CPPCanada Pension Plan Investments (CPP) is on the hunt to buy utility and oil and gas assets unloved by competitors seeking to unload polluting assets, then profit from reducing greenhouse gas emissions and put them back on the market, Chief Sustainability Officer Richard Manley said on Thursday.
Money managers have piled in to the renewable energy sector as part of a broad drive to limit environmental damage in recent years, leading to lofty valuations, and some have turned away from traditional energy businesses.
BOE Report.
The largest vulture on the fenceposts is planning to monetise high emissions oil. Great news for the patch because CPP will have no problem with AER over well transfers. This strategy won't affect GXE but will mean better balance sheets for those fortunate enough (and large enough to attract CPP) to peddle their high emissions production.
The more daring hedgies and p/e are likely to overcome the climate anxiety as their shareholders' greed supercedes their climate posturings. Oilcos themselves are looking at lowering emissions under ESG to assuage the general investors' anxieties not over emissions so much as they are about the public perception of the oilcos' efforts at reducing emissions: the success or failure at greenwashing operations.
The generalist investor will come back to oil, driven by profit, if nothing else, hypocrites that they are but too late and too little to influence a rerating for GXE.
The future for GXE will include being swallowed whole by an accumulator with market power at a slight premium to market or becoming an insignificant entity whose diminishing assets attract little attention. The strategic initiative is the right move.