New Upstream Oil-Gas Projects Not A Possibility Anymore

The Net Zero Asset Owner Alliance- NZAOA stated on March 29 that it anticipates its members making no fresh direct investment in upstream oil and gas infrastructure projects when it comes to new fields as part of its endeavours to keep global warming in check.

The group, whose members are in control of $11 trillion in assets, opined that the requirements happen to be very stringent and also reflect a scientific consensus that is looking to transition the worldwide economy away from fossil fuels.

The requirements are part of a position paper that lays out expectations for companies, members, and investors, as well as for policymakers, from stewardship to pricing of carbon, and also provides a roadmap for the world economy to disassociate from oil and gas.

The alliance is also planning to call on companies across the oil and gas sector as well as those who use fuels to set themselves science-based objectives so as to lessen their carbon emissions and also execute plans when it comes to transition as countries of the world push to stall global warming to a limit of 1.5 degrees Celsius over and above the pre-industrial levels.

These objectives should not only take into account the company’s direct emissions, like diesel generators on an offshore platform, but also the ones that are related to using its own energy and those concerned with its customers’ usage of its products.

In spite of that, the climate-driven non-profit organisations of the likes of Reclaim Finance, Global Optimism, as well as WWF, stated that the guidelines weren’t ambitious enough. According to Christiana Figueres, the founding partner of Global Optimism as well as a strategic advisor to the alliance, the position should have gone further in setting company expectations that are as clear as the expectations for investors, which is no new investment in oil and gas fields as well as other infrastructure that happens to be carbon-intensive.

Reclaim Finance happens to be of an opinion that there is no room for new oil and gas field investments when there is a 1.5-degree scenario and has called the entire proposal a giant leap backward.

As of now, the world’s major oil and gas companies have set themselves varying targets in order to reduce the greenhouse gas emissions from their operations and make use of the products that they are selling.

As per Patrick Peura from Allianz Investment Management as well as a co-lead of the alliance engagement track, the white paper is not placing the blame on just one stakeholder but taking into account the entire ecosystem as other actors that need to be moving in line with the order so as to raise the ambition and also get going on the 1.5-degree Celsius track.