Environment

Like defense, Goldman says ESG investors should bring oil and gas stocks in from the cold

Published

3 months ago

April 14, 2025

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An oil pumpjack is seen in a field on April 08, 2025 in Nolan, Texas.

Brandon Bell | Getty Images News | Getty Images

Just as many mission-driven fund managers have reconsidered their defense policy in the wake of Russia’s full-scale invasion of Ukraine, an analyst at Goldman Sachs says it is now time for sustainable investors to re-evaluate their approach to oil and gas companies.

It comes at a time when European energy majors have slashed renewable spending and doubled down on fossil fuels in an effort to boost near-term shareholder returns.

Investments focused on environmental, social and governance (ESG) factors tend to favor companies that score highly on certain criteria, such as climate change, human rights or corporate transparency.

Tobacco giants, fossil fuel companies and weapons makers have typically been among those to have been screened out or excluded from sustainable portfolios.

“In the same way that the sentiment on defense companies has changed with the Russia-Ukraine war, I think the sentiment on ownership of oil and gas should change,” Michele Della Vigna, head of EMEA natural resources research at Goldman Sachs, told CNBC by video call.

A persistent unwillingness to own energy majors is biased by a “major mistake” in evaluating the energy transition from the perspective of European investors, Della Vigna said — an approach that he expects to change.

We see record-breaking temperatures, rising greenhouse gas emissions, oceans warming and sea level rise. I mean, why would we want to see more fossil fuels? Most ESG investors would not.

Ida Kassa Johannesen

Head of commercial ESG at Saxo Bank

Goldman’s Della Vigna outlined three reasons to back-up his view on why ESG investors should bring oil and gas stocks in from the cold.

“Let’s be clear, this energy transition will be much longer than expected. We are going to have, we think, peak oil demand in the mid-2030s [and] peak gas demand in the 2050s,” Della Vigna said.

“And we clearly show that we need greenfield oil and gas development well into the 2040s. So, if we need new oil and gas development, why wouldn’t we own these companies?”

The International Energy Agency, meanwhile, has said it expects fossil fuel demand to peak by the end of the decade. The energy watchdog has also repeatedly warned that no new oil and gas projects are needed to meet global energy demand while achieving net-zero emissions by 2050.

Della Vigna’s second point was that oil and gas companies represent some of the biggest investors in low-carbon energy worldwide, adding that a failure to both engage with, and finance oil and gas stocks would ultimately serve as a barrier to the energy transition.

In addition, Della Vigna said that unlike utilities, which he described as infrastructure builders, oil and gas companies are “market makers” and “risk-takers.”

An array of solar panels create electricity at the Lightsource bp solar farm near the Anglesey village of Rhosgoch, on May 10, 2024 in Wales.

Christopher Furlong | Getty Images News | Getty Images

“So, we need their capabilities, the balance sheet and the risk-taking. They are some of the largest investors in low carbon and whether we like it or not, we also need their core businesses of oil and gas,” Della Vigna said.

“Otherwise, we will not have affordable energy, especially for emerging markets, and we will have energy poverty, which I don’t think is acceptable in any ESG framework,” he continued.

“I think the energy companies that lead the energy transition should be a cornerstone of ESG funds — not a divestment target,” Della Vigna said.

‘Some loosening around the edges’

Not everyone is convinced that oil and gas stocks should follow defense companies into an ESG portfolio.

“I think it is a bit extreme,” Ida Kassa Johannesen, head of commercial ESG at Saxo Bank, told CNBC by video call.

“Just because defense stocks have gained favor doesn’t mean that oil and gas should also gain favor. I don’t think we should compare the two directly,” Kassa Johannesen said.

“We can see the negative impacts of oil and gas. The current climate situation is not good. We see record-breaking temperatures, rising greenhouse gas emissions, oceans warming and sea level rise. I mean, why would we want to see more fossil fuels? Most ESG investors would not,” she added.

Scientists have repeatedly pushed for rapid reductions in greenhouse gas emissions to stop global average temperatures rising. These calls have continued through an alarming run of temperature records, with the planet registering its hottest year in human history in 2024.

Extreme temperatures are fueled by the climate crisis, the chief driver of which is the burning of fossil fuels.

Allen Good, a senior stock analyst covering the oil and gas industries at Morningstar, said it’s difficult to foresee a time where there will be a total acceptance of oil and gas in ESG.

He added, however, that a slightly more relaxed approach from investors is feasible on the basis that energy majors significantly increase the amount they invest in renewable and low-carbon technologies.

An Exxon gas station is seen on August 05, 2024 in Austin, Texas.

Brandon Bell | Getty Images

“I mean ESG, to me, it’s whole raison d’être is the energy transition [and] climate change. So, I would find it hard to believe that they would say they are going to start investing in oil and gas companies,” Good told CNBC by telephone.

“Now, I think what you could start to see is some loosening around the edges, whereby they come to some agreement where a company is investing X amount in renewable energy, or their earnings will be X amount in 10 years, then maybe a Total[Energies] gets into the portfolio. But someone like an Exxon or even a Chevron … I would find that hard to see how that gets in ESG,” he added.

Environment

Trump targets solar and wind with tighter federal permitting in another blow to renewable industry

Published

1 hour ago

July 17, 2025

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Trump targets solar and wind with tighter federal permitting in another blow to renewable industry

Doug Burgum, U.S. Secretary of the Interior speaks during the Pennsylvania Energy And Innovation Summit 2025 at Carnegie Mellon University in Pittsburgh on July 15, 2025

David A. Grogan | CNBC

Solar and wind projects that need federal permitting will face even closer scrutiny by the Trump administration, with Interior Secretary Doug Burgum now making the final decision on whether they proceed on U.S.-owned lands.

Burgum will now have “final review” of leases, rights-of-way, construction plans and every other aspect of the Interior Department’s federal permitting process for wind and solar projects, according to an internal memo published by the department on Thursday.

The Interior Department said in a statement that it is “levelling the playing field” for coal and natural gas “after years of assault” by Biden administration. The renewable industry’s main lobby group the American Clean Power Association said the action amounted to politically motivated obstruction.

“The Interior Department adds three new layers of needless process and unprecedented political review to the construction of domestic energy projects,” ACP CEO Jason Grumet said in a statement.

“This isn’t oversight. It’s obstruction that will needlessly harm the fastest growing sources of electric power,” Grumet said.

Interior is adding bureaucracy and red tape that will slow electricity production growth at a time when demand is rising from artificial intelligence data centers, said Stephanie Bosh, a spokesperson at the Solar Energy Industries Association.

“It is deeply unfortunate that this administration’s energy policy continues to favor specific technologies rather than advance true American energy dominance,” Bosh said in a statement.

Interior’s action is the latest blow delivered to the renewable energy industry by the Trump administration and Republicans in Congress. President Donald Trump’s One Big Beautiful Bill Act terminates key tax incentives that have supported the growth of wind and solar projects in the U.S.

Trump issued an executive order shortly after the legislation passed that called for Interior “to eliminate preferential treatment for wind and solar facilities compared to reliable, dispatchable energy sources,” a reference to coal, natural gas and nuclear power.

About 5% of solar projects and 1% of wind projects are located on federal land, according to ACP.

Environment

Lucid (LCID) shares surged +50%, so why did it announce a major reverse stock split?

Published

1 hour ago

July 17, 2025

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Lucid (LCID) shares surged +50%, so why did it announce a major reverse stock split?

Lucid Motors’ (LCID) shares soared over 50% after the company secured a multi-hundred-million dollar investment from Uber to deploy robotaxis. So, why did Lucid just announce plans for a reverse stock split?

Why did Lucid announce a reverse stock split?

Lucid and Uber announced a new alliance on Thursday to deploy 20,000 electric robotaxis over the next six years.

The new robotaxi service, set to launch next year, will combine Lucid’s advanced software-defined EV platform with Nuro’s Level 4 self-driving tech.

As part of the new alliance, Uber plans to make “multi-hundred-million-dollar investments” in Lucid and Nuro. The first autonomous prototype is already in operation on a closed track at Nuro’s facility in Las Vegas.

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Lucid’s interim CEO, Marc Winterhoff, said, “This investment from Uber further validates Lucid’s fully redundant zonal architecture and highly capable platform as ideal for autonomous vehicles.” Winteroff claimed that the new alliance “is the start of our path to extend our innovation and technology leadership into this multi-trillion-dollar market.”

Lucid-Uber-EV-robotaxi — Lucid Gravity SUV fitted with Nuro’s self-driving tech (Source: Lucid)

The Lucid Gravity boasts an impressive EPA-estimated range of 450 miles. Its electric sedan, the Lucid Air, just broke a Guinness World Record after traveling 749 miles (1,205 km) on a single charge.

Lucid’s partnership with Uber sent share prices surging over 50% during trading hours on Thursday. In a separate filing with the SEC today, Lucid announced plans to initiate a 1-for-10 reverse stock split.

The split won’t affect shareholder ownership, except in cases where fractional shares are created. In that case, shareholders will receive a cash payment.

Lucid said it believes the reverse stock split “will allow the company’s common stock to be more attractive to a broader range of investors and other market participants.”

Lucid-stock-uber-robotaxi — Lucid Gravity Grand Touring in Aurora Green (Source: Lucid)

A vote of confidence

During an interview with Bloomberg on Thursday, Winterhoff explained that a portion of the $300 million investment from Uber will be used to develop the self-driving tech with Nuro. Winterhoff added that Lucid’s surging share price was “a vote of confidence.”

According to Winterhoff, the reverse stock split is not due to Lucid’s fear of being delisted, but rather to attract larger investors.

It was also more of a “technical” strategy to reduce volatility and help Lucid participate in the broader stock market.

Many institutional investors avoid stocks priced below $5 due to the higher risk and price swings. The proposed stock split still requires shareholder approval, which will be voted on at an upcoming special stockholders’ meeting.

After that, Lucid’s Board of Directors will determine whether it’s still in the best interest of the company and its stockholders to proceed.

Lucid’s stock rose over 36% on Thursday, closing at $3.12 per share. Although shares of LCID are up just slightly (+2%), they are now up year-to-date. However, they are still down 18% over the past year and nearly 95% from their all-time high of over $58 a share in February 2021.

Last week, after meeting with Lucid’s CFO, Taoufiq Boussaid, Benchmark analyst Mickey Legg set a target share price of $5.00, which was subsequently raised to $7.00 following the announcement of the Uber partnership.

Legg wrote a note to investors, “After meeting with LCID’s CFO Taoufiq Boussaid on Tuesday and reviewing 2Q production and deliveries, we remain confident in the company’s path to scale.”

Lucid-midsize-EV — Lucid midsize electric SUV teaser image (Source: Lucid)

Lucid delivered a record 3,309 vehicles in Q2, its seventh straight quarter with higher deliveries. The company aims to produce 20,000 vehicles this year, more than double the roughly 9,000 it made in 2024.

After ending the first quarter with $5.76 billion in liquidity, Lucid said that it has sufficient funding to last until the second half of 2026, when it plans to launch its more affordable midsize EV platform. The first two models will be a midsize SUV and sedan, starting at about $50,000.

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Environment

Wawa is getting ultra-fast EV chargers from IONNA

Published

2 hours ago

July 17, 2025

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Wawa is getting ultra-fast EV chargers from IONNA

IONNA, the EV charging joint venture backed by eight automakers – BMW, General Motors, Honda, Hyundai, Kia, Mercedes-Benz, Stellantis, and Toyota – just announced its biggest charging deal yet. It’s teaming up with convenience store favorite Wawa to roll out ultra-fast EV chargers at locations across the US.

The first site opens next week at Wawa’s W. International Speedway in Daytona Beach, Florida. More Rechargeries (yup, that’s what IONNA calls them) are already under construction in Bradenton, Pensacola, and Orlando. The partnership will be a big boost to both IONNA’s national charging goals and Wawa’s growing EV infrastructure.

The Daytona Beach Wawa will feature IONNA’s blue-and-orange 400kW Genuine Charge Dispensers, canopy coverage, car care essentials, and, of course, access to Wawa’s refreshments and restrooms.

“Next week’s opening of the IONNA Rechargery at Wawa in Daytona Beach will bring our total bay count to 212 live and 3,064 contracted. That is over 10% contracted to our 2030 live bay goal in just over a year,” said IONNA CEO Seth Cutler.

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Wawa’s chief fuel officer, Rich Makin, added, “With an ongoing commitment to providing our customers with speed and convenience, our new collaboration with IONNA does just that.”

IONNA aims to install 30,000 fast charging bays across North America by 2030.

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