Exxon Mobil, Exxon, Rex Tillerson discussed on Green Connections Radio - Insights on Innovation, Sustainability, Clean Energy, Leadership, Entrepreneurship, and Careers w Top Leaders, Women
Fuel investments ES g. is different insane in and basically. You know a personalized g if it was a being, but it's yes, jeez, basically saying is listen. We need. We need to figure out fossil fuel, but we can't live without fossil fuel for the immediate future. We need. We need a long-term strategy. So what ES g. does is they look at all of the energy companies and they rank them based on how well they do in environmental policies, Shoshu policies and governance policies. And so by doing this, you can reward those energy companies that are doing a better job by putting them in your portfolio and you can, and and so you can. You can actually reward those that are that are taking more responsible policies and trying to long-term figure this out and you can. You can hurt the ones that aren't doing that. So give us an example in in the news earlier in September, there was a huge example in that vanguard, which is the. The largest owner of stocks in in the world because they have so much money in different index fund vanguard actually voted their proxy against Exxon Mobil. And the reason they did that is because they didn't feel that ExxonMobil's disclosure on their climate change policies was adequate enough and they voted against management, which you know in my world is a big deal. Because here you have vanguard, which is basically for the largest part passive investor. They're in their in their index funds, and they actually took the stand and said, no, we want better disclosure around this and so-. Exxon. Does does not get a strong ratings in ESE world as something as something like a total. So total the French oil major and they score extremely well on ES g and and the reason is is because not only in their refining efforts, are they extreme, you know, extremely conscious of of their pollutants, but they're also a big investor in solar power and battery storage and so there. So the look at them as a company where they, they know that the world is changing and they know that they have they are on the forefront of being an energy company that shifting from fossil fuel into more sustainable forms of energy. What about BP BP is is, is, is, is another good example of a turnaround. We had BP had that huge spill in the Gulf after after that spill they really turned. Around there, environmental policies, and they actually score quite well now in ES she so there is a redemption factor that can happen here because you don't, you know, your ratings don't always have to stay low, and that's a good thing because that means that corporations will take notice of this and they will. They will change their policies, especially when there's dollars and cents behind it. Well, what's also interesting to me about your Exxon example is the when Rex Tillerson the secretary of state currently was CEO of Exxon Mobil. He came out in favor of the Paris accord. And and and most of the energy companies have, you know, 'cause they, they realize that they, we need to do something. So how do you consider the their position on climate change vis-a-vis or ES g formula? Well, there. So let me back up a little bit and just describe it. What's going on in ES she landscape is that the way the the way ESE is different than than SRI or social responsible, where when that's just exclusionary, that's just that you're basically just saying this company's a bad actor. I don't want it ES. She says, let's rank all the companies that are out there all the different stocks that we can buy and we'll score them from zero being the worst actor to a hundred being the best. And so by doing this, we can get a relative score of how well a company is doing in its sustainability ranking. And so that that gives us the ability to make a more a more informed decision about whether we want to invest in a company or not because it's not. It's not just buying airy enter. They're out. We can look evaluate into. Okay. How are these different, how different companies doing versus the the, you know the overall market or versus each other? So is it versus their competitors or is it versus like, do you have a a chart of those who score just type athetics if if it's a score of zero, one hundred, do you say? You know, we'll only invest in companies that score over eighty percent, for example, or do you compare industry by industry?.