“ Fossil fuels are a dead end for our planet, for economies. A prompt well- managed transition to renewables is the only best way to energy security, universal access and the green jobs our world needs.
” ANTÓNIO GUTERRES, UN SECRETARY-GENERAL
Crown Prince Mohammed bin Salman said the move was “part of the kingdom’s long-term strategy to support the restructuring of its economy”. However, oil companies across the world are being
accused of greenwashing: making claims about their efforts to achieve ESG targets while pouring increasing amounts of investment into oil and gas exploration. An analysis by campaign group ShareAction has shown that 25 global banks who pledged in April last year to reduce emissions had since provided $33 billion in loans and other financing to companies with major oil and gas expansion plans. A recent report from researchers at Tohoku
University and Kyoto University in Japan found that while leading oil companies were now frequently using terms such as low carbon, climate and transition in their annual reports, their actions on clean energy were mostly pledges and that the companies remained financially reliant on fossil fuels. “We thus conclude that the transition to clean energy
business models is not occurring, since the magnitude of investments and actions does not match discourse,” said the report.
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ENERGY FIRMS ‘ON NOTICE’ On February 28, the Intergovernmental Panel on Climate Change (IPCC) issued a stark warning on the likely consequences of climate change, prompting UN Secretary-General António Guterres to place oil and gas companies “on notice” because fossil fuels were “choking” humanity. He accused them of not doing enough to cut emissions. “Oil and gas giants and their underwriters are on
notice,” he said. “You cannot claim to be green while your plans and projects undermine the 2050 net zero target and ignore the major emission cuts that must occur this decade.” Mr Guterres added that “the present global energy
mix is broken” and called for more progress on the move away from fossil fuels. “As current events make all too clear, our continued reliance on fossil fuels makes the global economy and energy security vulnerable to geo- political shocks and crises,” he said. “Instead of slowing down the decarbonisation of
the global economy, now is the time to accelerate the energy transition to a renewable energy future. Fossil fuels are a dead end – for our planet, for humanity and for economies. A prompt, well-managed transition to renewables is the only pathway to energy security, universal access & the green jobs our world needs.” And there are some very practical reasons why the
world’s oil giants should be turning green. Bloomberg Intelligence reports that “oil companies are finding it increasingly difficult to raise financing amid rising environmental, social and governance concerns, while banks are under pressure from their own investors to reduce or eliminate fossil-fuel financing”. According to Daniel Romito, Director of ESG
Strategy and Integration at Pickering Energy Partners – the Houston-based energy asset management and investment strategies company – ESG has transcended from being a tick-box exercise for oil firms. Investors
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