In 2016, a Danish pension fund had a heart change that is rare in the financial sector. At the time, the academic pension had an $ 1 billion (then approximately € 904 million) invested in the form of a safe financial beans of oil giants such as Exonmobil, Shell and BP. But as the global temperature rises, it was not correct with the company’s board.
Members studied various climate scenarios available at that time and saw that continuous investment in fossil energy was not long -term financial understanding.
“This was primarily real for us to run our decision to divide the region to divide the field,” told DW, the main investor of the fund. He said that this decision was not only achieving “good investment results”, but also “in a responsible way,” he said.
Therefore, the fund evacuated $ 1 billion from the oil companies, in which it was used in a more climate -friendly manner.
This step was on an active statement, but it did not fate the fossil fuel industry. The region still receives an annual trillion dollars in investment and saw a bumper in 2024 with oil, gas and coal usage to a bumper with a global high level. In addition, new exploration licenses are collectively issued in Sweden -sized area.
Even as global temperatures, fossil fuels are associated with emissions, continue to grow, predictions are for greater increase in the region. While many people say that they will invest in renewal, the investor is slow to follow. So, what are they holding them back?
How does oil and gas financing work in 2025
Most of the new energy capacity now comes from solar or wind, which is much cheaper to establish excavation for coal or drilling for oil. But a report by Bloomberg’s market research branch, BNEF found that banks invested in such a renewable infrastructure for every $ 100 (now € 88), putting $ 112 into fossil fuel.
In its latest World Energy Investment ReportThe International Energy Agency (IEA) said that artificial intelligence, data centers, and high energy demand for the desire of energy freedom are investing in renewal. According to the IEA, to meet the goals of agreeing to the global climate dialogue, “Akshaya Shakti needs to double the required annual investment.”
At the same time, “fossil fuel industry is still very beneficial, with high returns in short term,” said Professor Nadia Amili at Climate Finance at University College London.
It is reflected in the investment habits of about 60 largest banks in the world, which injects about 7 trillion dollars in the 2015 Paris Climate Agreement in the fossil fuel industry, according to A. 2024 report Published by many NGOs. In Paris, the world tried to keep global warming up to 1.5 ° C (2.7 ° F) by burning low coal, oil and gas.
Whether in the form of bonds or syndicated loans, which sees the band together to give a joint loan to many banks, many cash from the same financial institutions repeatedly.
Nevertheless, many of those banks are linked to align their investment with low emissions by 2050, with property managers and insurers. Ameli said that in the initiatives like Net-Giro Banking Alliance, commitments, which aim to support banks in meeting Paris Agricultural Goals, are not voluntarily high and not much more yet.
“Even though we see some banks reduce their investment over time, when we look at the total finance, the fossil proves in the fuel field, the amount was always the same.
A major investment company told DW that the money will be invested as long as the demand for fossil fuel is available, saying that it is up to politics, technology and consumers that investors should be shifted to their money.
Partition: Who is doing this – and why?
The division from fossil fuel has increased in recent years. As A non -profit databaseMore than 1,600 organizations, including churches, universities and some large funds, have committed to the industry to fully or partially withdraw their investment.
In case of decline in fossil fuel use, the beach is inspired by the desire to avoid the financial risk of the wealth of the beach because the world is hot, they want to take climate action. This means preventing the burning of oil, coal and gas, which are all responsible for about 90% of planetary heating CO2 emissions.
For academic pension, it meant that a distance of $ 1 billion was covered among the oil giants for renewable energy company like Danish wind power veteran Orsted.
Partition or engagement: What is actually an emission cut?
Some of that money were in bonds, some in shares. The owner of shares means a part of the company. Unlike debt or bonds, where investors lend the interest fee on what they lend, buying shares in the company only exceeds the financial gain.
Stable share ownership is a vote of confidence for a company and it helps in creating market value. Shelladers, in turn, receive a seat on the company’s table, where they can affect the activities.
By that end, the division critics say that instead of taking out investment from fossil fuel companies, it is better to try to have some internal effects to run the company’s course.
But there is evidence of whether division or engagement is more effective, it is very effective.
One American study The ownership of high-furious businesses, including fossil fuel companies, was examined, when the stock ownership was increased by the green funds, the greenhouse gas emissions were found to be reduced. The study concluded that “green investors make companies greenery.”
As To study observationThe division may reduce the market value of a fossil fuel company, but does not affect its carbon emissions. Additionally, Amili said that the overall amount of investment in the sector has not changed.
“If an investor supports -Draws, someone is ready to take another step,” Xi repeated.
Many researchers and investors suggest the best way to put pressure on a company to cut pressure, association with partition in the form of a backup.
Why renewal still struggle to attract big capital
Overall, scalde from academic pension considers partitions as beneficial for their pension funds. “But if you take a short -term horizon, just measure in the last three or four years, it has been a very bad decision.”
In recent years, many renewable energy companies, including Orsted, have performed poorly in the stock markets.
Amili said that the renewable area faces different challenges for coal, oil and gas. This is “more fragmented way,” he said, it became more difficult to invest a large amount. And because it generates revenue in local currencies, volatility can affect profit for investors.
Experts say that rather than voluntary division requires binding regulation to accelerate change.
“Like a public, transparent evaluation of a country’s financial sector and its risk to the fossil fuel industry,” said Catreen Ganswind, a pracharak of non -fourth Urwald,.
This is something that France is doing. The idea is that fossil fuel investment naked for infection for renewable energy investment to bare pressure pressure.
France has harassed international standards for green investment, which are often criticized for giving flaws to fossil fuels. Similar strict rules apply to investors working throughout the European Union.
“European countries are moving in this way,” Ameli said, adding rules, the world’s largest bankers need to target, which is for a wave effect.
“If the largest investors pull out of fossil fuels, it can trigger the global retreat of banks from the sector,” he said.
Edited by: Tamsin Walker
