While I occasionally disagree with Tisha, I always enjoy her perspective on ESG and the energy future so this week, after a two year (or 14 day, depending on how you feel about the curve flattening), I welcome Tisha back to the podcast.

Here is a recent post of hers.

The Pendulum Train

I’m working on my next book, so occasionally I’m going to share my thinking here and on the Energy Thinks podcast to give you a preview and get your thoughts.

Ever since Russia invaded Ukraine, many energy observers have predicted that the renewed global focus on energy security means the global focus on climate change is over. My view is very different: I look at this moment as an opportunity for oil and gas leadership to respond to a range of social and financial pressures for cleaner energy — pressures that will only intensify. (We reviewed this dynamic in a recent Both True, The World’s Cleanest Oil & Gas on Stage.)

But while I disagree with those many energy observers on how to respond to this moment, we share at least this judgment: Politics moves like a pendulum. Below, I explore why I believe in and value the political pendulum swing — and also why I don’t think that this moment represents the end of the public focus on climate. Concern about climate isn’t a pendulum. It’s a train — and it’s not coming back.

A Pendulum or Directional Change?

Many reasonable people can (but don’t) agree that the energy-environmental pendulum has swung too far in the address-climate-at-all-costs direction. I certainly do. In a world with a lot of global challenges and priorities, the climate-apocalypse narrative certainly doesn’t work for all of us — not even a climate hawk like me.

Yet that doesn’t mean that the pendulum will swing back to some pre-2020 world.

Four significant but underrecognized structural changes over the past decade or so indicate that global interest in prioritizing climate is directional. So while we are experiencing a pendulum “correction,” we shouldn’t mistake pendulum corrections for directional change. The pendulum is on a train, and that train is going to climate town.

Below are those four structural changes, which are themselves directional. They are and will continue to drive directional change in public interest in climate:

Investor pressure. Now that everyone from BlackRock CEO Larry Fink to U.S. Treasury Secretary Janet Yellen to the Securities and Exchange Commission (SEC) has equated climate risk with financial risk, responsible investors must put climate considerations front and center. Recent SEC draft rules reinforce how central these analyses will be to company operations and disclosures.Public sentiment. As discussed in my Both True What to Watch for 2022: Energy Prices, stakeholders tend to interpret current events through their own political lenses. I sat on a panel last week where one participant said the war in Ukraine was accelerating Germany’s permitting of wind facilities and another pointed out that Germany is turning coal-fired power back on. Very few people are rewriting their climate priorities in the face of world events.Generational change. The oldest millennials are now turning 41 and continue to take leadership positions across finance, politics, community organizations, and business. They will dominate the population beyond 2050. Gen Z has now joined the millennials in the work force; together they will soon constitute a majority of working adults. Members of these generations, even when politically conservative, prioritize climate — and that is not going to change.Company recruiting and retention. For the foreseeable future, oil and gas companies will be competing to both recruit and retain millennial and Gen Z talent. And increasingly, millennial and  Gen Z candidates and employees are under pressure to be a part of the climate solution (or at least part of the industries of the future!). Ask them and they will tell you: They want to see th...