Those investing in coal and oil have perhaps felt secure seeing the global climate negotiations proceed at a disappointing pace. However, the initial carbon crunch is being delivered by increasingly market-driven renewable energy development, and by national level clean energy and energy efficiency policies – such as renewable energy support schemes and emission regulation in Europe, or clean air policies in the U.S. and in China. Global coal demand, and possibly even oil demand, could peak even before a strong climate treaty is agreed.
investors often
underestimate their exposure to fossil fuels
Investors often underestimate their exposure to fossil fuels, particularly indirect exposure through e.g. passively managed pension funds and sovereign debt of strongly fossil fuel dependent states.
Assessing exposure, requiring fossil energy companies to disclose and reduce carbon risks, and reducing investments in sunset energy technologies will lead to profitable investment in a world that moves to cleaner and smarter energy systems.
Improving competitiveness of renewable energy, growing opposition to destructive fossil fuel projects, concerns on water shortage and the imperative of cutting global CO2 emissions all point in the same direction: Governments, companies and investors should all be planning for a world with declining fossil fuel consumption – not only because it’s the right thing to do, but also because it makes economic sense.
It is the direction the world will be moving to – faster than many yet anticipate
Kumi Naidoo
Executive Director of Greenpeace International
Perreault Magazine / February, 2014 41