Macquarie Group Ltd (ASX: MQG) is facing claims its investments in companies engaged in fracking are in conflict with its swing towards climate protection. Despite the negative press, the Macquarie share price is currently trading 1.63% higher than yesterday's close.
At the time of writing, shares in the company are trading at $157.38 apiece.
The questions were raised this morning by The Sydney Morning Herald and The Age, which they report have since been confirmed by Macquarie, after the publications examined public disclosures.
The highlighting of Macquarie's investments in companies involved in fracking come only a week after the investment bank announced it is committed to aligning its financing activities with the global goal of net-zero emissions by 2050.
Let's take a closer look at the reported "red flag".
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Macquarie's fracking investments
The Macquarie share price is on the rise today despite reports this morning the company's investments in fracking are a "'red flag' for investors with net-zero targets".
Hydraulic fracturing – known as fracking – is the process of recovering oil or gas from shale rock. It is done by drilling into the earth and injecting water, sand, and chemicals into the rock at high pressure, releasing gas or oil.
Fracking has been criticised for the amount of water it uses and its suspected effects on groundwater, as well as other pollution concerns.
The Age and The Sydney Morning Herald listed a number of international companies engaged in fracking activities that Macquarie has investments in. It also highlighted the investment bank's holdings in ASX-listed Empire Energy Group Ltd (ASX: EEG), the company "leading the push on fracking operations in contested basins in the Northern Territory."
Macquarie CEO Shemara Wikramanayake was quoted by The Age and The Sydney Morning Herald as saying:
We don't have a specific view on fracking, we're not involved in any fracking projects ourselves. We are really focusing on the solutions and what are the new ways the world can source energy of which there are many which are environmentally friendly.
Macquarie's climate policy states:
We recognise that much of the world will depend on oil and gas to power economies and that until new, commercially viable technologies become available, these fuels will have a continued role in the provision of essential energy.
It makes no specific mention of fracking and, according to The Age and The Sydney Morning Herald, when questioned, Wikramanayake advised that Macquarie "did not have a house policy on fracking."
Macquarie share price snapshot
Regardless of today's news, the finance giant's shares have been performing well on the ASX lately.
Currently, the Macquarie share price has gained around 14% since the start of the year. It's also more than 50% higher than it was this time last year.
The company has a market capitalisation of around $56 billion, with approximately 346 million shares outstanding.
