EV charger 'because there’s not really much profit'” in it.
An EV charger costs more than $125,000 - “a double sided gas pump ... $20,000.”
Pollution-producing businesses make up a big part of the US economy:
Autos - 3.5%
Tourism - 3%
Aviation - 5.5%
Dairy - 1%
Shipping / steel / timber / cement / aluminum / fertilizer / trucking - are also pollution-heavy businesses.
Total these up, and pollution-profiteering organizations would account for at least 25% of GDP!
More than ¼ of our USA economy comes from polluting enterprises? Could that be right?
No wonder we've had insignificant greenhouse-pollution reductions since scientists began warning us to stop.
Would you be willing to quit your job - if applicable?
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Consider where we spend our money.
“USA Refinery yield 1993 - 2010:
46% - Finished Motor Gasoline [to be burned in automobiles]
29.5% - Distillate Fuel Oil (for trucks, locomotives ... tractors ... home heating and electricity)
9.1% - Kerosene-Type Jet Fuel” (aviation)
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Like at Volkswagen & Ford, decisions made at BP (formerly British Petroleum) provide a controversial example:
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However,
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"'If this [was] sunset ... for oil and gas, someone forgot to tell consumers’.”
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BP's multi-billion dollar eco/green gamble "failed to pay off".
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Looney was replaced as CEO in 2023, and the company abandoned its "goal to cut oil output."
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BP shifted to a focus on financial sustainability, "rather than ecological” sustainability.
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BP replaced its Chairman of the Board, Helge Lund. "Lund had backed BP's … move away from oil and gas.”
By moving toward renewables, the 1990's CEO of BP (John Browne) claimed
he was responding to "the wishes of consumers [who demand] cleaner alternatives.”
Browne left BP in 2007, and the company backed away from his "Beyond Petroleum" ideas.
In 2020, Bernard Looney took over as CEO. He also hoped to steer BP toward a green transition.
Thinking that humans will move toward renewables, he wanted BP to profit from this trend.
Looney got BP to go forward with the biggest "decarbonisation pledge" of all the oil majors in 2020.
A low bar perhaps, but BP did spend more $ on renewables than its competitors.
"BP's investment in green technologies peaked at 4% of its exploratory budget."
While BP was unearthing millions of barrels of oil equivalent daily, they also sold
a profitable methane-gas operation (Oman, 2021) to help "raise cash for ... renewable-energy projects."
Investors will sell their shares in fossil-fuels if you and I stop buying fossil-fuel products.
The basis "of the global economy is consumption”
“Oil companies posted bumper earnings for the 2nd quarter," "driven by the return of air and road travel.”
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“The U.S. represents about 5% of the human population, but it consumes a quarter of the world's oil.”
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“The transportation sector is still 92% powered by petroleum products.”
Our spending habits send the investor community a message. What do you want them to hear?