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October 4, 2023

Editor’s note: fossil fuel initiatives and social taxonomies

Sultan al-Jaber
COP28 president-designate Sultan al-Jaber says he is in discussions with more than 20 companies involved in up to a quarter of global oil and gas production to agree on greenhouse gas emissions cuts (Photo: Christopher Pike/Bloomberg)

The latest edition of our Sustainable Views newsletter

Dear reader,

Are you readying yourselves for the pre-COP announcements coming our way? 

The president-designate of this year’s UN climate conference has already said that a new initiative involving fossil fuel companies will be launched at the summit, which will be held in Dubai in less than two months.

So far, the so-called Global Decarbonisation Alliance that the COP28 team pre-announced in May has a broad 2050 net zero goal. More recently, Sultan al-Jaber, who also heads the Abu Dhabi National Oil Company, told the Financial Times that he’s in discussions with more than 20 companies involved in up to a quarter of global oil and gas production to agree on greenhouse gas emissions cuts.

He said that he was “applying pressure” on other companies to join the initiative, urging the oil and gas industry to prepare for the “phase down” of fossil fuels, and avoid being seen as fighting decarbonisation efforts.

How do these calls and initiatives leave you? Surely – and logically – we can all espouse the message. But are you hopeful it will be accompanied by sufficiently biting targets? Let me know.

There also seems to be a crescendo around another topic – one that, just as oil companies driving a climate summit agenda, has been causing a few sneers: the creation of social taxonomies. In particular, the creation of an EU-wide one.

Comments from investors, businesses as well as policymakers we have been talking to since launching Sustainable Views have varied from considering social taxonomies as a necessity in the just transition, to being a utopian and time-wasting exercise.

More recently, however, experts have told Alex that the idea of codifying what activities should be considered socially valuable (and which should not) is gaining new energy. 

In fact, Antje Schneeweiß, at German church investor group Arbeitskreis Kirchlicher Investoren, who was involved in the advisory work for the EU social taxonomy last year, says that AKI will soon publish a statement supporting the initiative, which will be backed by “major European organisations”.

In France, investor groups are convening on the creation of a social taxonomy for their members, and raising the interest of their peers in Spain and the Netherlands, as well as Germany, says one of the organisations involved.

Meanwhile, countries like Georgia and Mexico have already come up with sustainable taxonomies that include social objectives. 

There are huge social implications linked to the green transition, which governments and policymakers should consider as they tackle climate change. Is a social taxonomy a good way to go about it? Do share your views.

Elsewhere, today we look at two interesting reports. One, by the Net-Zero Asset Owner Alliance, predicts that the rollout of clean technologies could provide investment opportunities of up to $275tn by 2050.

The other, by think-tank InfluenceMap, finds that anti-ESG policy promoted by US House Republicans is being influenced by fossil fuel, financial and cross-sector groups.

Until tomorrow,

Silvia

Silvia Pavoni is the editor of Sustainable Views

 

A service from the Financial Times