The Net-Zero Asset Owner Alliance, a group made up of members from the banking, insurance, and investment sectors with $11 trillion of assets under management, called on its members on Wednesday to align their oil and gas policies to a 1.5-degree Celsius pathway, which cannot be achieved if there are new upstream infrastructure investments in new oil and gas fields.
“On private asset investment in new unabated oil and gas infrastructure, investors, including Alliance members, shall align with credible 1.5°C net zero scenarios. This cannot be achieved if there are new upstream infrastructure investments in new oil and gas fields,” the alliance said in a statement.
The alliance, in which 85 major banks and institutional investors are represented, issued a new position on the oil and gas sector today, expecting its member investors to adopt policies that align with these positions on infrastructure investments, or show how existing policies already align.
The investor group also called on oil and gas producers and their customers to set science-based, absolute- and intensity-oriented emissions targets covering Scope 1, 2, and 3 greenhouse emissions that are aligned with 1.5°C or limited overshoot scenarios.
“How energy is provided and consumed must therefore dramatically change. This includes the need to phase out non-renewable sources like oil and gas in many, if not most, of its current uses,” said Günther Thallinger, Allianz SE Board Member and Chair of the Net-Zero Asset Owner Alliance.
Under pressure from ESG trends and shareholders, some banks have announced in recent months tougher rules on the financing of fossil fuels.
ING, for example, is further restricting financing to the oil and gas industry, reducing the volume of traded oil and gas it finances and no longer financing midstream infrastructure for new oil and gas fields, the Netherlands-based bank said earlier this month. Last year, ING said it would aim to grow new financing of renewable energy by 50% by year-end 2025 and would no longer provide dedicated finance to new oil and gas fields.
Barclays has said it will no longer provide financing to oil sands companies or oil sands projects and tightened conditions for thermal coal lending in an updated policy, which fell short of announcing overall pledges or targets in funding oil and gas.
By Tsvetana Paraskova for Oilprice.com