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Investors warn about fossil fuel use
A group of 70 major investors has sent letters to 45 top oil and gas, coal and electric companies urging the companies to assess the business risks associated with climate change, according to a press release from Ceres, a nonprofit organization that promotes sustainable business practices in the light of issues such as climate change and water shortages.
The investors, organizations that collectively manage more than $3 trillion in assets, include California’s two largest public pension funds, the New York State and New York City comptrollers, and the Scottish Widows Investment Partnership, Ceres said.
Most climate scientists think that emissions of carbon dioxide from the burning of fossil fuels are the main driver behind the current warming of the atmosphere.
Ceres said that the World Bank has warned that the world is currently heading for potentially catastrophic global warming of 4 degrees Celsius or more, while both the Intergovernmental Panel on Climate Change and the International Energy Agency have indicated that the world needs to live within a specific carbon budget to limit global warming to a more manageable 2 C level.
Exposure to risks? “We would like to understand (the company’s) reserve exposure to the risks associated with current and probable future policies for reducing greenhouse gas emissions by 80 percent,” the investors wrote, according to the Ceres release. “We would also like to understand what options there are for (the company) to manage these risks by, for example, reducing the carbon intensity of its assets, divesting most of its carbon intensive assets, diversifying the business by investing in lower carbon energy sources or returning capital to shareholders.”
As reported in the Oct. 27 issue of Petroleum News, a recent report by the World Energy Council expressed a view that coal, oil and gas will remain primary energy sources in the years and decades to come, despite concerns about carbon dioxide emissions. Given the relative abundance and low cost of these fuels, government intervention would presumably be necessary to drive policies for lower carbon dioxide generation.
—Alan Bailey
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