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Net Zero investment group calls for end to oil and gas project financing

March 30, 2023

S&P Capital IQ:

A UN-sponsored group of institutional investors managing $11 trillion in assets called for the elimination of investment in carbon-intensive oil and gas projects as part of the global effort to achieve net-zero carbon emissions by 2050.

The Net-Zero Asset Owner Alliance issued the directive March 29 as part of new guidance to its 85 members, predominately European institutional investors.

The group asked consumers and suppliers of oil and gas to set science-based goals to reduce emissions from their own operations, their suppliers, and the use of their products, commonly referred to as Scope 1, 2 and 3 emissions. The alliance called for investors to back energy projects that align with net-zero emissions goals and for oil and gas companies to adopt emissions targets aligned with those of the UN's Intergovernmental Panel on Climate Change or bodies such as the International Energy Agency.

"On private asset investment in new unabated oil and gas infrastructure, investors, including alliance members, shall align with credible 1.5-degree C net zero scenarios," the Net-Zero Asset Owner Alliance said in a news release. "This cannot be achieved if there are new upstream infrastructure investments in new oil and gas fields."

The alliance called for an immediate end to investments in carbon-intensive oil extraction projects such as oil sands. Shale gas and oil projects often have lower carbon footprints than their conventional peers and could be financed on a case-by-case basis, Alliance spokesperson Oliver Wagg said in an email. It will be up to individual investment managers to decide which projects support a path to net-zero, Wagg said.

[Bill Holland]

More: UN-backed investors' group demands end to financing of oil and gas projects

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