ESG isn’t holding back oil — so far

For all the concern in some quarters that Wall Street ESG policies threaten fossil fuels, a pair of analyses from a scholar with a Columbia University think tank say there’s scant evidence, Ben writes.

Driving the news: Gautam Jain, in a new analysis, explores whether the rise of ESG investing is resulting in higher borrowing costs for oil and gas companies.

• “So far, evidence shows that the answer is no,” writes Jain, a senior researcher with the Center on Global Energy Policy.
• That follows a separate white paper Jain co-wrote (and we covered) that finds ESG policies are not yet restricting access to financing.

The big picture: “[C]urrent evidence indicates that the growth of assets under management of funds with ESG mandates is not raising the cost of debt for investment-grade oil and gas companies,” he writes.

That said, the analysis notes that “ESG factors could be playing a greater role in high-yield companies, which by definition are weaker credits and are therefore vulnerable to added risks.”