Responsible Investment News

Writing on the wall for oil companies, say funds

A survey of 39 fund managers with $US10.2 trillion under management found that 24 per cent wanted the oil industry “to wind down their businesses and return cash to shareholders”.

All but two of the funds said that oil stocks would not be attractive investments within ten years if they failed to respond to climate risks.

Among respondents to the survey by the UK Sustainable Investment and Finance Association and the Climate Change Collaborative were leading names such as Aviva, Legal & General Investment Management, M&G Investments, Invesco, Hermes Asset Management and Schroders.

Financial services companies increasingly are seen as crucial players in the fight against climate change. By pricing environmental and policy risk into their models, they will be less likely to extend funds to producers or heavy users of fossil fuels and, as a result, will accelerate the shift to alternative energy sources.

The Bank of England has warned that climate change could wipe up to $US4 trillion off the value of fossil fuel assets and up to $US20 trillion across all sectors of the economy.

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