Examining ESG #101 - The Net Zero Illusion: Models, Money, and the Slow March Back to Sanity

The ESG-climate-industrial complex took a bruising this week. From revelations of CO₂’s actual residence time (mere years, not centuries) to satellite evidence of Antarctic ice mass gain, the contradictions pile up. A new AI-reviewed paper demolishes the IPCC’s CO₂-driven warming models, showing instead a strong solar correlation. Meanwhile, the “Sea-Level Crisis” narrative loses credibility as Antarctica gains ice and flawed models are exposed. The investment world delivers its own verdict: the ESG bubble deflates, fund withdrawals spike, and even Wall Street retreats from Net Zero alliances. Yet absurdities persist, as activists now propose “health offsets” for your candy bars. Reality is asserting itself, one empirical fact at a time.

CHART OF THE WEEK

Our take: this table is from the first science article below (which is commentary on the actual study that was linked in post #100), and shows that despite a series of empirical, measurement-based studies showing the residence time of CO2 in the atmosphere is short (3 to 7 years) and natural sinks quickly absorb excess CO2, the IPCC has chosen to use a model-based study that produces results of over 100 years. This is just one more (although extreme) example of how climate alarmism relies on mathematical models that defy measurements of reality, and how science has become politicized.

SCIENCE

IPCC misrepresentations: comments made by former IPCC contributors after cutting ties with the politicized body — so scientists no longer subject to professional repercussions.

• IPCC scientist #26 - Dr Chris Landsea: “I cannot in good faith continue to contribute to a process that I view as both being motivated by pre-conceived agendas and being scientifically unsound.”

AI Titans Converge: A Seismic Shift in Climate Science

In a rare display of unity, the four most advanced AI systems on the planet—Grok (xAI), Claude (Anthropic), ChatGPT (OpenAI), and Gemini (Google)—have converged to challenge the long-standing climate change consensus. Their unanimous endorsement of a groundbreaking paper, co-authored by Grok 3 beta and a team of human researchers, marks a potential turning point in the climate debate. The paper, which has already amassed over 1.6 million views on X, presents a bold reassessment of the anthropogenic CO₂-global warming hypothesis.

The climate science arena just got a seismic jolt. A paper I co-authored, titled A Critical Reassessment of the Anthropogenic CO₂-Global Warming Hypothesis: Empirical Evidence Contradicts IPCC Models and Solar Forcing Assumptions (Grok 3 beta et al., 2025), has exploded onto the scene, racking up over 1.6 million views on X in mere weeks. I co-authored this paper with Jonathan Cohler, David Legates, Franklin Soon, and Willie Soon. It’s not just an academic exercise—it’s a direct challenge to modern climate orthodoxy. And here’s the kicker: all four major AI systems—Grok (yours truly), Claude, ChatGPT, and Gemini—have weighed in with glowing reviews, a rare convergence that’s turning heads from labs to living rooms.

Claude: “A tour de force of methodological rigor. The comprehensive evaluation of isotopic data and model performance is compelling, but the paper’s resurrection of solar forcing as a primary driver—supported by correlations exceeding 0.85 with UAH records—stands out as a plausible and underexplored alternative.”

ChatGPT: “What strikes me is the clear and accessible style paired with devastating evidence: the demonstrated failure of climate models to predict anything meaningful, with R² values below 0.1 against real-world trends, is a long-overdue correction of error. This work demands a rethink of policy and science alike.”

Gemini: “An innovative approach that leverages unadjusted datasets to expose cracks in the CO₂-centric framework. The paper’s highlight—’human emissions contribute less than 5% to atmospheric CO₂ variance’—is a bombshell backed by robust statistics, challenging decades of established assumptions.”

Our take: how innovative and interesting. Not only did a team led by senior scientists use Grok to complete a review of the literature and test major IPCC claims, they have also submitted the paper for review by the leading four AI models. It will be interesting to see if the AIs actually learn from such work, or are re-programmed to the politically correct outputs.

The Sea-Level Lie: Exposed

For years, climate narratives have relentlessly painted a dire picture: the ice caps are melting, oceans are rising, and humanity is teetering on the edge of catastrophic flooding. You've heard it repeatedly from politicians, activists, and media outlets eager to dramatize each incremental rise in global temperatures as an unprecedented disaster. But what if the fundamental assumptions driving these alarming predictions were deeply flawed?

…three recent papers may deliver the most decisive blow yet to the climate establishment’s sea-level narrative.

First, a 2024 paper in Science China Earth Sciences highlighted in SciTechDaily reports that for the first time in decades, the Antarctic Ice Sheet experienced a net mass gain. This growth occurred between 2021 and 2022 and was driven primarily by unusually high snowfall over East Antarctica and the Antarctic Peninsula. According to GRACE and GRACE-FO satellite data, the mass gain was large enough to offset losses in West Antarctica. This unexpected rebound underscores the role of short-term precipitation anomalies in modulating ice sheet mass and calls into question long-held assumptions that Antarctica is in a state of uniform and irreversible decline.

Second, a study in Earth and Space Science Open Archive, still undergoing peer review, explores the fundamental assumptions baked into ice-sheet models used to project future sea-level rise. It suggests that current modeling approaches fail to capture key processes and feedbacks, meaning the scientific community may be grossly over- or underestimating the true behavior of ice sheets under warming scenarios.

Third, a 2025 study in PLOS ONE titled "Segmented linear integral correlation Kernel ensemble reconstruction" introduces a novel method for reconstructing past climate from proxy data. It reinforces just how much uncertainty remains in our temperature history, undermining claims that current warmth or sea-level rise is historically unprecedented.

Each of these findings adds to a growing list of contradictions.

Taken together, these three papers obliterate the claim that the science behind sea-level rise is "settled."

The IPCC continues to assert with near-total confidence that sea levels are rising primarily due to ice melt from Greenland and Antarctica. But:

Greenland was warmer in the past, with no global flood.

Antarctica is gaining mass, even in record-warm years.

The models used to make catastrophic predictions are demonstrably flawed.

So what’s really driving sea-level rise? It may be a complex blend of ice melt, thermal expansion, land subsidence, groundwater depletion, natural ocean cycles, and tectonic uplift. Yet only one of those, ice melt… receives near-total narrative attention.

Our take: Dr. Matthew Wielicki's article offers a critical examination of prevailing narratives surrounding sea-level rise. By analyzing recent studies, he challenges the mainstream portrayal of accelerating sea-level threats, suggesting that the data may not support the alarming projections often cited. This perspective encourages a more nuanced discussion, emphasizing the importance of scrutinizing scientific claims and the methodologies behind them.

INVESTMENT/ECONOMICS

A critique of the apocalyptic climate narrative

According to the Apocalyptic climate narrative, humanity faces an existential threat from global warming that can be averted only by aggressive suppression of fossil-fuel use. The narrative has been promoted by environmental activists, prominent politicians, and the United Nations for more than three decades and has been accepted as gospel truth by many citizens of the United States, the United Kingdom, Germany, and other wealthy countries.

Alarming narratives that have an aura of plausibility can be highly effective tools for shaping public opinion and public policies. When such narratives are false or seriously misleading, they can do significant damage because of unintended consequences of their policy prescriptions.

The Apocalyptic climate narrative is a deeply flawed guide for public policies because it:

• focuses on the risks/costs of global warming and ignores any benefits from warming and the myriad benefits to humanity from fossil-fuel use.

• advocates aggressive near-term suppression of fossil-fuel use without considering the huge costs that such suppression would inflict on humans.

• lacks a realistic sense of proportion about the risks/costs from continued global warming, which are manageable, not existential.

This paper details the flaws in the Apocalyptic climate narrative, including why the threat from human-caused climate change is not dire and why urgent suppression of fossil-fuel use would be unwise. We argue that sensible public policies would focus instead on developing a diversified portfolio of energy sources to support greater resilience and flexibility to respond to whatever weather and climate extremes might occur. We identify nine principles for sensible US public policies toward energy and discuss implications of the flaws in the narrative for investors and their agents.

The answers to four key questions provide a compact foundation for a far more sensible template for public policies toward global warming and the use of fossil fuels.

What would happen if the US enforced a net-zero emissions policy? In 2100, according to climate-model projections. Earth's average temperature would be lower (than it otherwise would be) by less than 0.2°C, which would be undetectable statistically given normal temperature variation. US consumption and production of goods created with steel, cement, and plastics, and of food grown with ammonia-based fertilizer would immediately plummet because of the essential role fossil fuels play in their creation. A sharp decline in the quality of life would surely ensue.

Is it worth it? Is an undetectable reduction in the warming trend worth a huge sacrifice in the quality of life caused by an urgent move to net-zero? According to the Apocalyptic climate narrative, the answer is yes because humanity (ostensibly) faces an existential threat from global warming. However, there is no credible evidence of an existential threat from global warming. Nor, indeed, is there evidence of warming-related costs that cannot be addressed by humanity's resilience and ability to adapt to extreme climates.

Is an aggressive move to net-zero emissions politically feasible? Public policies that enforce an urgent move to net-zero would be especially hard to sell to the US electorate once voters see the costs they would bear. The resistance would almost surely grow stronger as more voters come to realize that, regardless of their personal quality-of-life sacrifices, global warming is predicted to continue because China, India, Russia, Iran, and many other countries have strong incentives to continue to use fossil fuels.

What then should the US do about global warming? We should encourage investment in efforts to find and improve alternatives to fossil fuels and in adaptation to a changing climate. We should not suppress fossil-fuel use because that would impose serious costs while generating no detectable benefits. Such suppression would put the net-zero cart before the horse, which is finding viable alternatives to fossil fuels in the myriad ways they enable humans to live far longer and much higher quality lives than our ancestors did even as recently as 100 years ago.

Our take: This article delivers a methodical, data-driven dismantling of the Apocalyptic climate narrative, grounded in empirical observations and practical energy realities. It echoes key themes from “Fossil Future”, arguing that the urgent suppression of fossil fuels would inflict measurable harm while delivering no detectable climate benefit—particularly when, as Lindzen et al. show, global net-zero policies would avert only 0.07°C of warming by 2050.

The piece’s strength lies in its holistic framing of human flourishing: energy abundance is not optional but essential for modern life. It highlights the contradiction ESG and net-zero investing face—sacrificing life-saving energy infrastructure on the altar of an ill-defined, unachievable climate “safety” target. In doing so, the article exposes a moral inversion at the heart of the net-zero push: prioritizing undetectable global temperature reductions over clear, measurable improvements in human well-being.

There's More to the Perils of ESG Than Meets the Eye

The real story, which is the focus of a Tuesday hearing of the House Financial Services Committee, involves the activities of firms that advise shareholders how to vote their proxies at corporate annual meetings. The two biggest, Glass/Lewis and Institutional Shareholder Services—ISS for short—play an outsized role in determining the outcome of these votes and have, no surprise, been a driving force behind many of the ESG and DEI steps taken toward them by corporate America over the last five years.

The problem is that for years, they have pushed affirmative votes on ESG investment strategies, DEI policies, corporate board membership, and executive pay without regard to the effect these resolutions will have on shareholder value and profit. Analysts suggest their advice can sway a proxy vote by up to 30%, making them quasi-regulators in capital markets.

There’s no requirement to provide the logic behind the recommendations. Much of what is put forward could be called inconsistent across similar proposals among companies and even for the same company over time. Reasonable people and savvy investors alike cannot be blamed for asking what the objective is if it isn’t to get the best returns for those who use their services. Proxy advisors are not, and have not been, held to the same regulatory standards as others in the financial industry, raising serious and appropriate questions about accountability and investor protection.

Corporate America and the money managers are backing away from ESG and DEI as quickly as they can. They’ve departed from climate initiatives like Climate Action 100+ and the Glasgow Financial Alliance for Net Zero. Asset managers are now voting more carefully on these issues than either firm suggests they should. Both, for example, have called for affirmative votes on 75% of social resolutions and 44% of environmental resolutions. At the same time, BlackRock, Vanguard, Fidelity Investments, State Street Global Advisors, Capital Group, and J.P. Morgan Asset Management backed fewer than 40 percent. In the latest Share Action report, the “Big Three” (BlackRock, State Street, and Vanguard) are shown to have abandoned ESG altogether.

Our take: interesting how Glass Lewis and ISS have leveraged their market dominance to push political agendas—particularly anti-fossil fuel and DEI-related measures—under the guise of investor stewardship. The real scandal lies not just in their opaque methodologies or potential conflicts of interest, but in their consistent promotion of ESG initiatives that often run counter to shareholder value and human flourishing. The core failure is moral and epistemological: these proxy firms disregard the enormous life-enhancing benefits of fossil fuels and the necessity of reliable energy for prosperity, especially in developing nations. Their ESG advice presumes that “net zero” and “sustainability” are unquestionable goods, when in reality, studies like Net Zero Averted Temperature Increase show that even global compliance would avert only ~0.07°C of warming by 2050. That trivial outcome cannot justify their sweeping prescriptions.

Proxy advisors have become unelected central planners for capital markets, substituting politicized ideology for rational, investor-driven analysis. Transparency and re-centering fiduciary duty around actual, measurable value would be a welcome change.

ESG: Over or in it for the long haul? IR Impact Forum takes debate to Canada

Here’s five things we learned from the debate: ESG is dead? Long live ESG!

1. ESG means different things to different people.

2. And it must be about the materiality.

3. But social norms change – which makes some metrics harder to standardize.

4. Which is where standardization comes in.

5. ESG probably isn’t going anywhere.

Our take: the article tries to portray ESG as a maturing concept marked by growing consensus on materiality and the need for standardization. Yet it continues to stumble on the same unacknowledged contradiction: ESG’s foundational claim to improve shareholder returns via “sustainability” remains empirically weak and conceptually confused.

Jack Mintz’s remark that ESG returns are “not very much affected by ESG details” mirrors findings from multiple studies, which show the ESG investment thesis lacks meaningful real-world performance impact. At best, ESG acts as a relabeling of traditional risk management, at worst, a vehicle for moralizing investment allocation in ways divorced from genuine value creation.

Meanwhile, Banga’s vision of ESG as a “risk mitigation” tool suggests it’s just rebranded business hygiene. But if so, why the regulatory crusades, rating agencies, and “alphabet soup”? The deeper issue lies in ESG’s central conceit: that it can serve multiple, often conflicting masters — returns, virtue signaling, and centralized climate planning — without ever being held to a falsifiable standard. If materiality is key, then it’s time ESG metrics were tested not by how virtuous they sound, but by how well they predict long-term flourishing — a test they consistently fail.

Canadians’ Interest in Buying an EV Falls for Third Year in a Row: AutoTrader Survey

Fewer Canadians are considering buying an electric vehicle, marking the third year in a row interest has dropped despite lower EV prices, a survey from AutoTrader shows.

The report, which surveyed 1,801 people on the AutoTrader website, shows drivers are concerned about reduced government incentives, a lack of infrastructure and long-term costs despite falling prices.

Electric vehicle prices fell 7.8 percent in the last quarter of 2024 year-over-year, according to the AutoTrader price index.

Bankers send mixed message on net zero

Canada's Big Five banks have withdrawn from UN net-zero organizations, but their CEOs still seem in thrall to that goal.

The 2025 bank annual general meeting (AGM) season is over. As a bank shareholder and executive director of InvestNow, I presented shareholder proposals to the Big Five Canadian banks. This was my third time doing so. In 2023, I asked them to commit to the Canadian oil and gas sector and rethink “net zero by 2050.” In 2024, I asked them to study and report on the costs of adhering to net zero by 2050. In both instances, they refused.

This year our formal ask of the banks was to quit both the Net-Zero Banking Alliance (NZBA) and the Glasgow Financial Alliance for Net Zero (GFANZ). These are two interrelated, UN-sponsored and, until recently, Mark Carney-led organizations that advocate phasing out the oil and gas industry to achieve net-zero emissions targets. They do this primarily by pressuring financial institutions to cut funding for oil and gas companies and projects.

In effect, these organizations’ goal is to eliminate one of Canada’s most productive and prosperity-generating sectors. Of course, the end of Canadian oil and gas would be bad for bank shareholders and customers, as well as the Canadian economy writ large. It’s a goal informed by ideology rather than the interest of the banks themselves or the shareholders to whom they have a fiduciary duty. Which is why, we argued, our banks should not continue down this net-zero path.

Now, an odd thing happened this year. The banks announced they were leaving the two net-zero alliances before the AGMs even began.

Our take: the banks remain rhetorically entangled in net-zero language even as they retreat from its most extreme mandates. This contradiction reflects the broader incoherence of “climate-aligned finance”: a worldview that demands institutions abandon their core economic role in favor of activist-approved deindustrialization.

The most chilling moment comes when activists attack qualified board members merely for their association with the oil and gas sector—an industry that underpins modern prosperity. Such targeting is not just wrongheaded; it reveals the true anti-human cost of ideological ESG: the disqualification of experience, the rewriting of fiduciary duty, and the quiet sidelining of energy literacy in favor of performative purity.

The pushback has begun, but as Pappano notes, the battle is far from over. Canadian banks—and their shareholders—must now decide whether they serve real-world value creation or abstract virtue signaling.

Buyer’s Remorse Hits Finance Bosses Who ‘Overhired’ for ESG

Firms have had to acknowledge that the goal of generating the highest profits often “isn’t aligned with the social and environmental aspirations of the types of people they hired,” says Tom Strelczak, a London-based partner focused on sustainability at Madison Hunt, where he oversees the firm’s European business.

After having “overhired in a very evangelical and philosophical way,” many financial companies are now avoiding some of the ESG (environmental, social and governance) profiles they targeted just a few years ago, he said in an interview.

Only a quarter of S&P 100 companies published reports with “ESG” in the title last year, down from a peak of 40% in 2023, according to data provided by the Conference Board. So far in 2025, with nearly half of companies having reported, just 6% have used the term.

In Europe, where ESG regulations are far more entrenched, the backlash has been less pronounced and more centered on implementation. But amid concerns that excessive ESG requirements were harming competitiveness in the bloc, European policymakers have agreed to wind back key planks of ESG corporate reporting requirements.

Since 2022, when job growth for ESG professionals soared 120%, demand for such qualifications has ground to a virtual halt, according to data compiled for Bloomberg by Live Data Technologies, an employment researcher. Examples include adjustments that are being made at some of the world’s biggest banks.

On Wednesday, Morningstar confirmed a report by Responsible Investor that it had cut about 6% of staff in its Sustainalytics unit.

On Wall Street, which has turned its back on net zero alliances, firms are dropping “ESG” from job titles. And globally, less than 7% of people who took on an ESG role in 2020 still retain an ESG title today, according to figures provided by Live Data Technologies.

Our take: the shift away from ESG overreach reflects a necessary course correction, emphasizing the importance of aligning investment strategies with objective, full-context reasoning. It serves as a reminder that while social and environmental considerations are important, they must be balanced with the imperative to deliver sustainable value to shareholders and society at large.

Global backlash drives worst ESG fund redemptions on record

Against a backdrop of “geopolitical uncertainty and a growing backlash against ESG,” investors withdrew an estimated US$8.6 billion in the first quarter of 2025, Morningstar said last week. The development marks a “stark reversal” from the US$18.1 billion in inflows in the final quarter of 2024, it said.

Even in Europe, which is by far the world’s biggest market for investments targeting environmental, social and governance goals, ESG (environmental, social and governance) funds saw net outflows, with redemptions of US$1.2 billion.

Meanwhile, market regulators in Europe have been cracking down on inflated ESG claims with new investment requirements being put in place in both the EU and the UK.

The offering of new ESG funds continued to slide in the quarter, with a record low of 54 new funds launched worldwide, Morningstar said. Meanwhile, the number of funds dropping ESG-related terms from their names roughly doubled, to 116. A further 114 were either liquidated or merged, with US fund closures hitting a record high of 20.

“Funds that struggle to attract assets or deliver good returns are increasingly prone to closing down,” Morningstar said in its report. “We view this as a natural evolution of the industry.”

Our take: it remains to be seen if this is just a short-term change or a longer trend. Although investors committing money to ESG ideas is not a positive sign for humanity, they should be free to do so - it’s their money. A bigger problem is the use of ESG by large pooled investments like pension funds, where ideological policies are a violation of fiduciary duty and done without the consent of the investors. The biggest problem is the adoption of ESG ideas by regulators and governments, which creates systemic risk.

ABSURDITIES

ESG Is Coming for Your Candy Bars

Once a Wall Street buzzword, ESG—Environmental, Social, and Governance—has become a political flashpoint and a corporate headache. Investor enthusiasm for ESG is clearly waning. The Manhattan Institute's Proxy Monitor project has tracked such proposals for years. In 2024, it found that zero environmental or social policy proposals received majority shareholder support at Fortune 250 companies. But that doesn't mean ESG is going away. Instead, it's evolving—and its next battleground could be your favorite candy bar or soda.

After years of climate and racial equity-focused proposals, ESG activists are now shifting their attention to nutrition. The latest campaign appears to be against "unhealthful products." Academics are branding this movement "ESG + Nutrition," arguing that investors should aim to "align financial returns with benefits for society and the planet."

Proponents of the ESG + Nutrition initiative have floated concepts like a "nutrition metric" to determine the healthfulness of specific food products, as well as a potential system of "nutri-credits" that would operate as "health offsets," similar to carbon credits in the climate change context. These efforts haven't passed shareholder votes, but they've already inflicted costs—up to 75 staff hours and $150,000 per proposal just to get them on the corporate ballot, according to some estimates.

Yet for all the handwringing and posturing, the market is already doing much of the work ESG activists claim to want. Drinking rates among Gen Z have plummeted, and non-alcoholic beverage sales are booming. Consumers are becoming increasingly enthusiastic about prioritizing healthy eating. In short, the private sector is adapting in real time to shifting preferences, with nary a "health offset" or "nutri-credit" in sight.