ESG Essentials: Oil company AGMs, nature protection, global warming

ESG CommsESG EssentialsLeave a Comment

UK asset managers vote against measure forcing oil companies to reduce emissions

Several of the largest UK asset managers, including abrdn, Janus Henderson and Legal & General, voted against a resolution that would force ExxonMobil and Chevron to reduce their emissions.

Exxon Mobil emissions totaled 110 million metric tonnes of CO2e in 2022, and pressure is mounting from shareholder activist groups for these companies to reckon with their effect on climate change, but serious reductions are yet to occur. 

Recently, the Church of England pensions board, previously a major force in pushing oil companies to change at AGMs, announced that it would divest completely from several oil and gas firms, citing a consistent track record of missed targets and disingenuous climate statements. 

The failure of these measures, which would force the companies to take even the most basic steps towards decarbonisation, will make some investors question the value of their stake in oil majors.

EU Parliament passes contested nature protection law

After a closely contested legislative process, the EU Parliament passed a legal proposal to restore degraded natural ecosystems in the continent, aiming to put a final law before the body in 2024. 

This proposal will force countries in the EU to put in place initiatives to boost the health of ecosystems and natural habitat on over a fifth of their land and sea by 2030. This comes amid a raft of new international and regional legislation to protect biodiversity, including the landmark Kunming-Montreal Framework

While this legislation does not reach the lofty ambitions of the framework, which called for 30% of nature to be conserved by 2030, it is an important step for protecting biodiversity.

UN scientists declare first week of July the hottest in world history

Scientists from the UN declared that average global temperatures in the first week of July were the hottest in recorded history, a startling milestone in a series of dire climate warnings. UN Scientists from the World Meteorological Organisation (WMO) confirmed that these higher temperatures will have a damaging effect on global biodiversity, ecosystems and human populations around the world. 

Southern Europe is already in the middle of an intense heatwave, with temperatures across many regions consistently reaching 40°C. Death Valley, USA, one of Earth’s hottest places, nearly reached a global temperature record of 53.3°C and Canada’s unusually fierce forest fires have burned through over 25 million acres of forest.

These intense weather patterns are a dire warning of the accelerating pace of global warming, and should concern climate scientists and sustainable investors alike.

Bloomberg reveals that oil giant Saudi Aramco gained access to ESG funds through complicated web of funding

New reporting from Bloomberg has revealed that Saudi Aramco, one of the world’s largest oil companies, gained funding from ESG funds for several of its oil pipeline expansions. As part of a corporate restructuring that allowed the company to gain billions of dollars in financing, Aramco created several connected shell companies. These companies, once removed from their original structure, could claim to be unaffiliated with fossil fuels and gain access to ESG funding while simultaneously funnelling their money towards fossil fuels. 

While Bloomberg could find no direct evidence that this was intentional, it nevertheless exposes a major loophole in international sustainable finance regulations, implicating many large financial institutions, including BlackRock, who presided over the restructuring. 

This diagram illustrates the complicated web of corporate structuring that made this funding possible. For sustainable finance to remain credible, it must continue to push for greater transparency in investment decisions to avoid money earmarked for green causes going to climate-hostile ends.

Leave a Reply

Your email address will not be published. Required fields are marked *