The
GOOD, the BAD and the UGLY Europe's Big Polluters and How to Divest from Them
he movement for divestment from fossil fuels is growing, and its growth in recent years is impressive. I cannot overstate the importance of divestment as a means of campaigning to reduce the carbon emissions that pose a threat to our world. It gives the struggle against climate change a tangible target and a clear goal, making it possible for everyone to play a specific part. The aim of divestment is to withdraw investments in carbon companies’ assets and reinvesting these assets in sustainable projects that are durable and future-proof. The idea that investing in fossil fuels is socially acceptable is finally becoming a thing of the past. A multitude of cities, companies, organisations, pension funds and financial institutions have already begun to divest, with enormous success. All of this is thanks to everyone who has played a
Welcome
part, including various non-government and non-profit-making organisations and civil societies who are empowered with means of applying public pressure through protest and often work together with political organisations. We as European Greens are proud to have been an active part of this movement. Every time a new organisation divests, a clear political message is sent and we bring more political pressure to bear on our policymakers to continue in this direction. However, recent studies have again shown us that much more must be done. We know that if we continue to extract and consume fossil fuels at present levels, we will definitely not be able to achieve the goal of an average temperature increase under 2°C.
With this brochure, we want to introduce you to the biggest carbon emitters in Europe. They need to be stopped and that should be a major target of divestment campaigns. We will show you what you can do as European citizens in order to continue pressure and ultimately achieve a true energy shift. Let’s work on this together!
Reinhard BĂźtikofer
Co-Chair of the European Green Party and Member of the European Parliament
Divestment: What is it? Divestment from fossil fuels is a concept that has gained a lot of momentum over the past years. The basic premise is the removal of funds from the fossil fuel industry by selling off stock shares and reinvesting these funds in sustainable projects. Divestment campaigning aims to delegitimize fossil fuel companies, and their business model, which is incompatible with a future worth living in. The logic on which this idea is based is in essence quite simple – as Bill McKibben, the founding father of the movement for divestment from fossil fuels put it: “If it’s wrong to wreck the planet, then it’s wrong to profit from that wreckage”. Further investment in fossil fuels makes no sense, either in economic or ecological terms. We know that global warming is progressing at an alarming rate. In September 2016, Oil Change International published a study where they warned that the currently active oil gas and coal fields cannot be exploited to depletion if we are to remain below the 2oC threshold; to say nothing of the reserves and new sites not even being exploited yet.
In view of this fact, further expansion of the fossil fuel industry must be stopped. Furthermore, the value of these fossil fuel companies will continue to diminish over time once they cannot exploit the rest of their reserves. The British bank HSBC calculated that fossil fuel companies will lose 40-60 percent of their value if the goal of limiting global warming to less than 2° is implemented consequently. A study by the London school of Economics stated that climate change could eliminate up to $24 trillion of carbon-intensive assets. It is therefore in the best interests of investors to divest and invest somewhere else where their assets increase in value. Everyone can play their own individual part, but the fossil fuel producers are the ones with the power to make the real difference on a global scale. By targeting financial institutions, investment funds, public organisations and cities, great efforts have been made and the call for divestment is steadily increasing. At the beginning of 2017, around 700 institutions worth almost $5.5 trillion have divested fully or partially from fossil fuels. Among those are a range of universities and large cities, including Oslo, Berlin, Stockholm and Oxford. The Norwegian pension fund, one of the biggest investors globally, has decided to remove coal and tar sands investments from its portfolio. Huge private companies such as Allianz AG,
Nordea Bank, and Axa Insurance have also reported (partial) divestments. In addition, faith organisations such as the Church of Sweden and the Lutheran World Federation have done the same, as have professional organisations such as the British Medical Association. Even the Rockefeller Foundation has divested from Exxon Mobil. The Rockefeller family once founded Standard Oil, the biggest oil company in history, which later spawned Exxon Mobil. They state that they see no further future in the fossil fuel business.
Recent research has shown that cumulatively, throughout history, 90 companies are responsible for 20% of the world’s carbon emissions since the industrial revolution. They are a big part of the root cause and they must be compelled to bring their destructive business model to an end. The more organisations that divest and the more high-profile they are, the more political pressure we can exert and push our societies further away from fossil fuel investments.
European Carbon Majors We have compiled a list of European Carbon Majors, companies that represent a direct threat to our climate should their activities continue unhindered. All of these nine companies, from nine different European countries, are in the top range of European companies with the largest coal, oil and gas reserves. They show that we have divestment work to do all over Europe. This list provides information on these companies’ activities and current policies. The companies are listed here in alphabetical order.
The main sources for the figures on this list are the Carbon Underground 200 list and the results of research conducted by Richard Heede, a renowned climate researcher. The Carbon Underground 200 list is a contemporary list of the fossil fuel reserves of companies worldwide and is used as a guide for investors. Mr Heede has calculated the total CO2 emissions over the time period between 1985 and 2013, and exposed the primary culprits for global warming worldwide. His revolutionary results have shed new light on the issue.
This list provides information on these companies’ activities and current policies
United Kingdom
BP
6.33 gigatons of CO2 in coal and gas reserve
Responsible for the
Deepwater Horizon platform
oil spill disaster Responsible for
2.4%
of global carbon emissions
between 1985 and 2013
BP United Kingdom
BP plc, formerly known as British Petroleum, is a British multinational extraction company whose primary focus is fuel and energy production, lubricants and petrochemicals. It was founded in 1908 and has become one of the global carbon majors over the years.
heir vast range of activities extends from extraction to trading. In 2015 alone, BP was active in more than 25 countries across the globe. Their reserves have the potential of 6.33 gigatons of CO2 in coal and gas production. Furthermore, BP is responsible for one of the biggest environmental disasters to date, namely the oil spill at the Deepwater Horizon platform on April 20, 2010. Richard Heede’s research has shown that BP, like Royal Dutch Shell, is one of the top 8 global carbon majors. They are the 4th most impactful polluter in terms of cumulative impact on world carbon emissions between 1985 and 2013. In effect, they are responsible for 2.4% of total global CO2 emissions cumulatively since their founding. Although BP is active in some areas of renewable energy, it’s vastly insufficient, especially considering the company’s previous focus on renewables. As of today, their activity is limited to wind and biofuel energy in terms of renewable sources. Although BP invested greatly in renewable energy research in the 80s and 90s, this renewable program has slowly been smothered and their main focus has now
Their slogan “Beyond Petroleum” could not be further from the truth shifted back to fossil fuels. Although they used to spend close to $8 billion on research and development, most of the assets and technologies generated by their program have been sold off. Furthermore, according to research conducted by The Guardian, most of the knowledge garnered from their research has not been publicly released. Their slogan “Beyond Petroleum” could not be further from the truth.
Italy
ENI
Reserve of
2.5
gigatons of CO2 Produces
million
1.76 per DAY
barrels of oil
ENI is campaigning for
deep sea
drilling
and exploration of new fields
ENI Italy
ENI is a large Italian multinational oil, coal and gas company based in Rome. It was originally founded in 1953 and is mostly owned by the Italian state. The Italian government holds 30% of ENI’s stock, effectively giving them a so-called “golden share” and making them the primary shareholder of the company.
NI or “Ente Nazionale Idrocarburi” (State Hydrocarbons Authority) focuses primarily on petroleum, natural gas and petrochemicals. However, it is also active in other sectors such as contracting, nuclear power and refinement. Their reserves amount to 2.5 gigatons of CO2 emissions in coal and gas production. In total they produce 1.76 million barrels of oil per day and their activity covers 69 countries worldwide. In terms of renewables, ENI has been balancing on two legs. On one end, they have recently announced that they will be investing €1 billion in renewables and research and development over the next three years. At the same time, they have pushed further into deep sea drilling. In March 2016, 2 months before
ENI is also active in other sectors such as contracting, nuclear power and refinement
the announcement of their investment plans, they opened the new Goliat oil platform in the Barents Sea off Norway. This platform alone aims to produce approximately 100,000 barrels of oil per day. So although efforts are being made, the determination to increase production is still very much present.
Switzerland
Glencore
Reserves of
8.69 gigatons of CO2 Continuously pushing a further
expansion offossil fuel activities Active in over
50
countries despite its young age
Glencore Switzerland
Glencore, founded in 1974, is a relatively young mining and trading company and originated in Switzerland. Despite being relatively young, Glencore has grown fast, quickly becoming a multinational behemoth.
urrently, Glencore is active in over 50 countries globally. In Europe alone it has over 30 active exploitation facilities, including coal extraction sites, zinc roasting plants and manufacturing facilities. In only a few decades Glencore has grown enormously, becoming the largest company in Switzerland and one of the world’s biggest polluters. According to the latest Carbon Underground 200 data, their reserves total 8.69 gigatons of CO2. To put this into perspective Glencore has larger reserves than Total and Royal Dutch Shell combined! It may not have been as impactful in comparison to other companies on this list due to its young age, but it is catching up fast.
Furthermore, we need to take into account that despite their obligatory efforts to meet climate goals, their actions speak differently. Glencore keeps pushing the fossil fuel market and their executive branch has recently asserted that renewables will not be competitive with fossil fuels until at least 2050. They are using this to support their continued investments in fossil fuels, despite an internal call from investors for Glencore to change direction.
Glencore has larger reserves than Total and Royal Dutch Shell combined
Greece
Public Power Corporation
50 9.44 Average production of megatons of CO2 per year from coal
Reserves of
gigatons of CO2 emissions from coal
split in 2006
in PPC Renewables
PPC
Public Power Corporation Greece
Public Power Corporation (PPC) is the single largest power company in Greece, founded in 1950, with its main offices in Athens. The Greek government holds a majority share in the company. Its original intent was to implement a national energy policy in order to provide electricity to Greek citizens.
n January, 2001, PPC entered the stock market with the government retaining a majority of the company’s shares. Although the Greek energy market is liberalised, PPC holds the majority of the market. PPC is a vertically integrated company and is active on all levels from power generation to transmission and distribution. When it comes to renewable power sources, PPC has acted similarly to RWE in Germany. In 2006 PPC created a subsidiary company, wholly owned by PPC, and named it Public Power Company Renewables S.A.; this company inherited all renewable activities. PPC itself however still
PPC has the largest coal reserves of all European companies produces an average of 50 megatons of CO2 yearly, without a clear trend of decline. Furthermore, PPC actually has the largest coal reserves of European companies, estimated at 9.44 gigatons in potential CO2 emissions. It is essential that these resources remain below ground.
Spain
Repsol
76%
Recently increased its production capacity by to
700,000 barrels per day
Sold offshore wind assets to further
focus
on fossil fuels Reserve of
1.03
gigatons of CO2
Repsol Spain
Repsol is a Spanish integrated and multinational energy company based in Madrid. It was founded in 1927 as CAMPSA, a state-owned petroleum company. Throughout the past century it has expanded its activities, becoming the Repsol Group in 1987. In the meantime Repsol has been largely privatized.
oday it is active in over 40Â countries around the world, with most of its primary upstream activities in North and Latin America. In terms of fossil-fuel-based activities, there are no signs of any slowdown. On 8 May 2015, Repsol acquired the Canadian multinational oil and gas company Talisman Energy for almost $13 billion and formed Repsol Oil & Gas Canada. Since this acquisition, production has sky-rocketed, increasing by 76% to up to 700,000 barrels per day. Their reserves total 1.03 gigatons in CO2 in potential coal and gas emissions.
Repsol is also active in terms of clean energy sources, but the outlook is not positive. Recently the company announced the sale of its offshore wind energy assets in the UK and a cut in spending of 38%, all without altering its company profile. Combined with an aggressive expansion that culminated in the acquisition of Talisman Energy, it is clear that this company is not heading in the right direction.
In terms of fossil fuel based activities, there are no signs of any slowdown
The Netherlands
Royal Dutch Shell
4.99 72 gigatons of CO2
CO2
megatons of
in coal and gas reserve
emissions in 2015
Responsible for
2%
of global carbon emissions
between 1985 and 2013
Royal Dutch Shell The Netherlands
Royal Dutch Shell is an international oil and gas company that originated in the Netherlands. Shell has been in existence for over a century; founded in 1907, it has subsequently grown to become one of the world’s biggest extraction companies.
he core business of Royal Dutch Shell consists of exploration and production, oil products, chemicals, gas and power generation. A small section of its power generation activities consists of renewables, primarily in the form of biofuels and wind. Over the years, Shell has expanded its activities from pure extraction to refinement and trading.
Shell alone is responsible for nearly 2% of global carbon emissions per year
In effect, Shell is the largest oil company in Europe and holds reserves that could emit approximately 4.99 gigatons CO2 from coal and gas production if they were to exploit them. In 2015, they produced 72 megatons of CO2. According to Richard Heede’s recent study, Shell alone is responsible for nearly 2% of global carbon emissions per year! Recently, Shell has announced a shift in vision and founded a new branch called ‘New Energies’. While this initially sounds good, it must be remembered that Shell pumps approximately $30 billion in oil and gas. The annual spending level of their new division, roughly $200 million, represents less than 1% of their total expenditure, and of course Shell’s continued hard focus on deep sea drilling is anything but sustainable.
In other words, it is a small step in the right direction, but much more needs to be done to curb Shell’s carbon profile. The only way to do this is by truly divesting and promoting renewables.
Germany
RWE
144.4 megatons of CO2
emissions output in 2015
Biggest c arbon emitter in Europe in terms of yearly carbon releases
split
RWE holds all fossil assets
in Innogy
RWE
RWE Germany
RWE Group, formerly known as RheinischWestfälisches Elektrizitätswerk AG, is a German electric company founded originally in 1898. RWE itself is split into two large sections, namely RWE Generation and RWE Supply & Trading.
WE Generation takes care of power generation, with a current capacity of over 40,000 Megawatts. The Supply and Trading section takes care of the downstream activities and trades a wide range of energy products from coal and gas to biomass and oil. Recently, RWE Group has undergone major changes. Due to the German government’s action to curb CO2 emissions, RWE has had to shut down multiple facilities and the company was split up in response. The subsidiary Innogy is now a separate entity responsible for their renewable energy sources. Innogy was created on 1 April 2016 and has been active on the Frankfurt Stock Exchange since 7 October 2016.
The issue here, of course, is that RWE remains and most likely will further invest in fossil activities when it can. Being the main shareholder of Innogy, it will also benefit from potential profits, which it in turn could reinvest in RWE. RWE itself produced 144.4 megatons of verified CO2 emissions in 2015.
Due to the German government’s action to curb CO2 emissions, RWE has had to shut down multiple facilities
Norway
Statoil
gigatons of CO2
1.83 Reserves of
in coal and gas reserve
Activities in
shale gas Looking to
expand offshore
activities
primarily in the Barents Sea
Statoil Norway
Statoil is a multinational oil, coal and gas company with headquarters in Norway. The Norwegian company is similar to the Italian ENI, in that the Norwegian government is the primary shareholder of Statoil. It holds 67% of available company shares.
tatoil is active in 37 countries and is aiming to expand its activities, particularly in resource procurement. Its main activities include exploration and production of natural gases, including shale gas, both in Norway and abroad. Being a vertically integrated company, it also deals in trading and provides pipeline services. With a potential production output of 1.83 gigatons of coal and gas CO2 emission, it is also one of the European Carbon Majors.
Its alternative energy activity is limited to research and development, carbon capture and wind energy. Furthermore, the company is looking to further expand its offshore exploitation activities, as it announced in August 2016 with its declaration of continuing plans for exploitation in the Barents Sea.
The company is looking to further expand its offshore exploitation activities
France
total
Reserves of
gigatons of CO2
3.83 One of the 6 global
Super
Carbon Majors
Owner of the oil tanker
Erika
which sank off the French coast in 1999 leading to an
environmental
disaster
Total France
Total is a French oil, coal and gas company founded in 1924. It is currently one of the largest extraction and production companies in Europe and beyond. Their activities cover almost the entire range of oil and gas production, refinement and trading, including crude oil and gas exploration, transportation, power generation, refinement and product trading.
Total is one of the top polluters, not only in the European Union, but globally otwithstanding a large production capacity and reserves that could effectively release 3.83 gigatons of CO2 in coal and gas emissions if everything was exploited, Total is one of the better performing companies in terms of the shift to renewables. The French company has recently acquired Saft, a high-tech battery production company, in order to boost its renewables portfolio. In combination with its 57% share in the US-based Sun Power, it is starting to make the shift towards renewables.
However, we cannot forget that despite this acquisition, Total remains one of the six so-called Super Majors and can be named in the same breath as Royal Dutch Shell, Exxon Mobil, BP, Chevron and Conoco Phillips. More progress is clearly yet to be achieved, especially as the company is one of the top polluters, not only in the European Union, but globally. Overall it is still the 5th largest polluter in Europe, and needs to make giant strides to curb its emissions and truly make a difference.
#DivestEurope
Do you know another of Europe’s big polluters? Do you have information that you want to share regarding Europe’s carbon majors? Or is a fossil fuel company in your locality affecting the environment where you live? We want to hear from you! The more public scrutiny these companies get, the stronger the pressure for them to change their business model!
Reach out to us using the hashtag #DivestEurope on social media, or mention us on Twitter, Facebook or Instagram (@europeangreens). You can also e-mail us on info@europeangreens.eu. We will then check out the data and publish the information. We look forward to hearing from you!
#DivestEurope
How to get active Now, what can we do? Raise awareness about the destructive effects of buying and holding shares in fossil fuel companies! This can be done in many different ways: first, check your bank savings, pension plan or health insurance. Ask your bank or insurance company whether they invest in the fossil fuel sector. You can also go one step further: ask your local or city council or your occupational pension company whether they know where they have invested their money and whether fossil fuel companies are part of their portfolio, either as single shares or via mixed indices. The way to make a real impact is by forcing large institutions to divest. So, think about other institutions that have the financial means to invest and get in contact with them. If they have invested in companies that are destroying the climate, inform them about it. If they seem uninterested or unwilling to divest, step up your efforts and build up pressure through publicly raising awareness, protesting and starting a divestment campaign. There is a whole variety of
options to choose from. From petitions to social media action, from teaming up with local councillors legally empowered to ask for information on investment strategies to public protest in front of the headquarters or at the companies’ specific events. You can write letters to executives or public servants asking them to stop their current course of action and referring to the verified information in this brochure. To specifically target financial support for fossil fuel companies, protest at shareholder meetings, or team up with critical shareholder organizations that might even have the chance to speak on stage in front of the company’s owners. If you are looking for more ideas, read our brochure “A handy guide to divesting from fossil fuels” (online at europeangreens.eu/handydivestguide) or get inspired by other divestment campaigns you can find on the web for example on the gofossilfree.org website.
If you are looking for more ideas, read our brochure “A handy guide to divesting from fossil fuels”
HOW TO IDENTIFY POLLUTERS IN FINANCIAL PORTFOLIOS: Different institutions invest differently. What is of interest for you is the part of their investment that focusses on company shares or corporate bonds. Check this against the list of companies in this brochure and, even better, the most carbon-intensive companies globally in the Carbon Underground 200 list, which can be found on fossilfreeindexes.com. The German NGO Urgewald has also compiled a list called the Global Coal Exit list that includes the companies that help run the coal business, for example by building coal ports or specific transport infrastructures. Very often institutions will invest in so called indexes, mixed bags of different company shares such as EUROSTOXX50. If they do so, check the respective index for what companies it includes. In these cases, institutions would not often have the resources to pick and manage single company stocks separately, but they could invest in a more green and sustainable index. A very useful tool for checking the carbon intensity of some indexes is the Decarbonizer: decarbonizer.co
Where to invest instead? When talking to your financial institutions or other public organisations about divesting, the question of where to invest instead often arises. Fortunately, the alternatives are very varied, and as they will continue to expand, they provide a much more long-term perspective than investing in fossil fuels. Investing responsibly also makes sense economically – the University of Hamburg has found that portfolios with less CO2-intensive assets over-perform by approximately 0.8%. It may not sound a lot, but for investors, it is. In general, there are three approaches to investing more responsibly: Apply so-called exclusion criteria to an existing portfolio of assets; this approach is also called negativescreening. The idea is to exclude specific sectors or businesses based on social or environmental criteria: for example, all companies who make a certain amount of revenue from mining or burning coal, using child labour, selling arms and so on.
Another approach that can be applied – in combination with negative-screening or as a standalone approach – is a positive-screening or so-called Best-in-class. Here, you typically select the best-performing assets from a specific sector (its “top-runners”) according to a specific set of criteria. A typical portfolio or fund is usually a distributed mix of assets from different sectors or industry groups, e.g. materials, energy or information technology. Best-in-class means that you select from each sector the greenest and/or most socially-responsible company assets. Ideally this will also create a positive competition, a race to the top, amongst such companies when they realise that greener action attracts investors. Ethically, the gold standard of responsible investment is definitely impact investing: Here you select assets on the basis not of their comparative but of their absolute performance when it comes to being climate-friendly or socially responsible. While most portfolios are very broad, impact investing is more targeted. It focusses on specific companies or sectors to increase their resources and trigger change. It is hardly surprising that much impact investing is channelled into renewable energy projects, often in developing countries. But there are other sectors that deserve attention as well, including green building and housing, electric mobility, sustainable agriculture, recycling and smart waste management. More info and examples of impact investing funds can be found in the “Useful Links” section below.
Talk to your institution about these alternatives and what they find appropriate. There are a variety of different websites to keep you informed or to pass on to the organisation you would like to divest. They are listed on the following page. The counterargument of not knowing where to invest other than in fossil fuels to is simply non-existent. The number of alternatives is staggering and it is imperative that these industries thrive.
USEFUL LINKS Below is a list with webpages with more information on new developments and extra data. Furthermore, they are the perfect tools to use to convince companies and organisations to shift to low-carbon investment: www.2degrees-investing.org The 2o Investing
Initiative is a global think tank that works specifically to align the financial sector with the 2oC climate goal.
www.banktrack.org – BankTrack is a worldwide
organisation that keeps track of banks’ investment activities. If you want to know what your bank is investing in, this is where you can find out.
www.clean200.org Here is the Clean200 list,
showing the 200 companies worldwide that profit most from making the decision to participate in a clean energy transition. They have been ranked according to their amount of clean revenue and are good examples of divestment successes.
www.divestinvest.org DivestInvest is an online platform where various organisations can pledge to Divest. Currently, they represent 500 organisations worth more than $3.4 trillion. Have you convinced a company to divest? Have them sign up!
www.eurosif.org Eurosif is the largest European lobby group that specifically aims to promote sustainable and responsible investment across Europe. They release their SRI study on a yearly basis, showing the state of play of the investment market. www.fossilfreefunds.org Fossil Free Funds is an online search platform where you can find out whether your money is being invested in the fossil fuel industry, whether via individual investment, retirement funds or elsewhere. www.fossilfreeindexes.com The Fossil Free Index is the one of the leading providers of carbon data, producing among others the Carbon Underground 200 list which is often used by investors to determine where they will avoid investing. www.globalreporting.org The Global Reporting Initiative reports on sustainability and helps businesses, governments and other organisations understand the importance of sustainable investment. www.gofossilfree.org/reinvestment Information and FAQs about reinvestment principles by the world’s leading NGO on divestment from fossil fuels, 350.org.
www.responsible-investors.com Responsible Investors is a subscription-based news platform dedicated to covering responsible investment and sustainable finance for institutional investors globally. www.sustainability.fund Partners for Sustainability offers a database where you can check sustainability funds and their performance. www.unpri.org An online platform displaying information on responsible investment and how to do it in practice, specifically aimed at professionals. www.yoursri.com “Your SRI” is a leading database for socially responsible investment products, offering a wide variety of information on companies, investment products, research documents etc.
#DivestEurope
@EuropeanGreens
www.europeangreens.eu
European Green Party Rue Wiertz 31, 1050 Brussels – Belgium info@europeangreens.eu With the financial support of the European Parliament
Printed in Brussels on recycled paper with vegetable-based inks Designed by www.klar.graphics Š 2017
By pulling money out of fossil fuel companies, we can take a stand against the continuous burning of coal, oil and gas. They are the main drivers of climate change, and pose a huge threat to our planet and a future worth living in. But who exactly are the main polluters in Europe that need to be targeted? How does “fossil fuel divestment" work? And where can we invest our money responsibly? With this brochure, we want to provide you with some answers to these questions.
@EuropeanGreens
www.europeangreens.eu