ESG appears to be the acronym for Economic Spurious Gibberish

The term “environmental social and governance” (ESG) appears to be a concept developed by Ivo Knoepfel of the University of Zurich via his paper “Who Cares Wins”. The paper led those who claim mankind is responsible for “climate change” to advocate the use of ESG terminology to further their “net-zero” by 2050 target! Interestingly, a recent referendum held in Switzerland related to the plan to reach net-zero emissions by 2050 was rejected by Swiss voters so their politicians will have to back away from their signature to the “Paris Agreement”.

The hypocrisy of those recognized as the “super rich” or the “elites” of the world pushing the “net-zero” emissions by 2050 and the need to audit ESG commitment(s) by all corporations is mind-blowing!

The foregoing was recently highlighted by the world’s largest asset manager BlackRock and one of Canada’s largest, namely Brookfield

An article in the FP highlighted their hypocrisy, with the headline: “Brookfield, BlackRock bids for Saudi Aramco pipeline underscore an ESG dilemma”. Both of these institutions have pushed the “climate change” agenda and the focus to reach net-zero, so one wonders; why are they competitively bidding to acquire a gas pipeline and how would it allow them to achieve their purported end goal?

To reiterate the latter point it is noteworthy to be aware that Larry Fink, founder of BlackRock in his annual letter to CEO’s in 2021 stated:  “we believe all companies – including BlackRock – must begin to address the transition to net zero today. We are taking a number of steps to help investors prepare their portfolios for a net zero world, including capturing opportunities created by the net zero transition.

Likewise if one looks at the claim made by Mark Carney (Vice Chair of Brookfield), after his appointment, he went on to say publicly: “The reason we’re net zero is that we have this enormous renewables business,” he said, and thus “all the avoided emissions that come with that offset existing investments in entities that emit carbon.“  The media pushback on his remark forced him to admit it was a false claim.

Both Larry Fink and Mark Carney are members of the Board of Trustees of the WEF (World Economic Forum) and Klaus Schaub, WEF’s founder, states you won’t be allowed to join the WEF unless the company or organization you represent have committed to achieve net-zero by 2050 or sooner!

Past and Present Brookfield Actions

Brookfield’s history goes back to 1899 but we will look at only a few of their activities in the past decade. Let’s start with their purchase in October 2012 of Enwave Energy for C$480 million owned jointly by the City of Toronto and OMERS (Ontario Municipal Employees Retirement System) at that time.  Enwave was, and still is, a district energy system provider, meaning they don’t generate greenhouse gases as the energy is geothermal (includes lake water) to heat and cool buildings.

Fast forward by almost 9 years to February 2021 and Brookfield announced they sold Enwave for US$4.1 billion (C$5.1 billion) to Ontario Teachers’ Pension Plan and Australian firm IFM Investors (each owning 50%) and presumably celebrated a very nice return on their original investment.  What is sadly amusing about this buying and selling occurrence is that one Government of Ontario pension plan (OMERS) sold their position back in 2012 for a fraction of what another Government of Ontario pension plan (OTPP) purchased it for in 2021. 

To make taxpayers more upset, back in 2019 former Minister of the Environment, Catherine McKenna handed Enwave $10 million of our tax dollars saying this partnership will help create jobs and help tackle climate change in asmarter way.“   

Just days ago, the (CIB) Canada Infrastructure Bank, (created in June 2017 to provide up to $35 billion to support infrastructure projects) issued a press release stating:  “The CIB is committing $600 million to the project which allows Enwave to accelerate and scale the build-out of its district energy systems.” The press release is vague in that it doesn’t indicate if it is an investment or a loan agreement. Either event will simply see tax dollars flying out the door while the Government increases our deficit and borrows the money they claim is for the good of the planet. The CIB now falls under the purview of Minister Dominic LeBlanc who in the past was singled out by Canada’s ethics commissioner when he “broke conflict of interest rules when he awarded a lucrative Arctic surf clam license to a company linked to his wife’s cousin.“

So, one should wonder, what did Brookfield do with that US$4.1 billion to assist them in their push to get to net-zero their Vice Chair Mark Carney, surely emphasized?  We don’t really know, but:

Brookfield wound up competing with Pembina Pipeline Co. for the purchase of Inter Pipeline and they won with a hostile takeover offer by outbidding Pembina with an accepted offer of C$8.6 billion.  One should surely wonder how that will assist Brookfield in getting to the “net-zero” target and how it fits with their 63 page ESG report for 2020?

The CEO’s letter within Brookfield’s ESG report contained the following:

Within our ESG initiatives, we are directing our efforts to the transition to a net zero carbon economy. This transition will affect virtually every business in every country, and we are fully committed to doing our part to decarbonize. In March 2021, we took an important step as part of our commitment to achieving net zero throughout our business: becoming a signatory to the Net Zero Asset Managers (NZAM) initiative.”

One should wonder with the foregoing ESG initiative why would Brookfield purchase a pipeline and pursue another one in the middle east in competition with BlackRock (another NZAM member)?

From all appearances ESG, ie: “Economic Spurious Gibberish“ is the acronym for the heading in this article and has nothing to do with “environmental social and governance” they pretend it does!

Author: parkergallantenergyperspectivesblog

Retired international banker.

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