Week 3: How sustainable is Tesla?

In this issue: ▸ Would Nikola Be Proud of Tesla? ▸ Kerry speaks about climate ▸ US is back in Paris – now what? ▸ Should green investors buy oil stocks?

Dear all,

I hope everyone is well and ready for a new edition of ‘ESG on a Sunday’!

Would Nikola Be Proud of Tesla?

The main story this week is my new ESG analysis, published today. It’s about Tesla Motors, and also about two big characters: Nikola Tesla and Elon Musk.

I can’t help but wonder what Nikola Tesla would say about Elon Musk. Would he, as one of the most genius scientists that ever walked on this planet, view Mr Musk’s incredible business achievements in the same light as stock markets are viewing them? 

In the analysis I do my best to dig deep behind the flashy 100 km/h in 3 secs that one of Musk’s vehicles can perform. How sustainable is Tesla really? We all see the benefits, but what about cobalt mining, labour rights and the company’s climate path? How does it all add up?

IN OTHER NEWS…

Kerry speaks about climate

This week, John Kerry spoke remotely at a B20 meeting. B20 is a forum for the global business community to make their views known to the G20 group of countries. President Biden has picked the former presidential candidate and Secretary of State to be his Special Envoy on climate change.

Kerry’s message was that the US would now move forward with “humility and ambition” in the global climate negotiations. Time is very short, he argued, and the world is currently moving much too slowly to avoid dangerous warming.

However, it was disappointing to note that in his speech – you can read it here – there was no mention of the finance sector and its important role in solving the climate crisis.

US is back in Paris – now what?

Yes, the US has rejoined the Paris agreement. That’s of course very good, and great to see swift action. But what does it really mean? I am not so sure.

On a practical level, the US must now submit a plan to reduce emissions, known as a nationally determined contribution (NDC), with a 2030 goal. But when that plan might be finalised and what it might say is not yet determined. 

Or as Alden Meyer from think-tank E3G commented: “The easy part is rejoining Paris.”

Read more in this piece from Financial Times.

How optimistic should we be?

For most (if not all) observers, Biden is a big cause for optimism. But how optimistic can we allow ourselves to be? In this piece in the New York Times, columnist David Brooks argues that Biden is a more transformational president than you may think.

The column gives a very real picture of the challenges the US is facing. The underlying question and challenge that Biden (and the US) is facing is: Unity around what? Biden’s answer seems to be “dignity”.

David Brooks ends on a hopeful note: “It’s possible America may emerge from this trauma more transformed than we can imagine.”

Should green investors buy oil stocks?

If you support green energy, should you buy utilities and oil stocks? The answer is not as simple as it seems. Things get complex once you explore further.

Some interesting points are made in this article. One of them being that avoiding utility and oil stocks means investors miss out on buying the companies powering a transition to green energy and making an impact on the environment.

That’s it for now. Have a great week!

Kind regards, Sasja