Page 13 - FSUOGM Week 37 2019

FSUOGM POLICY FSUOGM
TPI urges fossil fuel industry to face up to climate change
GLOBAL
The initiative found that only two of the 50 leading oil and gas firms assessed were aligned with governments’ Paris pledges.
THE Transition Pathway Initiative (TPI), backed by investors managing $15tn in assets, has called on the world’s oil and gas majors to step up efforts to tackle their emissions.
The initiative, which aims to help asset own- ers assess how companies are addressing climate change, published its most detailed evaluation of the energy sector to date on September 18. It found that only 31 of the 109 energy firms it assessed had strategies aligned with govern- ments’ commitments under the 2015 Paris cli- mate agreement.
A mere two of these were oil and gas com- panies – Spain’s Repsol and Royal Dutch Shell – while the remaining 29 were electric utilities, TPI said in a statement. None of the fossil fuel firms were in line with the goal of restricting global warming to 2 decrees Celsius.
Rating managements’ response to climate change, it said that 31 oil and gas companies were not releasing data on the indirect emissions from the products they sold, while 23 had not fixed quantitative targets for curbing pollution. Since its previously assessment last year, TPI said 26 companies had not made any progress in the managerial area, while 15 had, five had gone backwards and four did not have trend data available.
In contrast, TPI said not only were 29 elec- tric utilities on track with Paris pledges, but 12 were even aligned with the climate accord’s most ambitious goal of keeping warming at below 2 degress Celsiuis. A number of energy companies in developed nations, particularly in Europe,
have sought to divest from coal power in recent years and focus more on renewables. Some oil and gas companies have also made significant inroads into clean energy, including Norway’s Equinor and France’s Total, but these cases are far rarer.
“Despite a climate emergency being declared across multiple countries, this new research shows the energy sector is inching rather than accelerating towards a low-carbon future,” Adam Matthews, TPI’s co-chair and director of ethics and engagement at the Church of England pen- sions’ board, commented. “In particular, too many fossil fuel companies are dragging their feet both on governance and actual carbon performance.”
“We, as a major institutional investor, are concerned that transition risk – the large and growing gap between government targets and company ambitions – is a major source of invest- ment risk,” Helena Vines Fiestas, global head of stewardship and policy at BNP Paribas Asset Management, added.
“There is no doubt that oil and gas com- panies are in a difficult position in navigating the transition to a low-carbon economy,” said Euan Stirling, global head of stewardship and ESG investing at Aberdeen Standard Invest- ments. “That makes it all the more important that we have at least some sector constituents who are starting to respond to the climate crisis by repositioning their businesses from the top down in the same way that many power gener- ators have.” ™
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