Thanks for replying. You’ve correctly understood most of my idea of where fossil fuel investing’s choke points aren’t. Not understanding the nuances of how this system works will yield only this sequence: ready, fire, aim. You could argue with my “virtue signaling” label for this. But the resulting distraction is the same, whatever the term used.

Individual investors acting only as individuals have zero influence. Institutions like Black Rock, Vanguard and Bridgewater (Ray Dalio’s hedge fund with $160bn AUM) in a position to influence index providers and large fund groups worry only about big money clients like TIAA, CALPERS, pension and sovereign wealth funds and university endowments. Individuals are weightless unless they coalesce into a group like r/WallStreetBets to counter the weight of hedge funds. There is big money on your side, as I’ll show below. But it’s motivated only by making money.

With oil at $87 and natural gas at $13/BTU in Asia and $50/BTU in Europe starving fossil fuel companies of cash won’t happen. Smart money investors imposing capital discipline on them means they won’t issue shares to finance growth, like they did during the boom years from 2005–2015. Businesses gushing cash can’t be starved. The system’s choke points are elsewhere. The Dutch court that told RDS to lower its carbon emissions by 45% and activist hedge fund Third Point’s RDS position is showing you where they are:

1. Securities law litigation that forces them to incorporate measurable climate liability risk into their financial reporting. RDS redomiciled from NL to the UK to avoid compliance with the Dutch court ruling.
2. Strip away the clean energy greenwashing fig leaf from them by breaking them up. Dan Loeb’s Third Point bought $500-$1bn in RDS to push it to break up into its fossil fuel and other parts. https://www.cnbc.com/video/2021/10/27/third-point-buys-stake-in-royal-dutch-shell.html

“Third Point, which is led by Daniel Loeb, urged Shell to split itself into “multiple standalone companies”, including a “legacy” arm focused on oil and gas that could “slow capex beyond what it has already promised”. Its stake is worth close to $750m, according to a source familiar with the matter. The move by the New York hedge fund comes less than six months after a court in The Hague ordered the Anglo-Dutch company to speed up plans to cut greenhouse gas emissions. It also follows a successful activist campaign run by the hedge fund Engine No 1 against Shell’s US rival ExxonMobil. In a letter to shareholders seen by the Financial Times, Third Point said Shell had “too many competing stakeholders pushing it in too many different directions, resulting in an incoherent, conflicting set of strategies attempting to appease multiple interests but satisfying none”. While Shell’s legacy business could handle fossil fuels, Third Point said, a separate entity should focus on cleaner energy, to “combine modest cash returns with aggressive investment in renewables and carbon reduction technologies”. (FT, 10/27/2021)

If your institution invests through TIAA-CREF, you and likeminded members can push their fund managers to align with Third Point-type strategies and adopt ESG rules that incorporate the Dutch court ruling, push for investee companies to adopt net zero targets that include not just production and operations but emissions from products sold.

I’m reluctant to give advice. I could easily be accused of hypocritical virtue signaling to myself since I avoid owning pipeline (EPD, MMP) and Canadian oil shares (VET, CNQ, CVE) and make money by selling below the money puts or buying calls on them. That said, remember two points:

1. Individually, you’re weightless and impotent.
2. In a community of like-minded investors you acquire power and influence either through the institutions you’re all a part of or by following the r/WSB-Gamestop meme-ification model.

Feel free to write back with questions.