Most big investors sceptical over oil majors’ green ambitions

Most big investors sceptical over oil majors’ green ambitions

Fewer than a fifth of big investors are confident that oil companies will successfully transition to become greener businesses, despite intense pressure from shareholders to cut carbon emissions and pledges from fossil fuel companies to overhaul their operations.

Many oil companies, including Royal Dutch Shell and BP, have outlined climate transition strategies and ambitions to become net zero businesses over the past 18 months.

However, a survey of 64 institutional investors, with almost $11tn in assets, found that only 17 per cent believe oil groups will transform their businesses to focus on green energy.

“Big Oil’s greening efforts have moved into overdrive but investor consensus remains unconvinced about their ability to reinvent themselves,” said Alastair Walmsley, chief executive of Procensus, the data provider for institutional investors that carried out the research.

Large fund managers, pension funds and activist groups have piled pressure on oil and gas companies over their response to climate change in recent years, with initiatives such as the Climate Action 100+ investor group calling for fossil fuel companies to overhaul how they operate.

But the survey raises questions about why investors are spending so much time, effort and money engaging on the issue if few believe oil companies will change their businesses.

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