Investors challenge fossil fuel companies to disclose carbon asset risks

April 17, 2015

UCF is one of 62 institutional investors calling on the SEC to require better climate risk disclosure by fossil fuel companies. As sustainable and climate-friendly sources of energy become more available and desirable, the current business model being used by many fossil fuels companies — which assumes fossil fuel consumption will continue to increase — creates significant risk for investors in these companies.

According to Ceres, “Renewable energy accounts for the majority of new electricity capacity in recent years due to dramatic declines in cost. In fact, of the $10 trillion projected investment in power generation through 2035, 71% is expected to be in clean energy.” However, many oil and gas companies continue to operate as though fossil fuel demand will remain unaffected. This heavy financial reliance on traditional forms of energy not only presents a carbon asset risk but limits capital from being used on much needed low-carbon projects. 

The hope is that more transparency will encourage fossil fuel companies to examine their current investment strategies and adjust to meet future projections of fossil fuel reliance, as people transition to more climate friendly products — as well as redirect this funding into less carbon intensive initiatives. 

For the full story on the letter to the SEC, click here. To read more about Carbon Asset Risks click here.

 
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