Big Oil and its allies are attacking the International Energy Agency for forecasting a relatively imminent peak in fossil-fuel demand and the rapid uptake of #renewables
The fossil fuel industry is shooting the messenger, because the message contains the words "stranded assets".
If the banks hear that message, that industry is DONE.
This is HUGE:
"#CreditRating agencies (Moody’s Investors Service, Standard and Poor’s, and Fitch Ratings) have moved almost 180 degrees in their perspective on #FossilFuels during the last 20 years. A consensus has emerged. At one time, the agencies considered fossil fuels to be “credit positive.” Now, individually and in the aggregate, the three major credit rating agencies are issuing clear, specific warnings about the #FinancialRisk of fossil fuels."
@CelloMomOnCars 🙄 I've forgotten how many years ago it was, that insurers were sounding the alarm. It was also around that time the Rockefeller heirs began to divest from #FossilFuels.
@CelloMomOnCars I really hope this precipitates a decline in fossil fuels, I am skeptical though. As shifts away from energy are made there will likely be more demand in agriculture for fertilizers, especially with increased crop pressures due to climate change and fairly constant famines in ever changing parts of the world.
Potentially less profitable though, so hopefully less expansion of extraction.
It's also becoming clear that synthetic fertilisers from fossil fuels are not great in the long run, and farmers are starting to explore better ways to get their yield up.
Which is why the fossil fuel industry is looking to plastics production for their Growth[TM].
As for famines: 40% of the US corn crop is grown to to into cars' gas tanks not feeding people. Where i come from, wasting food like that is called a sin.
Food is just a form of energy. Putting corn into gas tanks is not wasting food, it is putting that energy to use. While Ethanol isn't the most efficient fuel, it is a lot better than burning gasoline directly. The food should not be fuel argument sounds profound, but it really isn't when you think about it a little more.
but that is not the choice. Farmers grow more food than the world needs and it is cheaper than ever. There are political issues with feeding people but not growing corn would not help those.
That sound you hear (faintly, for now), is the turning of valves in the most important pipeline of them all: the #MoneyPipeline.
"Banks in #Europe lead retreat away from oil and gas clients
Trend is expected to pick up amid tighter #climate regulations"
"Private credit managers are doing significantly more fossil-fuel deals now than just a few years ago, as they step into a void left by banks exiting assets they worry pose too big a climate risk."
The financing gap has caused a shift "to less transparent corners of the market." with more than $9 billion in the 24 months through 2023, up from $450 million in the preceding two years.
Despite the fact that private credit comes at "up to 6.5 percentage points over regular bank financing.
What this means:
"From a climate perspective, the riskiest assets are becoming harder to track because their owners aren’t subject to the same disclosure requirements as banks. "
That last one will end the lending to fossil fuel companies.
"A total of US$6.1tn across a range of sectors is exposed to physical climate risks like extreme heat, flooding or rising sea levels, while US$4.9tn is exposed to carbon transition risk, including policy, legal, technology and market changes, the company says."
"The 15th annual Banking on Climate Chaos (BOCC) report looked at how the top 60 #banks in the world are underwriting and lending to over 4,200 #FossilFuel firms.
Since the Paris Agreement to limit global warming was signed in 2016, these banks have financed fossil fuels with $6.9 trillion (€6.4 trillion). The report says $3.3 trillion (€3 trillion) - almost half of this amount - went towards fossil fuel expansion alone."
"The report shows high bank financing for the most climate-damaging fossil fuel practices:
Tar sands extraction
Ultra deepwater offshore drilling
Fracking
The top 60 banks by asset size unabashedly financed harmful practices to sensitive biomes: UniCredit committed $265 million to companies involved in Arctic drilling and Bank of America committed to companies extracting oil & gas in the Amazon biome to the tune of $162 million."
"By analysing global accounting regulations using data on European banks, our team of researchers identified a structural bias in financial models which are required to assess and report risk.
Alarmingly, they tend to judge carbon-intensive assets as less risky than lower carbon ones."
@CelloMomOnCars The article indicates that it's because risk models are based on historical performance.
Which, sort of, well, yes, you can see where they're coming from. But the whole point being that the times are changing, and that every investment ever has a warning that 'past performace is not indicative of future results ... you'd think the banks would have had the intelligence to remove that source of bias!
Yeah, banks were also caught flatfooted in the 2008 mortgage crisis.
These are on the whole interesting times for actuaries and other risk assessors, who have had the rug pulled from under them by the fast-changing circumstances.
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