Oil and Gas ‘Carbon Bomb’ Investment Plans Will Burn Paris Climate Agreement
FOR IMMEDIATE RELEASE
MEDIA CONTACT: Stefanie Spear, [email protected], 216-387-1609
BERKELEY, CA—MAY 13, 2022—The largest global oil and gas companies are quietly planning multi-billion dollar investments in new fossil fuel production, including 195 “carbon bombs” or projects that would each release more than a billion tonnes of carbon dioxide emissions (CO2) over the life of each project, according to an investigation by The Guardian.
These projects are fundamentally at odds with aligning emissions reductions with the 1.5°C Paris Agreement climate goal. The 12 biggest oil and gas companies, including ExxonMobil, Total, Chevron, Shell, and BP, are projected to collectively spend $103 million per day out to 2030 on these new projects.
Despite the global drive to reduce greenhouse gas emissions, in 2021, the International Energy Agency (IEA) announced that global CO2 emissions from energy combustion and industrial processes rose to their highest ever level. The IEA also stressed that no new oil and gas field development can occur in order to stay on track to limit global warming to 1.5°C and avoid the most destructive effects of climate change.
”Greenhouse gas emissions must decline if we are to have any hope of maintaining life as we know it on this planet — let alone enjoy a thriving economy,” said Danielle Fugere, president of As You Sow. “This cynical investment in disaster is unacceptable to investors who have made clear their expectation that every company must align their full range of emissions with the global 1.5oC goal. These projects are not aligned under any rational view of the world’s climate goals.”
Currently, India and Pakistan are experiencing extreme heatwaves that have breached 122°F in certain areas putting some of the world’s largest population centers at risk and testing the limits of human survivability. Scientists recently reported that the multi-year megadrought playing out across the Western U.S. is the most extreme in 1,200 years, and has been made 72% worse by human-caused climate change.
The total cost of U.S. billion-dollar disasters over the last five years (2017-2021) is $742.1 billion, with a 5-year annual cost average of $148.4 billion, both of which are new records and nearly triple the 42-year inflation-adjusted annual average cost. The U.S. disaster damage costs over the last 10 years (2012-2021) were also historically large — at least $1 trillion from 142 separate billion-dollar events. Swiss Re projects that climate change could reduce global economic output by more than $20 trillion by 2050.
“It is highly risky to invest in oil and gas projects that will contribute to exceeding the global carbon budget for maintaining a stable climate,” said Daniel Stewart, energy program manager at As You Sow. “It is a lose-lose proposition. If they are exploited, these projects will cause massive climate impact and harm investor portfolios. If climate change is curbed to a reasonable degree then there will be widespread asset stranding at these companies, both of which are value-destructive for shareowners.”
More than 70 countries, accounting for more than 80% of global CO2 emissions and 90% of global GDP, have committed to achieving net-zero emissions, as have more than 5,000 companies. More than 200 investors with $57.5 trillion in AUM have committed to aligning their portfolios with achieving net-zero emissions. In order to see progress critical for keeping global temperatures from rising beyond 1.5°C, every company must take responsibility for achieving ambitious near-term targets, robust transition plans detailing steps to achieve targets, and leadership in advocating for sweeping climate policy.
As You Sow’s recent report, “Road to Zero Emissions,” scores companies on net-zero progress and is in step with the Intergovernmental Panel on Climate Change’s findings that near-term action is needed to align emissions reductions with 1.5°C.
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As You Sow is the nation’s leading shareholder advocacy nonprofit, with a 30-year track record promoting environmental and social corporate responsibility and advancing values-aligned investing. Its issue areas include climate change, ocean plastics, pesticides, racial justice, workplace diversity, and executive compensation. Click here for As You Sow’s shareholder resolution tracker.