Financial markets are now betting against the future of the planet. This won’t end well
There has been no fundamental readjustment of energy stock prices since the supposedly historic December 2015 United Nations Climate Change deal in Paris.
Imagine you’re a stock market investor or an analyst whose job it is to advise those investors. How do you put a value on the shares of a publicly listed oil company?
You can estimate the value of the skills of the company’s engineers, managers and other employees. There’s the brand, reputation and the culture of the company to factor in too. There’s also the worth of its equipment and various physical investments to consider.
Yet the bulk of the value of any oil company inevitably derives from its reserves of the black stuff (along with gas and coal) in the ground; assets that are expected to be extracted and sold over time.