Wednesday, September 6, 2017

A Fossil Fuel Free Global Equity Fund? It's not right. It's not real.

In Canada, RBC funds has launched a mutual fund that uses an exclusion process to avoid companies involved in extracting, processing and transportation of fossil fuels.

They state this investment process leads to high conviction research driven portfolios and returns defined by stock-picking, not style, with a low correlation to peers.

I replied to the company's communication with the following message:

I think the concept behind the fund is incorrect, irrational, incoherent and immoral. The energy from fossil fuels has: 
a) powered the industrial revolution, 
b) b) advanced knowledge and society more in two hundred years than in all prior history, 
c) lifted billions of people from poverty, 
d) enabled the potential for a safe, healthy, long and productive life for all of humanity, 
e) eradicated almost all human deaths from the naturally dangerous climate, 
f) enabled us to wipe out the worst diseases of the past,
g) empowered women, minorities, former slaves and anyone with the mind and determination to do so to succeed beyond the wildest dreams of pre-industrial society
h) much more.

To in any way promote the concept that fossil fuels, which presently provide 85% of all the power required to operate modern society, represent a meaningful threat to civilization instead of being the salvation of civilization is a monstrous distortion of reality and a disservice to all humanity. 

As a starting reference point, I have attached a fascinating article that studies the interaction between climate, human deaths and energy availability.

I note that every single holding in the fund relies utterly on fossil fuel energy to remain in existence. If fossil fuels were banned tomorrow, these companies would be instantly bankrupt and it would be the end of human civilization as we know it. With centuries of abundant, cheap, dense and portable fossil fuel energy available to us, not only is fossil fuel energy the fastest growing energy source in the world, but it is likely to remain by far the most important energy source for the next hundred years.

The company should be ashamed to be associated with the promotion of such a patently absurd concept as a fossil fuel free fund – it does not exist and should not exist.

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