Library | ESG issues
Fossil Fuel Industry
The fossil fuel industry includes coal, crude oil, and natural gas, which are carbon-intensive energy sources formed from ancient organic material. Their extraction and use are major contributors to greenhouse gas emissions, environmental destruction, and climate change. In the finance industry, fossil fuels present both risks and opportunities, as investors assess regulatory challenges, transition risks, stranded asset potential, and shifting market demand while also exploring opportunities in cleaner energy alternatives and low-carbon transition strategies.
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200 and counting: Global financial institutions are exiting coal
Financial institutions (FI) across the world are increasingly recognising the risks and opportunities connected to coal, and many are reducing their exposure to the industry. The number of FIs withdrawing from coal is rapidly increasing, and this report catalogues the global trend towards coal withdrawal.
The changing climate policy landscape: Considerations for policymakers and the needs of investors
This report outlines eight key features of effective global climate policies. It analyses how different approaches to policy design shape capital markets' responses. The report also calls on governments to create policies with clear short, medium, and long-term targets that provide the right incentives and ensure a just transition.
Rethinking impact to finance the SDGs
This paper examines the financing gap for the UN’s Sustainable Development Goals (SDGs) and proposes new innovative solutions for stakeholders, including the need for stronger integrated planning, strategic thinking and policy integration to meet the US$5-7tn annual financing requirement.
Retiring oil and gas assets will have long-term financial and environmental impacts
Ageing oil and gas assets will have significant long-term financial and environmental impacts, with decommissioning costs rising steadily in coming decades. Asset retirement obligations could reach US$42 billion by 2024, posing considerable financial, logistical, and environmental challenges given limited financial assurance requirements, regulatory loopholes, and the complexity of decommissioning.
Catalysing bank climate action: Lessons from the inside
This report shares insights from the Climate Safe Lending Fellowship, a programme for banking professionals committed to accelerating the decarbonisation of their institutions. The report offers practical approaches and tools used by climate intrapreneurs to help their banks transition toward climate-safe banking.
A toolbox of sustainable crisis response measures for central banks and supervisors – second edition: Lessons from practice
This report is a toolbox of options for central banks and supervisors to align crisis response measures with climate and sustainability objectives. The second edition includes an extended analysis of sustainability-linked measures. It also highlights the importance of moving from voluntary to mandatory environmental reporting and recommends efficient disclosure to regulated financial institutions.
The debt-fossil fuel trap: Why debt is a barrier to fossil fuel phase-out and what we can do about it
This paper explores the links between indebtedness and fossil fuel exploitation in developing countries. The briefing concludes with recommendations for achieving debt justice, preserving the environment, and tackling climate change.
Fossil fuel divestment strategies: Financial and carbon-related consequences
This study examines financial and carbon-related impacts of fossil fuel divestment strategies. Empirical analysis of a Canadian stock index suggests ethical divestment reduces carbon exposure and performs as well or better than the benchmark.
Bridging ESG silos: The intersection of climate change and modern slavery
This briefing for investors examines the intersection of climate change and modern slavery. It details how environmental and social risks are interconnected and can materially affect a company's long-term profitability. The report provides case studies and tools to help investors identify, assess, and respond to these risks in their portfolios.
Rethinking climate change: How humanity can choose to reduce emissions 90% by 2035 through the disruption of energy, transportation, and food with existing technologies
This report examines how existing technologies in energy, transportation, and food could lead to a 90% reduction in greenhouse gas emissions by 2035. Using the Seba Technology Disruption Framework, they forecast disruptive changes and identify how markets could drive emissions mitigation.
Unused tools: How central banks are fueling the climate crisis
This report dissects the role of central banks in fossil fuel finance and climate change, presenting 10 criteria for assessment and analysing 12 central banks worldwide. While there is increased recognition among global central banks of the severity of climate change, they continue to prop up fossil fuels and largely maintain an industrial structure that uncritically exacerbates the climate crisis.
Net zero integrity: Assessment of the net zero pledges of Australian companies
This report assesses the net zero pledges of ten Australian companies, highlighting a gap between current voluntary commitments and the requirements of global standards. None of the firms have a comprehensive, quantified, and independently verified plan for reducing emissions in line with a science-based pathway.
Intangible cultural heritage, diverse knowledge systems, and climate change
This paper explores the relationship between climate change, different knowledge systems, culture, and heritage. It discusses the importance of a historical perspective, defines and describes different knowledge systems, and addresses the limitations of the predominant scientific approach. It also presents a framework for collaboration among plural knowledge systems.
Finance and climate change: A comprehensive climate assessment of the world’s largest financial institutions
An analysis of the top 30 global financial institutions exposes a notable absence of immediate action on climate change. While pledging net-zero targets by 2050, their plans lack focus and lack measurable short-term actions. Urgent reshaping of activities is imperative for these institutions to effectively transition to a net-zero future.
Environmental beta or how institutional investors think about climate change and fossil fuel risk
This report examines how institutional investors think about climate change and fossil fuel risk. It finds that investors consider these issues subjectively and are primarily concerned with short-term investment horizons. The report argues that understanding investor perspectives is crucial for enhanced mechanisms both to mitigate GHG emissions and minimise climate change-related financial instability.
Failure by design: Is the net zero asset managers initiative broken?
This initiative was designed to align asset managers' portfolios with net-zero targets. However, their methodology lacks standardisation and rigour, leading to ambiguous targets and little progress towards net zero. An overhaul of the initiative is needed to ensure asset managers are held accountable.
