The Role of Value Investing in Accelerating the Energy Transition
The past decade in investment management, corporate governance and financial oversight has been described as “the age of ESG.” Environmental, social, and governance principles have redefined the relationship between corporations and their shareholders—and increasingly their regulators—shifting from one focused purely on returns to one focused on a broader set of societal goals.
In the energy space, ESG principles have raised the cost of capital for fossil fuel investments and helped scale renewables, arguably with mixed and sometimes controversial results. A dearth of investment in upstream oil production contributed to the surge in oil prices in 2022, and it remains unclear if renewable energy alone can affordably power the global economy while supporting rising living standards in developing economies.
ESG may be ready for a re-think.
Jeff Ubben is the Founder and Managing Partner at Inclusive Capital Partners, which he founded in 2020 following a storied and successful career as an activist investor. At Inclusive, Ubben’s investment approach argues that superior returns will accrue to companies that use, or are transitioning to, sustainable business models to solve environmental and societal problems. But this is not your standard ESG investment thesis. Ubben is also on the board of Exxon Mobil, the world’s largest privately-held oil and gas producer, and has deemed his approach, “the anti-ESG ESG strategy.”
Join EPIC as we host a conversation between Jeff Ubben and EPIC Faculty Director Michael Greenstone on the role of value investing in accelerating the energy transition and how ESG gets it wrong.