[petterroea]

In Norway the oil fund are actively arguing against boycotting these kinds of companies saying, and I paraphrase: "but our job is to earn money and we can't do that if you hippies keep standing in the way with your morals"

Good to see it isn't necessarily the case.

[petterroea]

For some context, this Norwegian cartoon by a group that used to make satire for the government run news agency is a pretty decent summary of how things were discussed: https://www.youtube.com/watch?v=9mkuP6kQwNs.

The old man is a caricature of Jens Stoltenberg (who seems to be running the Norwegian economic machine rather well nowadays, controversial or not)

[jcoyne]

> our job is to earn money

Which is exactly why you wouldn't put it in a company with a ridiculous valuation.

[kyleblarson]

I don't know the AUM of this pension fund but if the managers were doing their jobs they should have had at least a tiny bit of exposure to SpaceX years ago.

[davedx]

If you want to make money, buying SpaceX stock isn't the way to do it

This is about valuation not ESG

[xorcist]

ESG is supposed to be about valuations, long-term. People conventiently tend to forget that when it doesn't suit them. It has been shown over and over again that it is a working predictor of valuation, in which it is not alone of course. Economy students regularly invent such predictors. And the dirty little secret about ESG is that it is probably G that is doing the heavy lifting. Companies without good governance seldom survive the first change of leadership.

No one in the green movement ever spoke about "ESG" as if that was a thing. It is an investor thing. Invented by bank economists, to sell financial products. It's not like your local environmentally concious hippie type figure would suddenly start investing in Shell, just because they improved their ESG score.

Does it work as a predictor for company valuation? It seems so. But it would probably have worked better if you separated E and G, because they have nothing to do with one another. Will it work in the future? No one knows. Once you start gaming these things, all initial bets are off by a lot.

Just don't say "valuation, not ESG". It does not make sense. If you mean "short term valuation, not long term", then just say so.

[mejutoco]

The sovereign fund of Norway also researches a lot of the state of the companies and then invests into the whole market vs the ones they dont consider good according to some metric. Sounds like this Danish example.

[scoofy]

The secondary market isn’t where morally dubious choices get made.

There is a huge difference between funding oil extraction that is happening anyway, and funding a company to start extracting oil.

However, this is the intersection of consequentialism, deontology, and virtue theory.

[lefra]

Both are asking for money to extract oil (and hopefully sell it for more money). I don't see why the oil well being already drilled or not should make a difference if I don't want to invest in CO2-producing endeavours.

[scoofy]

The point is that in the secondary market, the oil will be extracted regardless. By you not participating, you actually increase the return on equity for others, making it more profitable. Buying the stock does not add money into the business.

The area for disincentivizing oil production is the political sphere, not the financial sphere. Refusing to participate in secondary market ownership does almost less than nothing to disincentivize the extraction. At least with ownership, you get a say in the firms harm mitigation.

[lefra]

To be clear, I was answering your second paragraph, about "funding oil extraction that is happening anyway". I understood this as "buying shares directly from the extracting company".

I agree that buying on the secondary market doesn't directly give money to the company. However, it increases demand (and therefore price) of shares in petrol companies, which might help them raise more money per share for new projects.

The earnings coming from such shares also comes from actively encouraging CO2 producing activities. Some people don't want to earn money that way, because they think it is morally wrong.

[scoofy]

>Some people don't want to earn money that way, because they think it is morally wrong.

I mean that's fair, but it's also why I brought up the three major schools of ethics. The consequentialist likely won't care if it's going to happen anyway. The virtue ethicist will.

[sehansen]

By increasing the return for other investors I'm increasing the cost of capital for the oil exploration companies. So: Yes, not buying shares in existing oil companies will (ever so marginally) decrease oil exploration.

[petesergeant]

That’s exactly what you would want your money manager to say. It’s their job to turn a profit.

In turn you also want democratically elected politicians above that saying “yes, but the people want their money made ethically, so you can’t do that”.

[embedding-shape]

> That’s exactly what you would want your money manager to say. It’s their job to turn a profit.

The job of the police is arresting people who break the law, but similarly to your money manager, you really don't want them to do this regardless of anything else, there is more things to consider than just "do everything you can to arrest people", and hopefully the same for your money manager. But also, I might be too European to understand the true value of "money grow regardless of society cost at large".

[petterroea]

Of course, some back-and-forwards is healthy.

In a good system both sides fight for their interests, and the outcome is some middle road compromise that optimizes for everyone's benefit.

[Natfan]

sorry, but i wouldn't want my money manager to attempt to engage in unethical or illegal practices in order to turn a profit...

[chabska]

The point is that it's the job of the democratic legislature to codify what you just stated here into law, so that all money managers have to abide by this standard, not just those that have a personal conviction for it. That's the essence of rule of law.

[DangitBobby]

You can't have a functioning government if it's elected by a corrupt society. Exhibit A, current US situation.

[s1artibartfast]

There is room for both. Not every aspect of morality needs to made law, as significant portions are subjective and debated. Law should be a least common denominator.

This leaves room for individuals to act in accordance with their morals above and beyond the law.

[SlinkyOnStairs]

It's maddening how quickly ESG and similar programmes have been thrown in the dumpster once the political climate in the US swung back to "anti-woke".

> "but our job is to earn money and we can't do that if you hippies keep standing in the way with your morals"

What these clowns conveniently forget is that their job is not just "to make money" but to make money over a span of decades and centuries in the case of the sovereign funds. A long term investment fund that optimizes for the next quarter at the expense of the long term is a bad fund.

And so the ESG and woke "hippie bullshit" is nothing more than the basic capitalism of maximizing your gains by 2100 by not destroying the one planet all your companies are on.

Long term funds do not have the luxury of being passive owners. If they take no role in management, that role will instead by taken by whatever short-term owner walks in next. They don't care about the value by 2100, they just want the company to tear the copper out of it's own walls so they can sell with a profit by next quarter, retail even sooner.

[Geee]

How is Tesla destroying the planet? In my mind, Tesla is one of the most important companies in transition to clean energy. Yet it got dropped from the S&P ESG index.

ESG is just another phony way for someone to manipulate stock prices, because it's decided by some committee with arbitrary and opaque ways. And that's why no one takes it seriously any more.

[SlinkyOnStairs]

> How is Tesla destroying the planet? In my mind, Tesla is one of the most important companies in transition to clean energy. Yet it got dropped from the S&P ESG index.

ESG is more than just the environment. In Tesla's case, Elon Musk's governance is a serious risk to the corporation.

> ESG is just another phony way for someone to manipulate stock prices, because it's decided by some committee with arbitrary and opaque ways.

Right now as we speak, a bunch of "arbitrary opaque committees" are deciding to rush SpaceX, Anthropic, and OpenAI into the major stock indexes.

Even completely passive investment leaves one at the whims of said committees.

[__Joker]

Yeah, there is lot talking out of both sides of their mouth here.

If nothing else, at least these should be choice of users to let them choose based on their values and requirements.

[ImPostingOnHN]

The pension fund is the user of the stock here.

Pensioners should get the same amount regardless of investments, as long as there is enough funding, which it seems there is for the moment.

Of course, if someone wants to risk their own money, they can invest in whatever they want. They can even sell their pension for a cash lump sum and invest that.

[intended]

By who exactly ?