Oil & Gas: "You are nowhere..."
Neil Brown, SRI Fund Manager
23 February 2013
I had the great pleasure of taking part in the UN PRI’s signatory event last week at which we launched the report on Integrated Analysis. Attendees had the chance to see first-hand the kind of high quality analysis we have reviewed in that report.
Michael Raab from Kepler discussed his work on Road Safety and the opportunity that he believes auto parts manufacturer Continental AG represents as it delivers active safety equipment to help reduce the unacceptable fatalities on our roads.
We also heard from Stephane Voisin and Erwan Crehalet of Cheuvreux on their views around the financial risks posed by divergent Health & Safety track records amongst the Integrated Oil companies operating in deep reservoirs.
These were both great pieces of work in my opinion which integrate a clear Environmental or Social factor directly into the company fundamentals and valuation.
Following the presentations our compère for the day, Mike Tyrrell, of SRI-CONNECT, issued an interesting challenge to the asset owners in the audience:
“… If you or your asset managers have not read Cheuvreux’s piece on Health & Safety in the sector;
… if you’ve not read HSBC’s piece on Unburnable Carbon;
… if you’ve not read Natixis’ and SocGen’s pieces on Arctic Drilling; (Natixis research here | Soc Gen research here)
… if you’ve not read Goldman Sachs’ latest Sustain overview of the sector;
… if you’ve not read BAML’s piece on Unconventionals;
…then you are NOWHERE on the challenges facing the sector over the years ahead. You are NOWHERE!”
Now I grant that ... “Nowhere” is a bit strong and I’m certainly not endorsing his use of language around potential clients. But he does raise an interesting point that was picked up in the panel afterwards. These are serious research teams delivering serious research on these subjects. Have you read it?