Major financial firms that publicly support efforts to limit the climate crisis have made billions of dollars of investments in the world’s largest fossil fuels companies. A report, published by think tank Carbon Tracker on 5 May, found that these included products marketed as ‘green’.
Billions invested in fossil fuels
The analysis found that 25 members of the Net Zero Asset Managers’ initiative (NZAM) have a combined $417 billion in holdings in 15 oil and gas firms. These included ExxonMobil and TotalEnergies. The Canary’s Hannah Sharland reported:
TotalEnergies announced staggering profits of $6.5bn for the first three months of 2023. Meanwhile, the nonprofit Business & Human Rights Resource Centre (BHRRC) revealed that in 2022, TotalEnergies was one of the five worst companies for projects linked to attacks against human rights defenders.
Carbon Tracker found that last year many of these asset managers even increased their exposure to the fossil fuel sector, which has seen profits surge as a result of Russia’s invasion of Ukraine.
On the other hand, it said none of the 15 fossil fuel giants it focused on have activities and businesses aligned with the Paris Agreement. The climate deal, made in 2015, committed 194 national governments to a goal of limiting warming to 1.5C above pre-industrial levels
US asset management giant BlackRock topped the list of firms signed up to NZAM. It had exposure to all 15 oil and gas firms, with investments totalling $116bn last year, according to Carbon Tracker.
‘They risk their reputation’
Carbon Tracker looked at a total of 90 asset managers in the report. It warned that many had products that risked misleading investors and greenwashing, and highlighted BlackRock’s ACS (Authorised Contractual Scheme) Climate Transition World Equity Fund. The fund claims to:
maximise the opportunities and minimise the potential risks associated with a transition to a low-carbon economy.
However, Carbon Tracker said the fund has $219m invested in 10 of the 15 fossil fuel companies.
Overall, the analysis found that more than 160 funds specifically marketed with the labels “ESG” (environmental, social and governance), “sustainable”, “climate”, “carbon” and “transition” hold $4.6bn of investments in the 15 oil and gas companies.
Report author Maeve O’Connor – Carbon Trackers’ associate analyst of oil, gas and mining – said:
Asset managers that join coalitions such as the Net Zero Asset Managers Initiative are signalling to the market that they will invest in line with the Paris target of holding global warming to 1.5C
If they invest in oil and gas companies that are not aligned with this target, they risk their reputation among climate-conscious asset owners while other investors may increasingly be concerned over exposure to energy transition risk.
Featured image by Wikimedia Commons/Grahame C. Anderson, via CC 4.0, resized to 770×403