From Polluters To Emerging As Planet Savers

BlackRock and oil companies want to fix the planet. But how much can it help?

BlackRock’s Move

In February, BlackRock, which is the world’s biggest investor, stated that oil companies and other polluting industries should divulge their common emissions and peg targets to reduce them. This means that companies should disclose direct emissions from operations and from energy they buy, which are known respectively as scope 1 and scope 2 emissions.

BlackRock also said that fossil fuel extractors should base targets to decrease emissions on the carbon released when their products are burned and these are known as scope 3 emissions. It also stated that firms should set stringent short, medium and long-term targets. BlackRock will consider voting against management and potentially sell shares in those companies which are not sufficiently focused on the net-zero transition, from its active portfolios.

The interesting thing to note here is that BlackRock controls assets that also include holdings of billions of dollars in oil companies. We also know that oil companies are one of the major reasons behind climate change. So, are companies that lead to the worsening of the planet trying to save it now?

Other companies

Apart from BlackRock, BP, a British multinational oil and gas company, said that it is looking to cut its carbon emission to virtually zero by 2050. HP will achieve this goal, in part by offsetting emissions via carbon capture schemes and natural restoration. The firm also promised to grow low-carbon investments by eightfold by 2025 and tenfold by 2030, while decreasing its fossil fuel output by 40% in the next decade.

Total, a French oil company, has made several multibillion pound investment in renewable energy. The company also has one of the largest pipelines of clean energy projects of any major oil company.

Shell, a British-Dutch multinational oil and gas company, is looking to hit net zero in absolute terms by 2050. Exxon, a U.S oil company, has committed to disclosing its emissions and has fixed near-term targets for decreasing emissions, methane and gas flaring.

The Bigger Picture

The decision by BlackRock to make companies more accountable for their actions more is commendable, but this move comes after it has been criticized by activists for several years. A campaign called “BlackRock’s Big Problem” was created by a group of non-profits in 2018 and this campaign was aimed at pressuring the company to push the firms it owns to align their business practices with a low-carbon world.

Also, in 2019, The Guardian revealed the names of 20 fossil fuel companies whose continuous exploitation of the world’s oil, gas and coal reserves can be directly linked to more than one-third of all greenhouse gas emissions in the modern era. When we look at the names of the companies, it is no surprise to see BP at the 6th place, Royal Dutch Shell at 7th place Total SA at 17th place.

At the end, what we would like to say is that oil companies and asset managers who invested in oil companies played a key role in the destruction of the environment. So, the question we have is, will these changes and measures have a big impact on the planet and undo all the damage that has been done to the environment or all these are just put in the paper and not actually executed…

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