Simon Brown: I’m chatting with Tracy Davis, the executive director of Just Shares. Tracy, I appreciate the morning time as always. We received the AGM of Thungela Resources later today; We got the Exxaro AGM tomorrow. Just reading the notes that you and your team have kept from the share, I would like to say that none of them are taking climate change seriously.
Tracy Davis: Morning, Simon. I think this is a fairly accurate assessment. Yes, absolutely. We are shocked at the kind of misleading statements these companies are making about their impact. But of course the fossil fuel industry is on the way back, with coal, oil and gas prices as high as they are. The high cost of coal does not seem to have changed climate science, it seems to have given these companies a kind of new lease on life in terms of future benefits and allowing coal wonders to continue forever, which is crazy.
So we’re looking at companies and analysts and commentators who are really bullish and goofy about coal. At the same time, we look at the catastrophic floods that are happening in KZN.
There is an extraordinary level of cognitive inconsistency going on here.
Simon Brown: Yeah Al that sounds pretty crap to me, Looks like BT aint for me either, Looks like BT aint for me either, Looks like BT aint for me either.
– Tracy Davis (TBakerDavies) May 5, 2022
Out of respect for the companies, we’re not asking them to shut down tomorrow, it’s not a plan. But we’ve got some things that they can start putting in place. They can become realistic about the future and start the right policy. And yet they do not. It seems to me frankly irresponsible.
Tracy Davis: I agree. You are absolutely right. While such threats are something that is banned by fossil fuel companies and, let’s be honest, our politicians regularly say, we can’t shut down all coal-fired power plants tomorrow. No, no one is advising you to do this from afar. But if you are serious about climate science, that means you have a credible plan to stop coal production. And at the moment Exxaro looks set to mine coal beyond 2050, expanding its existing mines beyond its existing mines, and Thungela has plans to open new coal mines in 2022. There is no question that it is irresponsible from the climate – The perspective of science.
Simon Brown: I’m not sure if you have an answer to this, perhaps. But is it unique to us in South Africa or, with this rising cost of commodity prices, these mining companies around the world have almost got their shocks back.
Tracy Davis: That’s such a good way of putting it. No, of course it is not unique to us. I think you see it more intensely in the rest of the world, I think around oil and gas, because coal is really on the way out – of course in most developing worlds – if not already out there.
I think what makes it interesting in South Africa is that it shows, to the extent that there was a huge recognition in the financial sector that coal was going out in South Africa, it was probably driven by the fact that there was not much of a heluva [more] It has to make more money than climate science. So now that we can see that the price of coal is at an all time record high, there is all sorts of talk about a sudden expansion and new coal.
It really demonstrates the emptiness of the many kinds of ESG discussions we’ve seen over the last few years when it comes to coal, where all the major asset managers happily acknowledged the fact that coal needs to be done quickly and urgently. We will be hurt if we want to reach the goal of the Paris Agreement. Now there is no such thing.
Simon Brown: Yeah Al that sounds pretty crap to me, Looks like BT aint for me either. I appreciate the profit, but I think we only got one planet and that is probably more important.
We’ll leave it there. Tracy Davis, executive director of Just Shares. As always I appreciate the insight.