LONDON, Feb 10 (Reuters) – Some climate-focused investors in BP (BP.L) voiced concern this week about the company’s announcement that it has scaled back climate targets and now plans to produce more oil and gas for longer, yet the company’s share price continued to surge on Friday.
Chief Executive Bernard Looney’s strategy revision on Tuesday included a cut to BP’s 2030 emissions reduction target. Three years ago, he took the helm with a vow to re-invent the oil and gas company.
Bruce Duguid, head of stewardship at Federated Hermes, which co-leads negotiations with BP over its energy transition on behalf of a large group of institutional investors called Climate Action 100+, voiced concern over Looney’s pivot.
“In the context of a very strong financial outcome, those investors with net-zero goals, including many of our clients, will be concerned at such a material change to BP’s 2030 absolute emissions reduction target,” Duguid said in a statement to Reuters.
Taking aim at Wall Street banks financing the oil, gas, and coal extraction fueling the climate crisis, a coalition of institutional investors on Tuesday announced the filing of climate-related shareholder resolutions in an effort to force “more climate-friendly policies that better align with” the firms’ public commitments to combating the planetary emergency.
In the resolutions, members of the Interfaith Center on Corporate Responsibility (ICCR) and Harrington Investments asked six banks—Bank of America, Goldman Sachs, JPMorgan Chase, Morgan Stanley, Citigroup, and Wells Fargo—to enact policies phasing out fossil fuel finance, disclose plans for aligning their financing with their stated near-term emissions reduction goals, and to set absolute end-of-decade emissions reduction targets for their energy sector financing.
Shareholders also filed climate resolutions at four companies—Chubb, Travelers, The Hartford, and Berkshire Hathaway—that insure fossil fuel projects.
“Each of the major banks has publicly committed to aligning its financing with the goals of the Paris agreement to achieve net-zero emissions by 2050, a target widely considered imperative to avoid catastrophic climate impacts and financial losses,” ICCR said in a statement. “Scientific consensus shows that new fossil fuel expansion is incompatible with achieving net-zero by 2050, yet these banks continue to invest billions of dollars each year in new fossil fuel development—a fact corroborated by a new Reclaim Finance report released last week.”
As Stop the Money Pipeline—a coalition of over 200 groups seeking to hold “financial backers of climate chaos accountable”—noted:
A slate of resolutions calling for policies to phase out financing for fossil fuel expansion was filed by the same investors at U.S. banks in 2022. They received between 9% and 13% support, which was a significant milestone for these first-of-their-kind proposals. This year’s fossil fuel financing proposals have been updated to encourage banks to finance clients’ low-carbon transition so long as those plans are credible and verified. The previous resolutions were supported by many major institutional investors, including the New York State and New York City Common Retirement Funds.
New in 2023 are the resolutions on absolute emissions reduction targets for energy sector financing filed by the New York City and New York State comptrollers, and the resolutions calling for disclosure of climate transition plans filed by As You Sow. The day before the resolutions were filed, Denmark’s largest bank, Danske, announced a phaseout of corporate financing for companies engaged in new coal, oil and, gas development.
“Any climate commitment from a bank that is still financing fossil fuel expansion is greenwashing, pure and simple,” Arielle Swernoff, U.S. banks campaign manager at Stop the Money Pipeline, said in a statement. “By supporting these resolutions, shareholders can hold banks accountable to their own climate commitments, effectively manage risk, and protect people and the planet.”
Dan Chu, executive director of the Sierra Club Foundation—which led the filing at JPMorgan Chase—lamented that “all major U.S. banks continue to finance billions of dollars for new coal, oil, and gas projects every year. Such financing undermines the banks’ net-zero commitments and exposes investors to material risks.”
“These shareholder resolutions simply ask banks to align their promises with their actions and to adopt policies to phase out the financing of new fossil fuel development,” Chu added.
Referring to a warning from the International Energy Agency, Kate Monahan of Trillium Asset Management—which spearheaded the Bank of America filing—said that “we will not be able to achieve the Paris agreement’s goal of limiting warming to 1.5°C if banks continue to finance new fossil fuel exploration and development.”
“Bank of America has publicly committed to the Paris agreement but continues to finance fossil fuel expansion with no phaseout plan, exposing itself to accusations of greenwashing and reputational damage,” Monahan contended. ” By continuing to fund new fossil fuels, Bank of America and others are taking actions with potentially catastrophic consequences.”
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The new coalmine in Cumbria is likely to prevent the UK from meeting its internationally agreed commitment to reduce emissions of the powerful greenhouse gas methane, analysis has suggested.
The Whitehaven colliery, controversially approved by ministers shortly before Christmas, will release about 17,500 tonnes of methane every year, according to estimates from the Green Alliance thinktank.
That is about the same as 120,000 cattle, or about half the beef herd in Cumbria at present, and could put the UK’s methane-cutting targets out of reach.
The analysis comes as campaigners also raise concerns about the filing of more than 100 oil and gas drilling licence applications.
Rapid and drastic cuts to global greenhouse gas emissions are necessary to curb warming and prevent the most dire climate scenarios from becoming reality.
But a new study released Friday by the Global Carbon Project finds “no sign of the decrease that is urgently needed” as emissions remain at record levels this year, with fossil fuel giants and governments plowing ahead with new extraction efforts that could push critical climate targets out of reach.
Scientists with the Global Carbon Project estimate that total CO2 emissions will reach 40.6 billion tonnes this year—driven by rising pollution from fossil fuels—and will likely continue to rise in 2023 without bold action from policymakers worldwide.
“If current emissions levels persist, there is now a 50% chance that global warming of 1.5°C will be exceeded in nine years,” the researchers note. “Projected emissions from coal and oil are above their 2021 levels, with oil being the largest contributor to total emissions growth.”
“The 2022 picture among major emitters is mixed: emissions are projected to fall in China (0.9%) and the E.U. (0.8%), and increase in the USA (1.5%) and India (6%), with a 1.7% rise in the rest of the world combined,” the report finds.
Professor Pierre Friedlingstein of Exeter’s Global Systems Institute, the lead author of the new study, lamented in a statement that “we see yet another rise in global fossil CO2 emissions” in 2022 “when we need a rapid decline.”
“There are some positive signs,” Friedlingstein added, pointing to the slowing growth of fossil fuel emissions over the long term, “but leaders meeting at COP27 will have to take meaningful action if we are to have any chance of limiting global warming close to 1.5°C.”
That increasingly imperiled warming target remains a focus as world leaders gather in Sharm El-Sheikh, Egypt for the annual United Nations climate conference, a key opportunity for nations to commit to collective action against a climate emergency that is wreaking havoc worldwide.
Professor Corinne Le Quéré of the University of East Anglia, a co-author of the Global Carbon Project study, said that if governments respond to worsening climate chaos “by turbocharging clean energy investments and planting, not cutting, trees, global emissions could rapidly start to fall.”
“We are at a turning point and must not allow world events to distract us from the urgent and sustained need to cut our emissions to stabilize the global climate and reduce cascading risks,” Le Quéré warned.
Allowing planetary heating to exceed 1.5°C above preindustrial levels by the end of the century would spell disaster for large swaths of the planet as trends already seen around the world—from increasingly extreme weather events to species extinctions to rapidly melting sea ice—would accelerate, potentially locking in irreversible climate damage.
Professor Mark Maslin of University College London toldThe Guardian that the Global Carbon Project study is “deeply depressing.”
“It sends a clear message to the leaders at COP27—the world needs to have significant cuts in global emissions in 2023 if we are to have any chance to keep climate change to 1.5°C,” said Maslin.
The richest people on the planet, representing a small sliver of the total population, are emitting carbon dioxide at a rate that’s imperiling hopes of keeping global heating below 1.5°C, prompting fresh calls for government action to rein in “luxury” pollution and combat the intertwined crises of inequality and climate change.
New research by the Institute for European Environmental Policy (IEEP) and the Stockholm Environment Institute (SEI) shows that by 2030, the carbon footprints of the wealthiest 1% of humanity are on track to be 30 times larger than the size compatible with limiting global warming to 1.5°C by the end of the century, the Paris Agreement’s more ambitious temperature target.
If current trends continue, the richest 1% will account for 16% of global CO2 emissions in 2030.
The carbon emissions of the poorest half of the global population, meanwhile, “are set to remain well below the 1.5°C-compatible level,” according to the analysis, which was commissioned by Oxfam International and published Friday. The planet has already warmed by roughly 1.1°C, and scientists have said any heating beyond 1.5°C would have destructive consequences worldwide.
“The emissions from a single billionaire spaceflight would exceed the lifetime emissions of someone in the poorest billion people on Earth,” Nafkote Dabi, Oxfam’s climate policy lead, said in a statement. “A tiny elite appear to have a free pass to pollute. Their oversized emissions are fueling extreme weather around the world and jeopardizing the international goal of limiting global heating.”
“The emissions of the wealthiest 10% alone could send us beyond the agreed limit in the next nine years,” Dabi added. “This would have catastrophic results for some of the most vulnerable people on Earth who are already facing deadly storms, hunger, and destitution.”
Authored by Tim Gore, head of the Low Carbon and Circular Economy program at IEEP, the new research paper notes that “while carbon inequality is often most stark at the global level, inequalities within countries are also very significant.”
“They increasingly drive the extent of global inequality, and likely have a greater impact on the political and social acceptability of national emissions reduction efforts,” the paper reads. “It is therefore notable that in all of the major emitting countries, the richest 10% and 1% nationally are set to have per capita consumption footprints substantially above the 1.5⁰C global per capita level.”
To slash the outsized planet-warming emissions of the global rich, the study calls on policymakers to pursue restrictions on mega-yachts, private jets, and recreational space travel. In a paper published last month, French economist Lucas Chancel estimated that “an 11-minute [space] flight emits no fewer than 75 tonnes of carbon per passenger once indirect emissions are taken into account (and more likely, in the 250-1,000 tonnes range).”
“At the other end of the distribution, about one billion individuals emit less than one tonne per person per year,” Chancel observed. “Over their lifetime, this group of one billion individuals does not emit more than 75 tonnes of carbon per person. It therefore takes a few minutes in space travel to emit at least as much carbon as an individual from the bottom billion will emit in her entire lifetime.”
In addition to targeting sources of “luxury carbon consumption,” the analysis by IEEP and SEI also proposes restrictions on “climate-intensive investments like stock-holdings in fossil fuel industries.”
“The global emissions gap to keep the 1.5°C Paris goal alive is not the result of the consumption of most of the world’s people: it reflects instead the excessive emissions of just the richest citizens on the planet,” Gore said in a statement. “It is necessary for governments to target measures at their richest, highest emitters―the climate and inequality crises should be tackled together.”
Emily Ghosh, a scientist at SEI, agreed, arguing that “carbon inequality must urgently be put at the center of governments efforts to reduce emissions.”
“Our research highlights the challenge of ensuring a more equitable distribution of the remaining and rapidly diminishing global carbon budget,” said Ghosh. “If we continue on the same trajectory as today, the stark inequalities in income and emissions across the global population will remain, challenging the equity principle at the very heart of the Paris Agreement.”
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