Tighter climate policies could erase $2.3 tln in companies value -report

  • In US
  • 2019-12-09 00:01:00Z
  • By Reuters

* Investor group PRI warns of abrupt policy change by 2025

* Fossil fuel sector could lose third of current value

By Ron Bousso

LONDON, Dec 9 (Reuters) - Tighter government climate regulations by 2025 could wipe up to $2.3 trillion off the value of companies in industries ranging from fossil fuel producers to agriculture and car makers, an investor group warned in a report.

Rules aimed at lowering carbon emissions are expected to accelerate in the coming years as countries scramble to meet obligations under the 2015 Paris climate agreement limiting global warming.

Any abrupt policy shifts risk severely disrupting current investment strategies, U.N.-backed Principles of Responsible Investing (PRI), a group representing investors with $86 trillion of assets under management, said in a report.

"As the realities of climate change catch up, social pressure mounts, and low carbon solutions get cheaper, it's highly improbable that governments will be allowed to let the world sleep-walk into greater rises in temperature without being compelled into forceful action sooner," PRI Chief Executive Fiona Reynolds said.

"This poses huge threats for assets and for the wider system."

Most exposed is the fossil fuel sector which could lose one third of its current value, the report said. Fossil fuels account for around two thirds of global greenhouse gas emissions.

Coal firms could lose as much as 44% in value, while the world's top oil and gas companies risk losing up to 31% of their current market share, according the report which forecasts oil demand peaking around 2027.

The analysis showed that broad index-based funds such as the iShares MSCI ACWI ETF could lose up to 4.5% or $2.3 trillion in its value under the most extreme scenario.

The shift would nevertheless also lead to winners.

Auto makers heavily invested in electric vehicles and electric utility firms using low-carbon power could more than double their values, the report said.

The report came out as world leaders meet in Madrid for the 2019 United Nations climate change conference, known as COP25.

(Reporting by Ron Bousso; Editing by Christina Fincher)


More Related News

Big oil remembers
Big oil remembers 'friend' Trump with millions in campaign funds

Donations to support the president's re-election have flooded in from a fossil fuel industry that has enjoyed three years of energy deregulation and tax cutsIn mid-June the oil pipeline billionaire Kelcy Warren hosted a fundraising bash at his palatial Dallas, Texas, home that drew the presence of Donald Trump and raised $10m for the US president's campaign coffers.Warren's fundraising gusher for Trump occurred after he and his wife had donated a hefty $1.7m since 2019 to Trump Victory, a fundraising vehicle for Trump's re-election and the Republican National Committee, according to the non-partisan Open Secrets group.All this campaign largesse comes after Warren's company Energy Transfer...

Canada's last intact ice shelf collapses due to warming
  • World
  • 2020-08-07 19:38:03Z

Much of Canada's remaining intact ice shelf has broken apart into hulking iceberg islands thanks to a hot summer and global warming, scientists said. Canada's 4,000-year-old Milne Ice Shelf on the northwestern edge of Ellesmere Island had been the country's last intact ice shelf until the end of July when ice analyst Adrienne White of the Canadian Ice Service noticed that satellite photos showed that about 43% of it had broken off. The biggest is nearly the size of Manhattan - 21 square miles (55 square kilometers) and 7 miles long (11.5 kilometers).

Climate change: Lockdown has
Climate change: Lockdown has 'negligible' effect on temperatures

New research says that the lockdown, by itself, will make little difference to climate change.

Climate change: UK peat emissions could cancel forest benefits
Climate change: UK peat emissions could cancel forest benefits

UK peatland emissions could cancel out all carbon reductions from new and existing forests.

Problems plagued U.S. CO2 capture project before shutdown: DOE document
Problems plagued U.S. CO2 capture project before shutdown: DOE document
  • US
  • 2020-08-06 23:41:15Z

The Petra Nova plant's performance was seen as a major test of emerging efforts to capture planet-warming gases and store them below ground, a technology considered crucial to companies and governments hoping to fight climate change. The joint venture project between NRG Energy Inc and Japan's JX Nippon had received a $190 million grant from the U.S. government. Before being mothballed, it was the only U.S. project capturing carbon from a coal-fired power plant.

Leave a Comment

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

Cancel reply


Top News: US