Asset managers around the world, such as the French company Amundi, have investments worth more than $400 billion in hydrocarbon producers, in contradiction with their stated climate commitments, denounces the NGO Carbon Tracker in a study published Friday.
The authors analyzed the investments of financial firms that are among the shareholders of 15 large private companies in the hydrocarbon sector, such as the British BP, the American ExxonMobil and the French TotalEnergies. None of these fossil fuel giants are “aligned” with a goal of limiting global warming to 1.5°C above the pre-industrial period, according to Carbon Tracker, which takes the most ambitious goal in the 2015 Paris agreement as a benchmark.
Among managers, a number of US groups stand out for their large investments in oil and gas companies, such as the giant BlackRock (with oil and gas assets worth $116 billion in 2022). Others, such as the French company Amundi (12 billion), have also been pinned down. The authors note that many of them have made a formal commitment to the climate front, notably by joining the Net Zero Asset Managers Initiative (NZAM).
The latter aims to “support the goal of zero net greenhouse gas emissions by 2050 or earlier, in line with efforts to limit warming to 1.5°C”. They include BlackRock, JPMorgan, UBS, Amundi, BNP Paribas and Lazard. Focusing on the managers who are members of this initiative, Carbon Tracker calculates that the value of their investments in the oil and gas sector reaches nearly $417 billion. This is the total for the 25 NZAM member financial groups with the largest exposure to the oil and gas sector.
Carbon Tracker notes that many have even increased their exposure between 2021 and 2022 to the fossil fuel sector, whose earnings have been inflated for more than a year by the war in Ukraine. NZAM member managers “are signaling to the market that they will invest in line with the Paris agreement’s goal of limiting warming to 1.5°C,” notes Maeve O’Connor, author of the report.
But “if they invest in oil and gas companies that are not aligned with this goal, they risk their reputation with the owners of the assets who care about the climate issue,” she warns. “Other investors may also be concerned about their exposure to energy transition risks,” she adds, as some fossil assets may lose value with the rise of other, cleaner forms of energy.
