Divestment movement doesn’t affect actual investment decisions

IPAA says divestment movement is “just a media campaign”

The head of independent American oil and gas producers says the much touted divestment movement from fossil fuels has no measurable impact on actual investors, according to a new survey.

Divestment movement not a serious threat to energy investments in oil and natural gas.

New research commissioned by the Independent Petroleum Association of America (IPAA) and released at IPAA’s annual Oil & Gas Investment Symposium in New York this week finds that the divestment movement, formally in place now for three years, has had virtually no impact on the way the vast majority of serious investors and analysts view and/or value firms in the energy sector, and particularly those in the oil and gas space.

“With all the talk recently about divestment campaigns, we thought it might be interesting to ask the actual targets of these campaigns what they thought of them,” said Jeff Eshelman, senior vice president for operations and public affairs at IPAA.

Among the survey’s key findings, greater than nine out of 10 respondents identified the energy sector as being “inextricably linked” to other major sectors of both the global and U.S. economies, with nearly 80 percent agreeing that the inclusion of fossil-fuel related investments is an “essential element” of having a “balanced, diversified portfolio.”

Additionally, nearly nine out of 10 respondents indicated that increased advocacy by divestment proponents has neither impacted their view on the issue, nor increased the likelihood that fossil-fuel related securities will be divested from portfolios they manage and/or control in the future.

Over 90% of serious investors see oil and gas as part of a balanced portfolio.

“I think we assumed going in that most serious investors wouldn’t be following them, wouldn’t be interested in them, and certainly aren’t being influenced by them, but even we were surprised to see how lopsided the findings were,” said Eshelman. “Basically, this whole thing is almost entirely a media campaign, not an effort to engage real investors with real arguments.”

Conducted in late-March by FTI Consulting, Inc., a global, publicly traded research firm and consultancy, the survey captures the perspectives of 324 professionals representing a diverse segment of the institutional investment community, including traditional investment managers and hedge funds, pension funds and endowment managers, as well as investment banks.

The buy-side sample of 245 (i.e., non-investment banks) represents in total roughly $4.2 trillion in equity assets under management. Practitioners from several of the largest and highest-profile investment firms and institutional funds participated in the survey, among them: Fidelity Investments, T. Rowe Price, Blackrock, JP Morgan Chase, CalPERS, TIAA-CREF, Neuberger Berman, and Invesco. The survey was conducted independently by FTI, with no outside direction or guidance provided by IPAA at any point during the project’s design, execution or reporting phases.