A reckoning for ESG funds as market falls, plus the electric pickup wars begin

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By David Callaway, Callaway Climate Insights

Good day and happy Jan. 6. We’ll leave the picking-over of last year’s insurrection in Washington D.C. to the others, except to note that at the heart of all the trouble is misinformation — and disinformation. Much like in the climate crisis.

Lots of other things to mark this week, including the passing of the BlackBerry, which I loyally carried with me for years after I bought my first iPhone, just in case. Closer to home for this newsletter comes the fact — from an alert reader — that 2022 marks the year in which the 1973 cult thriller Soylent Green was supposed to take place.

Readers of a certain age may remember the movie depicted a world virtually destroyed by climate change, in which the elite lived behind armed gates and the masses subsisted on horrid wafers made by the Soylent Corporation (add your own modern-day equivalent here), including a supposedly nutritious brand called Soylent Green. Turns out the food was made from the bodies of the masses.

Coming just three years after the first Earth Day in 1970, the movie is notable for the role Hollywood played in those days in imagining, through science fiction, what our world would be like today. Thankfully, it was wrong. Advances in food science continue to evolve and the most significant achievements in fighting global warming in the next decade may indeed come from the agricultural industry.

As we worry about inflation, Covid and what the markets might do tomorrow, it’s sometimes worth it — at this time of year — to reflect on just how far science, technology, and capitalism have taken us. Especially when we imagine where we’ll be 49 years from now.

More insights below. . . .

Zeus: The Christmas lesson behind a sustainable fund massacre

. . . . In the final 48 hours before Christmas a few weeks ago, a major international pension fund sold all of its holdings in one of the largest sustainable emerging markets funds, representing more than 90% of the fund’s total assets under management. Even in today’s whipsaw markets, that is unusual. But the BlackRock iShares fund event yielded two important lessons for potential environmental, social and governance investors as the nascent market begins to mature, writes David Callaway in his Zeus column. . . .

Read the full Zeus column

Not one of these climate-friendly, exchange-traded funds beat the market in 2021. What now?

. . . . Last year was a tough one for investors in climate-friendly, exchange-traded funds. But a special collection of 20 popular ETFs put together by Mark Hulbert reveals just how bad it was. After a huge performance the year before, investors who made it through 2021 and are licking their wounds will now have to challenge themselves about how committed they are to environmental, social and governance investing when the chips are down. What happens next could affect the entire ESG storyline. . . .

Read the full column

Thursday’s subscriber insights: Is Chevy’s Silverado EV too late to the party?

. . . . The electric pickup truck wars began in earnest this week when General Motors (GM) revealed its new Silverado EV in Las Vegas at CES, along with claims it has more range and power than Ford’s (F) new Lightning. Looking at historical sales trends of pickups between the two companies, we assess how this new front in the auto wars will play out once the Silverado is online. Read more here. . . .

. . . . Solar innovation isn’t just for rooftops anymore. New projects that put solar panels on parking lot canopies that collect energy while protecting vehicles from the sun are starting to crop up in the U.S. And in China a floating solar array — the largest in the world of its type — on a huge reservoir, purports to reduce evaporation from the water source while also saving valuable land for better use. New markets perhaps coming just in time for beleaguered solar stocks. Read more here. . . .

. . . . With its new composting law, California hopes to halt the huge methane output from food waste in its landfills. Composting has proved very successful in Europe, where the food scraps are turned into fertilizer. But outside of Vermont, California is the only state trying it. Will it catch on in other states? Read more here. . . .

Editor’s picks: world’s first small modular reactor; yet another wildfire blamed on Pacific Gas & Electric

China powers up the world’s first small modular reactor

China has connected its first small modular reactor to its power grid, furthering the country’s support of new nuclear energy technology, Bloomberg reports, citing a WeChat post from the China Nuclear Energy Association. According to the report, another reactor is undergoing tests before being put into full commercial operation next year. Bloomberg says the plant is the world’s first pebble-bed modular high-temperature gas-cooled reactor, heating up helium instead of water to produce power: “It’s a so-called fourth generation reactor, designed to shut down passively if something goes wrong — in contrast to active systems that may not be able to trigger safety measures if power fails, which is what happened at the Fukushima Daiichi accident in Japan a decade ago.” China is expected to spend up to $440 billion on new plants over the next 15 years and overtake the U.S. as the top generator of nuclear electricity.

PG&E power line sparked massive Dixie fire

California regulators said this week that a Pacific Gas & Electric Co. (PCG) power line was responsible for starting the Dixie fire, which burned nearly a million acres in five Northern California counties, destroyed more than 1,300 homes and caused damages estimated to top $1.15 billion. The California Department of Forestry and Fire Protection said in a news release that investigators found that the fire “was caused by a tree contacting electrical distribution lines owned and operated by Pacific Gas & Electric.” The department’s investigative report was forwarded to the Butte County district attorney’s office, according to the statement. It’s at least the fourth major blaze CalFire has pegged to PG&E equipment in recent years.

Words to live by . . . .

“So this is what climate change looks like: operating on the margins, yet able to dramatically alter the story on center stage.” — Colorado journalist Allen Best, speaking of last week’s rare, devastating winter firestorm near Denver.

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