Should I divest from fossil fuels?

Yesterday, all major news headlines were full of natural disasters from extreme weather caused by climate change. The deadly heatwave and the even earlier start of wildfire season are just two examples. That is so depressing!

Is there anything I can do to at least make my feel better? Saving money for an EV, recycle, consume less, live in a smaller house, use things longer until I run them to the ground, etc. Some of my clothes are from 25 years ago. Loose fit or empire waist is the secret. 😊

When it comes to investment, should I divest from fossil fuesl? Not easy for a Canadian especially in the past year. The energy sector is the savior thanks to the high oil price due to the war in Ukraine and world economy roaring back from pandemic lockdown with thirst for energy.

Many investment pros suggested to invest in oil stocks on TV in the past 18 months. President Biden just visited Saudi Arabia and fist pumped Saudi Prince Mohammed bin Salman. Biden was forced to change his stand on MBS due to his own low approval rating and domestic complains about the high oil price. I do feel very sorry for him squeezed and stuck between a rock and a hard place.  Those are all very convincing signs or evidence.

Some might say why bother with ESG investing – Environmental Social and Governance ? Most businesses are driven by greed anyway.  You just can’t avoid it. We are supposed to diversify. No? Just heard an investigative journalist from Toronto Star talking on how the three big grocery chains in Canada increased retail prices more than the additional cost caused by inflation. The big chains’ profit margins are higher while many Canadians can’t afford groceries and other necessities. Also, another sign of the over concentration of Canadian economy resulting in lack of competition.

In Canada, the energy sector counts towards 20% of the economy. That is a big chunk. My decision has been to invest in sector ETF to avoid fossil fuels. One sector to invest is financial which counts more than 30% of the economy. I know you might laugh. There were quite a few scandals of Canadian big banks’ unethical sales practice. The CBC reported that employees of the 5 big banks in Canada are pressured to lie to customers to meet their sales targets and keep their jobs. There is nowhere to turn!

I am still investing in big techs. There is no lack of unethical behaviors there either. Manipulating or even addictive algorithm to get youth hooked, selling customers data without their consent, unfair competition by big platform towards small business, on and on.  I can only open one eye with the other closed. With inflation so high, investing in stocks or stock ETFs/funds is one of very few ways to beat inflation. I don’t want to be a landlord to collect rent.

However, climate change is an emergency with dire consequences. All I can do is to prioritize. At least I can divest from fossil fuels. Hope the high oil price drives people away from it and stimulates the renewable energy industry to finally achieve energy independence from certain countries.

Published by Worthfy

Financial literacy and counselling

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