A major new report from the Carbon Tracker Initiative, an independent financial think tank, argues oil and gas companies could boost market caps by $100 billion by ditching most high risk projects.
At today’s prices, the report found, the seven biggest oil majors’ portfolios would be worth around US$140 billion more if they stuck to projects compatible with a 2°C warming limit.
“A lot of the socially responsible investors we were speaking to wanted to know what an oil company would look like if it was managed in line with a 2°C business model,” said Paul Spedding, the co-author of the report.
“A simple carbon sensitivity analysis shows that oil majors pursuing volume at all costs can deliver lower shareholder value than a more disciplined approach,” said James Leaton, research director at Carbon Tracker.
“That is why financial regulators need to make 2°C stress tests standard practice for the energy sector to help avoid companies wasting capital.”