Saturday, June 20, 2015

Day of Reckoning for Fossil Fuel Industry - by Mindy Lubber — Forbes Sustainable Capitalism Blog

Alberta tar sands - An aerial view of the tar sands in Alberta, Canada. (Credit: Howl Arts Collective/Flickr) Click to Enlarge.
The fossil fuel industry is facing its day of reckoning – and not just because one of the world’s most prominent religious leaders, Pope Francis, is calling for action.  In fact, the industry’s moment of crisis has been in the making for years, as a variety of trends – from rising production costs to cheaper renewable energy and expanding carbon-reducing rules – have taken stronger hold.

Today, the fossil fuel monolith is under attack from some of the same people it used to count as its closest friends – Wall Street analysts, investors and governments – because fossil fuels are no longer a safe bet.  It has become impossible to ignore the systemic financial risks inherent in the production of coal, oil and other fossil fuels.

Perhaps the most glaring, pressing risks are those associated with carbon reserves still in the ground.  Better known as “carbon asset risks,” the bottom line is that the world’s fossil fuel companies hold at least three times more oil, gas and coal reserves than can realistically be burned without causing potentially catastrophic climate warming.

Almost two years ago, as part of the Carbon Asset Risk Initiative, 75 investors representing $3.5 trillion in assets called on the biggest players in the industry to fess up to these risks – and modify their business plans to deal with them.

Here are some of the key changes we’ve seen in the financial landscape, some of which are the result of escalating investor pressure

Read more at Day of Reckoning for Fossil Fuel Industry

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