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On Friday, during the show “Squawk Box,” CNBC Market Analyst Jim Cramer compared oil and other fossil fuel stocks to “the stigma attached to investing in tobacco companies” as shares of both Chevron and Exxon both fell in early trading Friday after announcing quarterly results. According to Cramer, young people’s views are having an impact — “This has to do with new kinds of money managers who frankly just want to appease younger people,” Cramer said. “We’re starting to see divestment all over the world.” And from the Big Ten to the Ivy League, universities are becoming a focus of divestment efforts — student leaders from across the Big Ten Conference last weekend called on their institutions to begin divesting from fossil fuels, representing 500,000 undergraduate students across 14 institutions.
Why This Matters: We are reaching a point where a consensus of public opinion — particularly young people who are pressuring their elders to change — is that fossil fuel stocks are bad investments, not just bad for their impact on climate change. When BlackRock announced its intention to divest, that was a huge signal to investors that its time to change strategies and put investment dollars into more sustainable businesses. And these big fossil fuel companies are not performing financially — missing their earnings targets is bound to dampen investor enthusiasm and may even trigger more sell-offs. Not to mention the increasing success of divestment efforts to generate bad publicity for holding onto fossil fuel stocks.
Poor Performance By Oil and Gas
One of the issues is that fossil fuel companies are not diversifying their energy portfolios fast enough and their stocks are losing value. Both Chevron missed revenue expectations, as well as Exxon’s lower earnings per share came in below what analysts expected. One of the biggest problems is the glut of oil and gas on the market today causing consistently low prices for oil and natural gas. However, CNBC’s Cramer also explained that even if oil and gas companies hit their numbers, he thinks the stocks will not turn around.
by Ashira Morris, ODP Staff Writer Cities and towns across Florida can no longer ban fossil fuels and prioritize clean energy projects after Gov. Ron DeSantis signed a new law. The bill preempts local plans that restrict or prohibit energy planning, nullifying 100% clean energy commitments in cities from Tallahassee to Sarasota. The law takes […]
by Natasha Lasky, ODP Staff Writer California has been struggling to regulate its oil industry in a way that protects human health. Though it’s been a year and a half since Governor Gavin Newsom directed oil regulators to install protections for Californians who live close to oil and gas drilling sites, no bills have been […]
by Natasha Lasky, ODP Staff Writer Two major American automakers are further ramping up their electric vehicle goals. General Motors plans to increase its spending on electric and autonomous vehicles to $35 billion through 2025, a 30% jump over its most recent forecast. Similarly, Ford Motor Company’s luxury Lincoln brand predicts that about half of […]
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