Guess whose share prices are at, or close to, all-time highs?
Those evil mining companies, that’s who.
Shares in BHP Group Limited (LSE:BHP), Glencore PLC (LSE:GLEN) and Rio Tinto PLC (LSE:RIO), London’s holy trinity, are all at multi-year highs.
So, if the good times are rolling for the despoilers, does that put the lie on all the efforts of the ESG brigade?
Actually, it just might, because the share price strength is due at least in part to the very policies the ESG lobbyists are enacting or are campaigning for.
In particular, the energy prices that underpinned this week’s record dividend payout from BHP Group have been pushed up by extra costs dumped onto the consumer to pay for the greening of the global economy.
Put it another way – if you make it hard in the name of climate science for oil and gas companies to produce their product, then, in times of scarcity, prices for those commodities are going to go sky high. The effect is particularly marked at the current moment, in the midst of a northern hemisphere winter that follows two years of covid-related supply chain disruptions.
That’s just basic supply-demand economics, and the only to get around that is to impose price controls, which, as every historian knows, ends up leading to actual shortages.
In that sense, the ESG lobby have gone as far as they can go without actually cutting off or curtailing the energy supply to the West.
One way of distracting from this inconvenient truth is to accuse President Putin of playing politics with oil, and particularly gas pipelines, and to paint him as a global aggressor in what’s essentially a regional conflict.
But ask yourself too: is it a coincidence that those pressing hardest for lockdowns were also the same people who push for ESG?
And isn’t it ironic that when those policies bump into each other, the unintended consequences are bigger profits than ever for the miners?
Even so, BHP knows it has to make concessions.
Indeed, it can’t vest its coal interests fast enough.
They won’t be mothballed, of course. They’ll just find their way into the privately-held portfolio of some Middle Eastern prince or Far Eastern oligarch, and thus even further away from scrutiny. If that sort of outcome is to count as an ESG win, then the scoring really doesn’t make sense.
As to the positive future that’s reflected in those robust mining company share prices, there’s an ESG angle there too.
For the major miners, those despoilers of the earth, are now all about saving the planet.
This week, Rio Tinto put out a major announcement about a partnership with an Aboriginal group. It was a rare piece of on-the-money awareness from a company that has taken mis-step after mis-step, not just in ESG, but in terms of basic common decency, from which ESG, as a politicised term ought now to be distinguished.
But that’s just the crest of the ESG wave that the mining industry is now attempting to surf.
How long will the miners remain public enemy number one, a position they’ve taken over from Big Pharma, whose products suddenly seem so beloved of activists the world over?
The answer to that question depends on the future of the world.
Miners are now falling over themselves to describe how they will play the crucial role in delivering the materials that will be needed to create the green economy of the future - from electric vehicle batteries, to the copper wiring that will go into all the infrastructure that supports those vehicles, to the materials that get used in solar panels and wind turbines; and of course, to those precious devices which keep everybody simultaneously connected and divided, mobile phones.
READ: Glencore emerges with further backing for UK batterymaker Britishvolt
The miners are not wrong when they say they will be crucial to this process. That, too, is an inconvenient truth.
Whether or not the public relations war will be won or not is another question. It doesn’t hurt that President Biden occasionally holds up a copper mine, or activists in the UK protest against a coal development.
But protest the industry as a whole at your peril.
The world needs the miners, for growth, for technology, and for survival. And for now, at least, the market is only too aware of that fact.