Apr 21, 2015 Major Investor Survey Finds No Interest in Divesting from Oil and Gas
First-of-its-kind independent survey commissioned by IPAA finds activist-led divestment efforts having “virtually no impact” on decisions of investment professionals
NEW YORK, N.Y. – Notwithstanding increased media exposure stemming from international campaigns by opponents of oil and gas to force investors to drop fossil-fuel related equities, new research commissioned by the Independent Petroleum Association of America (IPAA) and released today at IPAA’s annual Oil & Gas Investment Symposium in New York 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.
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. A copy of the final findings memo can be accessed here.
“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. “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. 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.
The survey results were released today as part of IPAA’s OGIS New York event, the 21st year of what is widely considered among the most important annual conferences for publicly traded independent E&P and service and supply companies. This year, more than 70 CEOs will present their company profiles to a record turnout of investors, bankers and analysts, with a pre-registration number of nearly 2,000 capital markets professionals. OGIS-New York is the centerpiece of IPAA’s annual investment symposia circuit, which also includes programs in Toronto, Florida, and San Francisco.
For more information on IPAA’s work on the divestment issue, please visit DivestmentFacts.com.
About the Independent Petroleum Association of America
The Independent Petroleum Association of America (IPAA) is the leading, national upstream trade association representing oil and natural gas producers that drill 95 percent of the nation’s oil and natural gas wells. These companies account for 54 percent of America’s oil production, 85 percent of its natural gas production, and support over 2.1 million American jobs.