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[en] BlackRock CEO Larry Fink recently announced in his annual letter to clients that the asset manager would seek to align its portfolio with a net zero economy. Policy announcements also included a promise to hold portfolio companies accountable for setting net zero plans and a commitment to increase oversight of companies with 'significant climate-related risk' and support more shareholder climate resolutions. These new measures imply huge changes for BlackRock as they require its investments to quickly become compatible with a 1.5 deg. C world, which is far from being the case. Unfortunately, BlackRock has yet to clearly define what net zero means, or to establish short and medium term benchmarks that would reduce overall emissions in line with climate science. Furthermore, the new measures still provide a way out to major polluters, as BlackRock has still not taken any steps to exclude climate laggards in the short term. There is not enough time left regarding our climate goals for engagement strategies directed at companies in the fossil fuel sector that have no viable net zero transition pathway, such as companies actively expanding fossil fuel exploration and production. Over the next few years, concrete steps will need to be taken by BlackRock as it is highly unlikely that continuing to shrug off responsibilities will really lead to the 'tectonic shift' in investing required in the short term. Embarking on a net zero pathway has immediate implications for BlackRock, as fossil fuel production needs to quickly wind down. The 2020 Production Gap Report, published with the UNEP, shows that, alarmingly, major fossil fuel producing countries are still planning for an average annual fossil fuel production increase of 2%. By 2030, this would result in more than double the fossil fuel production than would be consistent with the 1.5 deg. C limit. It is therefore highly inconsistent for financial actors which have committed to become net zero by 2050 to continue to invest in major fossil fuel developers in 2021, and especially companies involved in unconventional oil and gas development. As outlined by recent research by HSBC, 'it will be difficult for net zero committed institutions to justify holding oil and gas issuers in net-zero portfolios'. It is well past time for BlackRock to exit any company planning to develop new fossil fuel reserves and infrastructure and not complying with a robust fossil fuel phase out plan. The tar sands sector is a key example of a sector that is clearly inconsistent with keeping global warming below 1.5 deg. C, as tar sands reserves are a ticking time bomb regarding climate objectives. Our research reveals that BlackRock is a massive supporter of the tar sands industry, with $75 billion of current holdings in 30 major tar sands production companies planning on developing new reserves. To be consistent with its net zero commitment, BlackRock will need to step up its ambition and stop fueling the tar sands sector and exacerbating the huge negative impacts on climate and human rights linked to its development.
[en] In May 2020, Reclaim Finance publishes a report revealing that the European Central Bank's corporate asset purchases significantly finances all fossil fuels. based on its study of the ECB's list of corporate holdings (CSPP and PEPP), Reclaim Finance shows that quantitative easing strongly benefits to firms from the most polluting sectors (fossil fuels, air and automobile sectors...). Titled 'Quantitative easing and climate: The ECB's dirty secret', the report shows that the principle of market neutrality leads the ECB to support companies, which because of their massive activities in the fossil fuel sector, are a stumbling block for the EU to achieve its own climate targets. Reclaim Finance calls on Christine Lagarde and the Eurosystem governors to put an end to asset purchases of fossil fuel companies. The main points of the report: For several years, and even more today in the context of the Covid-19 crisis, the ECB massively uses quantitative easing to fulfill its missions. With the Eurosystem banks, it held 2783 billion euros in assets at the end of March 2020 and planned on buying 1100 billion in a single year. 63% of the ECB's corporate asset purchases go to high-carbon emitters, and the asset purchases decided in response to the Covid-19 pandemic alone could finance high-carbon emitters to up to 132 billion, therefore crushing hopes for a 'green recovery'. The ECB bought assets from 38 fossil fuel corporations. Of these corporations, 10 are active in the coal sector for a total installed power capacity of 66 000 MW, more than all of the French nuclear reactors. Major oil and gas companies, including Shell and Total, that plan on increasing their productions respectively by 38% and 12% from 2018 to 2030, are on the list of assets bought by the ECB. Shell's case is especially problematic. It is one of the 4 enterprises of the ECB's portfolio active in shale oil and gas and could multiply its production in the area by 12. In May 2020, Reclaim Finance publishes a report revealing that the European Central Bank's corporate asset purchases significantly finances all fossil fuels. Four months later, the NGO reveals in a new memo that companies supported by the ECB greatly contribute to fossil gas expansion in Europe and worldwide. Titled 'Quantitative easing and climate 2: Fueling the fossil gas frenzy', the document shows that the ECB's asset purchase lock us in a fossil dependent world by supporting companies that greatly contribute to the expansion of the fossil gas sector. Reclaim Finance calls on Christine Lagarde and the Eurosystem governors to put an end to asset purchases of fossil fuel companies. The NGO underlines doing so in a few years would mean favoring the continuous development of the fossil gas sector. The main points of the report: The ECB's quantitative easing supports 24 gas companies operating 123 gas power plants, extracting gas from 48 sites in Europe, and operating 96 gas pipelines and 97 LNG (Liquefied Natural Gas) terminals worldwide. Companies supported by ECB purchases plan on building 62 new gas infrastructures, with 4 companies responsible for 45 projects: Total, Shell, Engie and Enel. Total and Shell alone are developing 36 projects.
[fr]Ce rapport etudie la liste des actifs detenus par la BCE au titre des achats d'actifs d'entreprises (CSPP et PEPP) et montre que le quantitative easing beneficie aujourd'hui fortement aux entreprises des secteurs les plus polluants (energies fossiles, aerien, automobile...). Le BCE a achete les titres de 38 entreprises des energies fossiles. Parmi elles, 10 entreprises sont liees au secteur du charbon, pour une puissance totale installee d'environ 66 000 MW, soit plus que l'ensemble des reacteurs nucleaires francais en service. Le charbon n'est pas le seul probleme: des majors petrolieres et gazieres, dont Shell et Total, qui prevoient d'accroitre leurs productions de 38 et 12% de 2018 a 2030, figurent dans la liste des titres achetes au titre du CSPP et PEPP. Shell prevoit meme d'exploiter des reserves de petrole et gaz de schiste atteignant 12 fois sa production actuelle dans le domaine. Au-dela des energies fossiles, le portefeuille de la BCE fait la part belle aux activites a forte intensite carbone. 63% des actifs achetes seraient ceux d'entreprises polluantes, soit jusqu'a 132 milliards de financements polluants pour les seuls rachats lances en reponse a la crise du Covid-19. Une semaine avant la reunion des gouverneurs de la BCE du 10 septembre 2020, les nouvelles recherches de Reclaim Finance montrent qu'attendre 2022 pour conditionner le quantitative easing nous enferme dans un monde dependant au gaz naturel. En effet, les 1700 milliards d'euros d'actifs achetes par la BCE en 2020-2021 continueront a soutenir la croissance du secteur gazier et de ses grands developpeurs de projets.
[en] The new Sustainable Taxonomy aims at identifying activities that contribute to the ecological transition, in accordance with European climate and environmental objectives. While the eagerly awaited regulation is almost operational and received the European Parliament's approval, the European Commission is considering the reintegration of natural gas and nuclear energy in the taxonomy. Looking closely at the chronology of events and at the European transparency register, Reclaim Finance sheds a light on the intense gas and nuclear lobbying that led to these dangerous last-minute discussions. Key findings: - It took two years of work to exclude fossil gas and nuclear from the new European sustainable taxonomy. Now, backdoor dealings and special procedures could lead to their integration. - 189 players from the fossil gas and nuclear sector mobilize 825 lobbyists -450 full-time equivalents (FTE)- to put pressure on the European Commission. They are spending between Euros 71.4 million and Euros 86.6 million a year to influence EU decisions. This is a conservative estimate as the EU transparency register is voluntary and non-binding, thus allowing unreported and under-reported lobbying. - The European Commission largely listens to fossil gas and nuclear lobbyists. Between January 2018 and July 7, 2020, EU officials held 310 meetings, 52 between the publication of the final report on the taxonomy in March 2020 and July 7, 2020. Since the taxonomy process started, in 2018, they had 2.36 meetings a week with them. The frequency of these meetings slightly increased after the last report was published in March 2020 from 2.28 to 2.86 times a week. - The fossil gas lobby is especially vast and powerful. It gathers 167 entities that spend between Euros 68.8 million and Euros 82.9 million each year and devotes 759 employees-419 FTEs-to promoting the sector as a 'bridge' energy.
[en] A new report from Reclaim Finance and seven partner NGOs reveals that the Powering Past Coal Alliance (PPCA) has failed to trigger a wide coal exit movement. The analysis of the progress of the 111 PPCA members shows that many of them are failing to phase out coal support. Among these members, financial institutions stand out since the vast majority continue to finance coal. Created in 2017, the PPCA has grown rapidly, bringing together states, local governments, financial institutions, and companies. However, while some of its members are planning to shut down their power plants in line with the Paris Agreement - i.e. by 2030 in the EU and OECD and 2040 worldwide - others have put this ambition on hold. In fact, only 2 out of the 23 financial institutions in the alliance have adopted a policy that would allow them to exit coal within these time frames. In contrast, 18 - including Aviva, L and G, CalPERS and Swiss Re - do not restrict funding to companies developing new projects and 8 - including Schroders - have no minimum criteria limiting their support to the sector. The PPCA's financial members are found to have $38 billion invested in companies significantly involved in the coal sector. Moreover, the report points out that the foundation of the alliance - the PPCA declaration and Finance Principles - itself contained major loopholes that allow its members to satisfy its criteria while remaining important players in the coal sector. The limits of the initiative also stem from the behavior of certain member states, including its co-chairs Canada and the United Kingdom. Indeed, while Canada will close all its power plants by 2030, it is increasing its coal exports and plans to open 13 new mines in Alberta and British Columbia, two regions that are also individual members of the Alliance. On the other side, the United Kingdom is considering the development of a new coal mine. Similarly, Mexico is planning to open new coal-fired power plants, Germany will continue to use them until 2038 and Senegal did not adopt any phase-out date. The report presents recommendations for the PPCA to achieve its objective of becoming a vehicle for a global exit from coal. The PPCA must demand that its members exit the entire coal sector - including mines and infrastructure - to consider the specificities of financial actors. Its members need to align with a coal exit timetable compatible with the Paris Agreement, which means for financial institutions adopting coal exit policies following the Coal Policy Tool criteria.
[en] Reclaim Finance has published the first edition of a scorecard on leading asset managers' climate commitments, focusing on their approach to the coal sector. The report compares 29 asset managers, with a focus on the European market. The authors reveal that despite 16 asset managers holding long-term climate commitments, nearly all are failing to take the first step to making them a reality: exiting coal. This report was authored by Reclaim Finance in partnership with Re:Common, the Sunrise Project and Urgewald. Out of the 29 asset managers' policies assessed, not even half have adopted a public policy to phase out coal, despite 13 of them being members of the Net Zero Asset Manager Initiative (NZAMI) and four of the Paris Aligned Investment Initiative (PAII). Even worse, Vanguard, DWS and Allianz GI, whereas they are signatories to the NZAMI principles do not even have adopted any public coal policy. If half of the asset managers are publicly recommending that companies adopt Paris-aligned strategies and almost half of them also publicly state that they might take voting or divestment sanctions regarding climate issues, only two (Aviva Investors and Aberdeen SI) have started to specify the conditions for these sanctions to take place. But even existing coal exclusion policies are far from robust. The UNEP Production Gap report shows fossil fuel production must decrease by 6% annually until 2030 but only 6 of the 29 asset managers assessed are excluding companies with coal development plans whereas these companies are one of the biggest threats to climate. Another key problem is the partial coverage of coal policies: they apply to a very limited portion of their total portfolio. When looking at their 'passively' managed assets, which is a growing issue for the climate, the problem is obvious: only three asset managers, managing rather small amounts of 'passive' investments, apply their coal policy to all or most of their 'passive' investments. Overall, 18 asset managers do not have public rules to exclude coal from most of their 'passive' investments. The problem is similar with mandates: only eight asset managers assessed apply their exclusions by default to their investments via mandates. Altogether this means concretely than less than 25% of the total combined assets of all managers are currently covered by coal exclusion criteria. To remedy this situation, asset managers must immediately divest from companies developing coal projects and start divesting now from coal companies for a complete exit by 2030/2040. By that, the report specifically advocates asset manager to apply such recommendations to their whole portfolio. This also means dealing with the growing issue of 'passive' investment.
[en] With the Covid-19 crisis and its health, social and economic consequences, 2020 has demonstrated the urgent need to act to support the development of more just, united and sustainable societies. Unfortunately, the long-awaited leap has yet to come. As the world will need to decrease fossil fuel production by roughly 6% per year between 2020 and 2030 to follow a 1.5 deg. C consistent pathway, it is crucial that financial players put an end to their support to fossil fuel companies. They should both stop any support to coal and act with zero tolerance towards the companies expanding the most climate-damaging sectors, such as shale oil and gas. One year ago, on January 14, Larry Fink announced BlackRock was finally on its way to investing sustainably. The largest investor in the world, with $7.8 tn in assets under management, also published a coal policy, aiming at 'exiting thermal coal producers' but only excluding mining companies with more than 25% of revenues from coal production. To this day, BlackRock still has no policy regarding its investments in other fossil fuels. Reclaim Finance has conducted research on BlackRock's holdings (as of October 2020) to verify the real-world consequences of these announcements and assess the investor's exposure to the coal sector. Unfortunately, results show that even with this new policy, BlackRock remains a massive investor in coal companies and even in companies planning new coal projects, despite research showing that such projects are incompatible with any serious climate commitment. BlackRock has a major problem with its passively managed investments, which make it widely exposed to coal assets likely to become stranded. They also massively expose it to other fossil fuels, as even the most polluting companies are not excluded from BlackRock's investments. BlackRock's half-hearted steps in 2020 to invest more sustainably have proven to be superficial. Our analysis shows that the action taken is utterly insufficient to truly curb investments in the sector most problematic when it comes to climate change: fossil fuels. 2021 is a critical year for climate action, with new commitments to reduce greenhouse gas emissions expected by private and state actors ahead of COP 26 in Glasgow. As a first step towards the necessary phase-out of fossil fuels investments, BlackRock must immediately step up the ambition of its global coal exclusion policy, by extending its scope to the entire coal value chain and to all its assets.
[fr]Avec la crise du covid-19 et ses consequences sanitaires, sociales et economiques, 2020 a demontre l'urgence d'agir pour soutenir le developpement de societes plus justes et plus durables. Malheureusement, le sursaut tant attendu n'est pas la. Nous savons desormais qu'une baisse annuelle de 6% de la production mondiale d'energies fossiles est necessaire entre 2020 et 2030 pour rester sur une trajectoire 1,5 deg. C. Il est donc crucial que les acteurs financiers mettent fin a leur soutien aux entreprises des energies fossiles. Ils doivent a la fois cesser tout soutien au charbon et acter une tolerance zero envers les entreprises qui developpent les secteurs les plus nefastes pour le climat, tels que le petrole et le gaz de schiste. Larry Fink annoncait il y a un an, le 14 janvier 2020, que BlackRock allait se transformer pour investir plus durablement. Le plus gros investisseur au monde, avec 7 800 milliards de dollars d'actifs sous gestion, publiait egalement une politique charbon, visant a 'desinvestir des producteurs de charbon thermique' mais n'excluant que les societes minieres tirant plus de 25% de leurs revenus de la production de charbon. A ce jour, BlackRock n'a toujours pas de politique concernant ses investissements dans les autres energies fossiles. Reclaim Finance a passe au crible les investissements de BlackRock (a octobre 2020) pour verifier les consequences reelles de ces annonces et evaluer l'exposition de l'investisseur au secteur du charbon. Malheureusement, les resultats montrent que malgre sa nouvelle politique, BlackRock reste un investisseur massif dans les entreprises du secteur du charbon. Ses investissements dans les entreprises qui continuent de developper de nouveaux projets lies au charbon sont egalement eleves, alors que ces projets sont incompatibles avec tout engagement serieux en faveur du climat. BlackRock a un gros probleme avec sa gestion passive, qui l'expose fortement a des actifs charbon susceptibles de devenir bloques - des 'stranded assets'. Ses fonds geres passivement l'exposent aussi massivement a d'autres energies fossiles, les entreprises les plus polluantes de ces secteurs n'etant pas exclues des investissements de BlackRock. Les mesures timides prises par BlackRock en 2020 pour investir plus durablement se sont revelees superficielles. Ces mesures sont insuffisantes pour freiner de facon efficace les investissements dans le secteur le plus problematique en matiere de changement climatique: les energies fossiles. 2021 est une annee cruciale pour l'action climatique, avec de nouveaux engagements de reduction des emissions de GES d'acteurs prives et publics attendus pour la COP 26 a Glasgow. Comme premiere etape vers la fin necessaire des investissements dans les energies fossiles, BlackRock doit immediatement renforcer l'ambition de sa politique globale d'exclusion du charbon, en etendant son champ d'application a l'ensemble du secteur du charbon et a tous ses actifs sous gestion.
[en] In 2020, Total produced 447 units of fossil fuels for every 1 unit of renewable energy. Nonetheless, despite its desire to rename itself Total Energies, the major continues to invest heavily in the development of new fossil energy projects, such as the highly controversial EACOP oil project such as the highly controversial EACOP oil project in Uganda and Tanzania, or in the Arctic. 90% of its capital expenditure remains oriented towards fossil fuels and the trends in its hydrocarbon production could result in an increase of more than 50% between 2015 and 2030. Thus, the way French financial players are adapting their relationship with Total SE, in a context of climate emergency, is a good indicator of the sincerity of their commitments, and of the challenges related to their success. This briefing takes stock of Total SE's climate promises and of the way financial players have treated such a heavyweight in the energy sector until now. It also sketches out possible courses of action. The first follows a global approach that extends across the entirety of financial actors' portfolios and the companies they support. The second follows a sector-based approach aimed at finding immediate solutions for the most polluting sectors, which also turn out to involve the heaviest ESG and financial risks. For an oil and gas company, these are unconventional hydrocarbons - shale gas and oil, oil sands and drilling in the Arctic and deep waters. While acting on the first axis will only end up having an impact after several years, targeting the most polluting sectors makes it possible to meet the scientific imperative of reducing our greenhouse gas emissions by 7.6% every year until 20301. The actions to be taken on both axes must of course be based on science, which stipulates that oil production must be reduced by 4% and gas production by 3% per year by 2030 in order to meet the 1.5 deg. C objective.
[fr]En 2020, Total a produit 447 unites d'energies fossiles pour 1 d'energies renouvelables. Or malgre sa volonte de se renommer TotalEnergies, la major continue d'investir massivement dans le developpement de nouveaux projets d'energies fossiles, comme le tres controverse projet petrolier d'EACOP entre l'Ouganda et la Tanzanie, ou des projets d'energies fossiles en Arctique. 90% de ses depenses d'investissements demeurent orientees vers les energies fossiles et l'evolution de sa production d'hydrocarbures nous amene vers une augmentation de plus de 50% de cette derniere entre 2015 et 2030. Ainsi, la maniere dont les acteurs financiers francais adaptent leur relation a Total SE dans un contexte d'urgence climatique est un bon indicateur de la sincerite de leurs engagements precites, et des defis lies a leur succes. Ce briefing analyse les promesses climatiques du groupe, ainsi que la maniere dont les acteurs financiers ont jusqu'a present traite un tel poids lourd du secteur energetique. Il presente enfin les pistes d'actions possibles. Le premier suit une approche globale qui couvre l'integralite des portefeuilles des acteurs financiers et des entreprises qu'ils soutiennent. Le deuxieme suit une approche sectorielle visant a trouver des solutions immediates pour les secteurs les plus polluants, lesquels s'averent concentrer aussi les plus lourds risques ESG et financiers. Pour une entreprise gaziere et petroliere, il s'agit des hydrocarbures non conventionnels - gaz et petrole de schiste, sables bitumineux et forages en Arctique et en eaux tres profondes. Alors qu'agir sur le premier axe ne pourra produire des impacts qu'au bout de quelques annees, viser les secteurs les plus polluants permet de repondre a l'imperatif scientifique de baisser tous les ans nos emissions de gaz a effet de serre de 7,6% jusqu'en 20301. Les actions a mener sur les deux axes doivent bien entendu etre fondees sur la science, laquelle stipule qu'il faut baisser de 4% la production petroliere et de 3% la production gaziere par an d'ici 2030 afin de tenir l'objectif de 1,5 deg. C.