Podcasts > Money Rehab with Nicole Lapin > "Should I Stop Investing In Oil Even Though It Makes Me Money?"

"Should I Stop Investing In Oil Even Though It Makes Me Money?"

By Money News Network

In this episode of Money Rehab with Nicole Lapin, the discussion explores the current landscape of energy investments, focusing on the performance of fossil fuel companies compared to fossil-fuel-free alternatives. Lapin examines how traditional oil companies like Chevron and Exxon have performed over the past five years, while also highlighting the success of ESG funds that exclude these companies from their portfolios.

The episode delves into factors shaping the future of energy investments, including the growing renewable energy sector, government policies affecting the energy transition, and the role of ESG investing in transforming the investment landscape. Lapin breaks down specific investment options like ESGV and ESGU funds, and explains how political decisions at both federal and state levels influence the pace of change in the energy sector.

"Should I Stop Investing In Oil Even Though It Makes Me Money?"

This is a preview of the Shortform summary of the Jul 21, 2025 episode of the Money Rehab with Nicole Lapin

Sign up for Shortform to access the whole episode summary along with additional materials like counterarguments and context.

"Should I Stop Investing In Oil Even Though It Makes Me Money?"

1-Page Summary

Fossil Fuels Industry: Current State and Future Outlook

The fossil fuel industry is experiencing strong returns, with Chevron and Exxon stocks up by approximately 25% over the last five years. However, Nicole Lapin points out that ESGV, a fossil-fuel-free fund, has outperformed these companies with a 54% increase during the same period. Despite the industry's current success, scientists warn that significant reductions in fossil fuel use by 2030 are necessary to prevent catastrophic climate consequences.

The Growth and Potential of Renewable Energy Sources

Renewable energy sources, including solar, wind, hydropower, and geothermal, are gaining momentum in the fight against climate change. Government tax breaks are helping these companies attract investors and improve their competitive position. Electric vehicles (EVs) are emerging as another crucial element in reducing fossil fuel dependence, though their future success depends on overcoming various policy and implementation challenges.

ESG Investing's Implications for the Energy Sector

ESG investing is transforming the investment landscape by considering both financial returns and broader environmental impact. While some companies like Chevron may inflate their ESG scores, third-party sources such as Behrens and Calvert Research provide more reliable assessments. Lapin recommends investing in ESG funds like ESGV and ESGU, which exclude fossil fuel companies while offering competitive returns. ESGU, for instance, has matched the S&P 500's performance with a 57% increase over five years.

Impact of Government Policies on Energy Transition

The pace of energy transition is heavily influenced by political leadership, with Democratic administrations typically supporting renewable energy initiatives and Republicans favoring fossil fuels. While many countries have implemented policies promoting EV adoption, some decisions, such as Florida's rejection of an EV bill, demonstrate how government actions can impede the transition to clean energy.

1-Page Summary

Additional Materials

Clarifications

  • ESGV is an exchange-traded fund (ETF) that focuses on companies with strong environmental, social, and governance (ESG) practices while excluding fossil fuel companies. This fund has shown better performance compared to traditional fossil fuel companies like Chevron and Exxon, indicating that investing in companies with sustainable practices can yield competitive returns. The success of ESGV highlights the growing interest in socially responsible investing and the potential financial benefits of aligning investments with ESG principles. This trend reflects a shift towards more sustainable and ethical investment strategies in the financial markets.
  • ESG investing stands for Environmental, Social, and Governance investing, which considers a company's impact in these areas alongside financial performance. In the energy sector, ESG investing evaluates how companies manage environmental risks, treat their employees, and uphold ethical standards. Investors increasingly use ESG criteria to make decisions, favoring companies with strong sustainability practices. ESG funds exclude companies that do not meet these criteria, such as fossil fuel companies, while aiming to deliver competitive returns.
  • Behrens and Calvert Research are reputable third-party organizations that specialize in evaluating companies based on their environmental, social, and governance (ESG) practices. These assessments help investors make informed decisions by providing insights into how well companies are managing ESG risks and opportunities. By relying on these independent assessments, investors can have more confidence in the ESG performance of the companies they choose to invest in. Behrens and Calvert Research play a crucial role in promoting transparency and accountability in the realm of ESG investing.
  • ESG funds, which stand for Environmental, Social, and Governance funds, focus on investing in companies that meet certain ethical and sustainability criteria. ESGV and ESGU are specific ESG funds that prioritize excluding fossil fuel companies from their investment portfolios. Despite excluding these companies, ESG funds aim to provide competitive financial returns to investors. This approach aligns with the growing investor interest in socially responsible investing and sustainability.

Counterarguments

  • While ESGV has outperformed some fossil fuel companies, past performance is not always indicative of future results, and the fossil fuel industry's infrastructure and market penetration give it resilience.
  • The necessity of significant reductions in fossil fuel use by 2030 is based on scientific consensus, but there are differing opinions on the feasibility and economic implications of achieving these reductions.
  • Renewable energy is gaining momentum, but intermittency issues and current technological limitations may affect the reliability and scalability of these energy sources.
  • Government tax breaks for renewable energy can attract investors, but they may also distort markets and potentially lead to inefficiencies or over-reliance on subsidies.
  • Electric vehicles are important for reducing fossil fuel dependence, but their environmental impact is not negligible, considering battery production and electricity generation may still rely on fossil fuels.
  • ESG investing does consider broader impacts, but there is debate over the effectiveness of ESG criteria and whether they truly lead to positive environmental outcomes or are sometimes used for greenwashing.
  • Third-party ESG assessments are seen as more reliable, but the methodologies and criteria used can vary significantly, leading to inconsistent and sometimes subjective ratings.
  • ESG funds exclude fossil fuel companies, but this exclusion does not necessarily lead to a reduction in global fossil fuel consumption and may simply shift ownership of these assets.
  • Government policies do influence the energy transition, but the complexity of energy markets means that policies are not the only drivers of change, and market forces can also play a significant role.
  • The support of renewable energy initiatives or fossil fuels by political parties can be more nuanced than a simple dichotomy, with some members within each party holding different views.
  • Government actions like Florida's rejection of an EV bill may impede the transition to clean energy, but they may also reflect legitimate concerns about the readiness of infrastructure, technology, or the broader impact on the economy and society.

Get access to the context and additional materials

So you can understand the full picture and form your own opinion.
Get access for free
"Should I Stop Investing In Oil Even Though It Makes Me Money?"

Fossil Fuels Industry: Current State and Future Outlook

The fossil fuel industry currently enjoys strong returns, but its future is clouded by the global shift toward decarbonization and renewable energy.

Chevron and Exxon Stocks Up 25%, Strong Returns For Fossil Fuel Firms

Over the last five years, the fossil fuel industry has seen substantial returns, with Chevron’s stock climbing almost 25% and Exxon's stock exceeding a 25% increase. However, Nicole Lapin points out that in comparison, ESGV, a fund that excludes fossil fuel companies, is up 54% over the same period. This contrast highlights the growing financial appeal of sustainable investment options.

In the past year, energy companies, mostly from the oil and gas sector, have dominated the list of top 20 stocks in the S&P 500.

Fossil Fuel Industry's Viability Threatened by Decarbonization and Transition to Renewables

Despite these financial gains, scientists warn that humanity must significantly reduce its dependence on fossil fuels by 2030 to avoid catastrophic climate consequences. This timeframe puts pressure on the long-term viability of the industry as the world moves toward decarbonization and renewable energy sources.

Fossil Fuels Vital for Short-Term Energy Demand Despite Covid-19 Disruption

The fossil fuel industry has proven resilient even in the f ...

Here’s what you’ll find in our full summary

Registered users get access to the Full Podcast Summary and Additional Materials. It’s easy and free!
Start your free trial today

Fossil Fuels Industry: Current State and Future Outlook

Additional Materials

Clarifications

  • ESGV is an acronym for "Environmental, Social, and Governance" and represents a fund that excludes investments in fossil fuel companies. It is designed for investors looking to align their investments with sustainable and ethical practices, focusing on companies that prioritize ESG criteria in their operations. The mention of ESGV in the text highlights the outperformance of sustainable investment options compared to traditional fossil fuel investments over a specific period. This contrast underscores the increasing financial attractiveness and market interest in ESG-focused investment strategies.
  • The S&P 500 is a stock market index that tracks the performance of 500 large companies listed on stock exchanges in the United States. Energy companies, including those in the fossil fuel industry, are a significant component of the S&P 500 index. The performance of energy companies in the S&P 500 can provide insights into the overall health and trends within the fossil fuel industry. Tracking energy companies in the S&P 500 can help investors gauge the financial performance and market sentiment towards the fossil fuel sector.
  • Decarbonization is the process of reducing carbon dioxide emissions to combat climate change. It involves shifting away from fossil fuels towards cleaner, renewable energy sources like solar and wind power. This transition is crucial to limit global warming and its associated environmental impacts. Governments and industries worldwide are increasingly focusing on decarbonization efforts to create a more sustainable future.
  • The long-term viability of the fossil fuel industry is uncertain due to the global push for decarbonization and renewable energy sources. This transition poses a challenge to the industry's sustainability as it faces pressure to reduce its environmental impact. The industry's future hinges on how effectively ...

Counterarguments

  • While Chevron and Exxon stocks have increased, this may not fully account for the volatility of the market and the potential for future downturns due to policy changes or market dynamics.
  • The performance of ESGV could be attributed to a current market trend favoring sustainable investments, which may not be sustainable in the long term.
  • The prominence of energy companies in the S&P 500 could reflect current economic conditions that favor traditional energy sources, which could change as alternative energy technologies become more cost-competitive.
  • The urgency suggested by scientists to reduce fossil fuel dependence may not account for the potential development of new technologies that could mitigate the environmental impact of fossil fuels.
  • The resilience of the fossil fuel industry during COVID-19 may not necessarily indicate its future stability in the face of ongoing and potentially more severe disruptions.
  • P ...

Get access to the context and additional materials

So you can understand the full picture and form your own opinion.
Get access for free
"Should I Stop Investing In Oil Even Though It Makes Me Money?"

The Growth and Potential of Renewable Energy Sources

Renewable energy sources are currently at the forefront of discussions on mitigating climate change due to their reduced environmental impact and potential to replace fossil fuels.

Renewable Sources Mitigating Climate Change and Reducing Environmental Impact

Renewable and clean energy sources, including solar, wind, hydropower, and geothermal, have garnered attention for their roles in addressing climate change. These sources promise to lower the environmental impact of energy generation.

Tax Breaks Help Renewable Energy Companies Attract Investors and Perform Better

Governments are providing incentives to bolster the green energy market. Tax breaks offered to renewable energy companies are critical in helping these businesses attract investors, thereby performing better financially and becoming more competitive in the energy sector.

EV Adoption Reduces Fossil Fuel Dependence and Emissions

Electric vehicles (EVs) are another key element in the shift away from reliance on fossil fuels. EVs are recognize ...

Here’s what you’ll find in our full summary

Registered users get access to the Full Podcast Summary and Additional Materials. It’s easy and free!
Start your free trial today

The Growth and Potential of Renewable Energy Sources

Additional Materials

Counterarguments

  • While renewable energy sources are less polluting than fossil fuels, they still have environmental impacts, such as land use for wind farms or solar panels, and the potential ecological effects of hydropower dams.
  • The intermittency of solar and wind power can pose challenges to grid stability and requires investment in energy storage or backup systems to ensure a reliable power supply.
  • Tax breaks for renewable energy can be seen as market distortions, potentially leading to inefficiencies or the misallocation of resources if not carefully designed.
  • The production and disposal of EV batteries raise environmental concerns, including the mining of rare earth metals and the challenges of battery recycling.
  • EVs may not significantly reduce emissions if the electricity used to charge them is generated from fossil fuels.
  • The transition to EVs and renewable energy may have economic impacts, such as job losses in traditional energy sectors, which need to be managed through policy and retrai ...

Actionables

  • You can support renewable energy growth by switching to a green energy provider for your home or business. Many utility companies offer options to purchase electricity from renewable sources. By opting into these programs, you contribute to the demand for clean energy, which can lead to more investment and development in the sector.
  • Consider investing in a portable solar charger for your personal electronics. This small step not only reduces your reliance on fossil fuels but also familiarizes you with solar technology. As you use it, you become a walking advocate for renewable energy, potentially influencing others to make similar choices.
  • Engage in informed conversa ...

Get access to the context and additional materials

So you can understand the full picture and form your own opinion.
Get access for free
"Should I Stop Investing In Oil Even Though It Makes Me Money?"

ESG Investing's Implications for the Energy Sector

ESG investing is reshaping the investment landscape with its focus on environmental, social, and governance factors, creating implications for the traditional energy sector, particularly companies involved in fossil fuels.

ESG Investing: Beyond Financial Returns, Impact on World

ESG investing takes into account both financial returns and the broader impact of a company on the world. Investors who adopt this strategy look for businesses that operate sustainably, emphasize stakeholder interests, and adhere to robust governance principles. These investors seek companies that are environmentally conscious, socially responsible, and governed in a manner that is sustainable and ethical.

Some Companies, Like Chevron, May Inflate ESG Scores; Reliable Ratings Come From Behrens and Calvert Research

The importance of verified ESG scores is highlighted by the potential for companies to exaggerate their ESG credentials. For example, Chevron reported itself as having a high ESG score of nearly 70, which casts doubt on self-reported scores. To combat this issue, third-party sources like Behrens, in collaboration with Calvert Research and Management, provide more reliable assessments. They have compiled a list of 100 companies demonstrating strong ESG qualities, offering a more trustworthy measure of a company's actual ESG performance.

Invest In ESG Funds Like ESGV, ESGU for Potential Market-Aligned or Superior Returns

For investors looking to align their investments with ESG principles, there are specific funds that cater to these values. ESGV and ESGU are examples of funds that not only exclude companies generating revenue from producing or selling fossil fuels but also offer potential market-aligned or superior returns.

ESGV tracks large corporations while omitting those involved in producing or s ...

Here’s what you’ll find in our full summary

Registered users get access to the Full Podcast Summary and Additional Materials. It’s easy and free!
Start your free trial today

ESG Investing's Implications for the Energy Sector

Additional Materials

Counterarguments

  • ESG metrics can be subjective and may not always align with all stakeholders' values.
  • The exclusion of fossil fuel companies from ESG funds may oversimplify the complexity of transitioning to a sustainable economy.
  • ESG funds may still have indirect exposure to fossil fuels through companies that use or are otherwise dependent on fossil fuels.
  • The performance of ESG funds can be cyclical and may not always outperform traditional funds.
  • ESG investing may lead to divestment from sectors that could use capital to transition to cleaner technologies.
  • Third-party ESG ratings can vary significantly, and their methodologies may not be transparent.
  • ESG investing does not necessarily lead to direct positive ...

Actionables

  • You can start a monthly ESG investment club with friends to share insights and support each other in making informed decisions. Gather a group interested in sustainable investing, meet regularly to discuss potential investments, and use collective knowledge to analyze ESG scores and company impacts that aren't covered in mainstream assessments. This could lead to discovering lesser-known but high-impact investment opportunities.
  • Create a personal "impact portfolio" tracker using a spreadsheet to monitor how your investments align with your values. Include columns for ESG scores, the nature of the company's business, and any news on their practices, allowing you to see at a glance if your portfolio matches your commitment to social responsibility. This hands-on approach ensures you're not passively relying on fund names or reputations.
  • Volunteer to write or con ...

Get access to the context and additional materials

So you can understand the full picture and form your own opinion.
Get access for free
"Should I Stop Investing In Oil Even Though It Makes Me Money?"

Impact of Government Policies on Energy Transition

Government policies play a pivotal role in shaping the pace and direction of the energy transition from fossil fuels to renewable energy sources.

Democrats Back Renewables; Republicans Favor Fossil Fuels

Influence on Energy Transition Pace and Direction

Historically, Democratic administrations have shown stronger support for renewable energy initiatives, whereas Republican leadership tends to back the fossil fuel industry. The current political landscape suggests that the transition to renewable energy may be impeded with a Republican majority in office. When compared to periods when Democrats, who are generally more supportive of renewable energy policies, are in power, the shift towards green energy is more vigorous and rapid.

Incentives and Policies Promote Renewables and Electric Vehicles

Countries, including the US, have instituted a variety of policies and incentives to advocate the adoption of electric vehicles (EVs). These measures often include financial incentives to lower the cost barrier for consumers and the advancement of charging infrastructure to alleviate range anxiety concerns for EV owners.

Policy Decisions Like Florida's Rejection of Ev Bill Hinder Trans ...

Here’s what you’ll find in our full summary

Registered users get access to the Full Podcast Summary and Additional Materials. It’s easy and free!
Start your free trial today

Impact of Government Policies on Energy Transition

Additional Materials

Counterarguments

  • While Democratic administrations may prioritize renewable energy, it's not always the case that Republican administrations universally oppose it; some Republicans may support renewable energy through market-based approaches or innovation-driven policies.
  • The energy transition is influenced by a complex array of factors beyond political leadership, including market forces, technological advancements, and international agreements.
  • The assertion that a Republican majority inherently impedes renewable energy progress may overlook instances where bipartisan support has been achieved for certain energy initiatives.
  • The effectiveness of incentives and policies to promote EVs can vary, and some argue that market forces should drive adoption rather than government intervention.
  • Financial incentives for EVs may disproportionately benefit wealthier individuals who can afford new technology, raising questions about the equity of such policies.
  • The advancement of charging infrastructure is important, but there are also concerns about ...

Actionables

  • You can influence energy policy by writing to your local representatives to express your support for renewable energy initiatives. Explain in your letter how transitioning to green energy aligns with your values and the long-term benefits you see for the community. For example, you might highlight the potential for job creation in the renewable sector or the health benefits of reduced pollution.
  • Consider switching to an electric vehicle (EV) or a hybrid as your next car purchase to personally contribute to the demand for clean energy. Research the incentives available in your area, such as tax credits or rebates, and calculate the long-term savings on fuel and maintenance compared to traditional vehicles. Share your findings and experience with friends and family to encourage them to make similar choices.
  • Engage with ...

Get access to the context and additional materials

So you can understand the full picture and form your own opinion.
Get access for free

Create Summaries for anything on the web

Download the Shortform Chrome extension for your browser

Shortform Extension CTA