By David Callaway, Callaway Climate Insights

Lost in the hype around Rivian’s IPO this week, the surprise China-U.S. deal in Glasgow, and the newest wrinkle in the metaverse, or whatever you call it, was the rebirth of an energy company that helped create the industrial revolution and may soon lead the climate one.

General Electric’s (GE) announcement that it would break its storied, 129-year-old conglomerate into three parts, including an energy and technology company, harks back to the original Edison Electric, founded by Thomas Edison to sell his light bulbs. Today the unit serves the wind power industry as well as hydro, nuclear, gas, coal, and yes, it has a stake in a big oil field.

The spinoff, expected in 2024, will follow a similar deal done by Siemens with Siemens Energy in Europe, and could mimic energy transition strategies at companies such as Italy’s Enel and Spain’s Iberdrola (IBDRY), if managers move away from the fossil fuel’s segment of the business into the renewables part.

Either way, the current focus on energy transition and electricity grid evolution puts the GE energy unit into a leadership position from the outset when it spins.

Whenever big companies break themselves apart, it’s fashionable for investors to argue about which piece has the best prospects. CEO Larry Culp made his choice, saying he would stay with the aviation part of the business, and retain the GE name.

But rarely does a mature energy portfolio get a chance to take three years to reinvent itself behind the scenes like this. While it has plenty of reorganizing and strategizing to do about how to phase out or refocus its fossil-fuel operations, and boost its unprofitable renewable operations, it has the potential to set a blueprint for other large fossil fuel companies on how to transition. Who it chooses to lead the operations and how it is spun to the public will be closely watched.

We’re sure old Tom Edison would be proud that his baby, launched at the dawn of the electricity era in the 19th century, will now be a key player in remaking the world’s energy industry as it becomes the most important story of the 21st.

More insights below. . . .

What would The Great Gatsby invest in? Disconnect between oil and climate investors deepens

. . . . The celebrated American author F. Scott Fitzgerald held that true intelligence was being able to hold two opposing ideas at once. That doesn’t bode well for a solution between oil investors and those who want to shut all the fossil fuel companies, writes Mark Hulbert. As long as the world needs energy, oil companies will dig it out of the ground, and make money doing it, as we see from high prices these days. Investors will back them until something better comes along, Hulbert writes. Until each side understands each other better, the financial markets will be unable to drive the fight against climate change. . . .

Read the full column

EU notebook: Timmermans warns of green resistance; plus France/Germany nuclear rift

. . . . As COP26 draws to a close without a meaningful global deal to phase out fossil fuels, EU Climate Commissioner Frans Timmermans warned that without ambition and optimism, countries are doomed to reject the green transition as too expensive and too much of a sacrifice in terms of jobs and energy security, writes Daniel Byrne from Dublin. As a rift between France and Germany over nuclear energy has deepened, Timmermans highlighted the pain of what a regional transition might look like and why it is important that Western European nations help support Eastern European ones as they struggle with how to end their reliance on coal. . . .

Read the full EU notebook

Sustainability disclosure marks progress at COP26

. . . . As COP26 comes to an end there will inevitably be hand-wringing about the lack of a big deal. The surprise China/U.S. agreement this week created a stir just because it happened, but it seemed more geared to pushing negotiators to wrap up with something positive. Little noticed was an actual big deal, writes Marsha Vande Berg. The creation of an International Sustainability Standards Board for corporate disclosures of environmental, social, and governance metrics has the potential to set a uniform global standard. Most importantly, it creates valuable momentum coming out of the conference, which has been short in supply. . . .

Read the full column

Thursday’s subscriber insights: From the pledge to dump fossil fuel-powered cars to the best vegan haggis at COP26

. . . . Big news to come out of COP26 is that several major automakers and 30 nations have pledged to dump fossil fuel-powered cars by 2040. But several big carmakers and some major nations — including the U.S. — did not. Ultimately, it seems likely those who did pledge will keep to their promises, probably driven in part by rising gasoline prices, which will make EVs ever-more attractive to buyers. Read more here. . . .

. . . . Hearty congratulations to Jean Rogers, founder of the Sustainability Accounting Standards Board in San Francisco a decade ago, who was appointed global head of ESG at alternative investment manager Blackstone. Rogers is one of the best known names in the nascent ESG industry and is never shy about her disdain for corporate greenwashing. Expect some big stuff coming out of Blackstone (BX) shortly. . . .

. . . . Rivian (RIVN) shares rose more than 16% on their second day of trading after the electric truck maker recorded the biggest IPO since Alibaba (BABA) seven years ago. That the company has almost no revenue and $1 billion in losses didn’t seem to hold eager investors back from slapping a $70 billion valuation on it in first-day trading. But once the Tesla (TSLA) halo wears off, the shares might become a bit more sensibly priced. In the meantime, viva EVs. . . .

. . . . France has always been an outlier by producing the vast majority of its power — about 70% — from nuclear. And now it is about to ramp up again. It’s worth noting the nuclear industry, run by the mostly government-owned Électricité de France, has been pushing for new reactors for several years, thus bolstering the synergy with COP-type aims. Read more here. . .

. . . . At last, a story out of Glasgow that captures the heart of COP26 on the ground in the cold — Gizmodos’s ranking of best spots in town to get a vegan haggis. Check it out here: A Vegan Haggis Tour of Glasgow During UN Climate Talks. . . .

Editor’s picks: More contaminants found in U.S. tap water; organized crime is trafficking plastic waste

.@walkwithamal, a 3.5m puppet of a young Syrian refugee that has travelled 8,000km from the Syrian border, arrived at #COP26 for Gender Day.

She is here to raise awareness of the disproportionate impact of climate change on women and girls around the world. pic.twitter.com/hP3P8fST5Q

— COP26 (@COP26) November 9, 2021

Database shows hundreds of contaminants in U.S. tap water

In just the past two years, more than 320 toxic substances have been detected in U.S. drinking water systems, according to a new analysis by the Environmental Working Group. A report in Environmental Health News says the findings are part of the 2021 update to EWG’s national Tap Water Database, and support the call for tougher federal drinking water standards and the improvement of related infrastructure. EHN says researchers collected and reviewed results from water contaminant tests conducted by water utilities and regulators from all 50 states and the District of Columbia. After reviewing data from almost 50,000 water systems serving tens of millions of American households, “the researchers found sweeping drinking water contamination from numerous pollutants such as arsenic, lead, per- and polyfluoroalkyl substances, radioactive materials, and pesticides.”0

Organized crime groups profit from trafficking plastic waste

Plastic waste Americans think is being recycled properly is, thanks to organized crime rings, ending up causing environmental and health damage in poorer countries that never agreed to accept the waste. The Los Angeles Times reports on a new document from the independent Swiss research group Global Initiative Against Transnational Organized Crime that “maps the web of brokers, middlemen, legitimate recycling companies and organized crime groups that move millions of tons of discarded plastic from the U.S., Europe and Australia to countries in Southeast Asia and Africa.” Tons of low-quality, difficult-to-recycle plastic scrap is still finding its way to developing countries, in part because waste exporters are circumventing the regulations, according to the report.

Words to live by . . . .

“Our addiction to fossil fuels is pushing humanity to the brink. We face a stark choice: Either we stop it — or it stops us. It’s time to say: enough. … Enough of treating nature like a toilet. Enough of burning and drilling and mining our way deeper. We are digging our own graves.” — UN Secretary-General Antonio Guterres, speaking at COP26.

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