Harvard Endowment Lost $2.3B Last Year Due to ESG Investing
ESG investing is a euphemism from the left that means divesting from fossil energy companies. ESG investing has become all the rage in recent years. We have shared a number of articles about large pension funds in places like New York City divesting from fossil energy companies. As is typical, California is way ahead of the rest of the country in this regard. The huge California Public Employees’ Retirement System (CalPERS), with $479 billion in assets under management, has been investing using ESG guidelines for more than a decade. A recent Wall Street Journal article revealed CalPERS has lost huge amounts of money by focusing on ESG investing (see Dark Side of ESG – Huge Losses for Investors, High/Regressive Taxes). Harvard went all-in last year with its ESG investing program–and lost $2.3 billion!
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EnergyFunders recently launched a new fund called 
Energy Capital Ventures (ECV) is a venture capital firm focused on investing in startups that in turn, will focus on ESG (environment, social, governance) imperatives and digital transformation of the natural gas industry. ECV trademarked the term “green molecules™”–a term it developed to describe technologies spanning decarbonization, sustainability, and digitization of the natural gas industry. ECV announced it had received $61 million to fund its Fund I initiatives. Many of the investors come from the M-U region.
Equinor, Norway’s largest oil company (state-owned, used to be called Statoil before they became ashamed to have the word “oil” in their name), announced it had achieved 100% certification for its natural gas produced in the Ohio Utica using Equitable Origin’s EO100™ standard. Equinor now produces “responsible” natural gas for its 27,000 operational net acres, and 242,000 non-operational net acres. Congrats!
There’s ESG, and then there’s ESG. We’ve tried to make this distinction a number of times, and will use the latest ESG report issued by Antero Resources to make the distinction again. When a huge (very important) company like Antero Resources, a natural gas driller focused on West Virginia, talks about ESG (or Environmental, Social, and Governance), it’s talking about all of the things the company does to prove to wackos that it behaves in an environmentally responsible manner when extracting hydrocarbons out of the ground. When the wackos talk about ESG, they mean (a) get everyone to divest from fossil energy, and (b) if a company happens to be in the fossil energy business, it needs to move away from extracting oil and gas and toward investing in sketchy so-called renewable energy sources.
There is a growing chorus of executives in the C-suite of large (and small) companies standing up to say so-called ESG (environment, social, governance) investing and proposed regulations is a bunch of hokum. A large majority (75%) of CFOs recently surveyed by left-leaning CNBC do NOT support the Securities and Exchange Commission’s proposed ESG regulations (see 
Last Friday, the New York Power Authority (NYPA) released a report of the results of mixing so-called “green” hydrogen with natural gas and using the fuel to generate electricity with reduced emissions from a retrofitted General Electric combustion turbine. The experiment was conducted at NYPA’s Brentwood Power Station on Long Island. NYPA experimented with fuel blends from 5% to 44% hydrogen. The study found CO2 mass emission rates were reduced by approximately 14% by mixing in a 35% blend of hydrogen.
We are equal parts excited and repulsed by hydrogen as an energy source. We’re excited because, seemingly overnight, everybody and his brother (and sister) are jazzed about converting to hydrogen energy. Mountains of money are being poured into hydrogen research and infrastructure. The federal government is spending $8 billion (out of $1.2 trillion) to establish regional hydrogen hubs. Even companies in the Marcellus/Utica are jazzed because hydrogen production offers a huge new customer for M-U molecules. On the other hand, we’re repulsed because hydrogen is a “poor” fuel that faces “major obstacles” to its widespread adoption. We’re concerned about chasing after the wind–sinking a LOT of money into something that ultimately won’t pan out. Let’s have a hard and honest look at some of the downsides to hydrogen energy.
We have a growing unease about ESG, or “environmental, social, governance” efforts that are popping up like dandelions in springtime. We’ve spoken about this before. While we applaud the efforts by Marcellus/Utica drillers and pipeline companies (and others in the M-U supply chain) to ensure their businesses are responsible stewards of Mom Earth. Slapping an ESG label on those efforts (as M-U companies tend to do) is NOT what the environmental left is talking about when they use the same term. We see a number of ESG-related stories as we scan the news each day. Over the past few months, we’ve seen an increase in stories questioning so-called ESG efforts being forced on us by the left. We have several recent stories that plumb the depths of how ESG (as defined by the left) is bad for the U.S.
In early August, the attorneys general from 19 states, headed by Arizona AG Mark Brnovich and Texas AG Ken Paxton, sent a letter to the world’s largest investment firm, BlackRock, to say the company’s pressure on investors to divest from fossil energy companies based on so-called ESG (environmental, social, governance) criteria may, in fact, be illegal (see 
Bridger Photonics, Inc. is headquartered in Montana. Bridger developed a methane detection technology that is used by at least two companies with major operations in the Marcellus/Utica. Bridger recently announced it had received a $55 million investment from Beaverhead Partners LLC, a Montana-based syndicate. The money will help the company to expand its reach.
It does our heart good to see people pushing back against the woke leftism that is called ESG (environmental, social, and governance) investing. We always feel a bit conflicted when discussing ESG. We are NOT talking about companies, many of them in the Marcellus/Utica, that have programs and efforts underway to become ever better corporate citizens. What we are talking about is leftists forcing investors to abandon investments in fossil energy companies by using arbitrary ESG standards (that they make up and enforce). Companies that force ESG investing include the largest investment firm on the planet–BlackRock. We spotted an excellent story in the Wall Street Journal that says it’s time to bust up big woke ESG companies like BlackRock by using existing anti-trust laws. Amen to that!
The State of Florida has jumped on the divest-the-diverstors bandwagon. We have no doubt that Larry Fink, founder and CEO of the world’s largest investment firm, BlackRock, is now VERY concerned about the pushback he’s getting for pushing investors to divest from fossil energy companies. Two of the three largest states in the county (by population)–Texas and Florida–have decided to ban investments in funds that promote ESG–environmental, social, and governance. ESG is just another way of saying divest from fossil energy companies. And now the diverstors, like BlackRock and other Big Banks and Big Investment firms that divest, are themselves the targets for divestment. We love it!