Wall Street investors make surprising moves despite major headwinds: 'These are not small adjustments'

Investor sentiment on fossil fuels has been souring, according to Corporate Knights.

For example, renewable energy exchange-traded funds have recently been doing better than their fossil fuel counterparts. The XOP oil and gas exploration ETF is down 2% this year, while the iShares Global Clean Energy ETF is up 19%. This is a big swing considering that over the last five years, XOP was up 22.9% and the renewables ETF was down 0.2%. 

Meanwhile, investors have taken to short-selling fossil fuels more frequently than before, betting that oil and gas stocks will drop in value. Bloomberg found that in seven out of nine months this year, most hedge funds have taken short positions on oil companies. By comparison, only 3% of hedge funds are shorting solar companies. 

Financing for the oil and gas industry has taken a downturn as well.

"Morgan Stanley reduced its fossil fuel lending by more than half. JPMorgan Chase cut by about 7%. Wells Fargo, still the largest fossil lender this year, provided $19.1 billion, down 17% from last year. These are not small adjustments," business strategist Michael Barnard wrote for CleanTechnica. "They are meaningful changes in how capital is being allocated, and they are happening in the face of an administration that is telling the same banks to keep the money flowing." 

Pension funds are similarly divesting from fossil fuels and doubling down on renewables. Norway's pension fund has cut its holdings of Shell and Exxon stock, while Québec's acquired a wind, hydro, and solar company, Innergex, for $10 billion.

Other assessments show that fossil fuel investments are down and renewable ones are up. 

Besides being an unsound investment vehicle, fossil fuels such as oil, gas, and coal are the primary cause of increasingly destructive weather patterns. The emissions created by their production, transportation, and use trap heat in the atmosphere and exacerbate floods and droughts. These disasters, in turn, cause a sharp increase in housing and agricultural costs, never mind the humanitarian crises that follow. 

Investor sentiment on fossil fuels has been souring, according to Corporate Knights.

For example, renewable energy exchange-traded funds have recently been doing better than their fossil fuel counterparts. The XOP oil and gas exploration ETF is down 2% this year, while the iShares Global Clean Energy ETF is up 19%. This is a big swing considering that over the last five years, XOP was up 22.9% and the renewables ETF was down 0.2%. 

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Meanwhile, investors have taken to short-selling fossil fuels more frequently than before, betting that oil and gas stocks will drop in value. Bloomberg found that in seven out of nine months this year, most hedge funds have taken short positions on oil companies. By comparison, only 3% of hedge funds are shorting solar companies. 

Financing for the oil and gas industry has taken a downturn as well.

"Morgan Stanley reduced its fossil fuel lending by more than half. JPMorgan Chase cut by about 7%. Wells Fargo, still the largest fossil lender this year, provided $19.1 billion, down 17% from last year. These are not small adjustments," business strategist Michael Barnard wrote for CleanTechnica. "They are meaningful changes in how capital is being allocated, and they are happening in the face of an administration that is telling the same banks to keep the money flowing." 

Pension funds are similarly divesting from fossil fuels and doubling down on renewables. Norway's pension fund has cut its holdings of Shell and Exxon stock, while Québec's acquired a wind, hydro, and solar company, Innergex, for $10 billion.

Other assessments show that fossil fuel investments are down and renewable ones are up. 

Besides being an unsound investment vehicle, fossil fuels such as oil, gas, and coal are the primary cause of increasingly destructive weather patterns. The emissions created by their production, transportation, and use trap heat in the atmosphere and exacerbate floods and droughts. These disasters, in turn, cause a sharp increase in housing and agricultural costs, never mind the humanitarian crises that follow. 

The financial trend is happening despite the direction of political winds, some analysts say. 
"Wall Street is ignoring [U.S. President Donald] Trump not out of ideology but out of calculation. Banks are reading the market, listening to investors, and planning for a world where fossil fuels are no longer the safest bet," Barnard said.

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