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The Net-Zero Asset Owner Alliance (NZAOA) has outlined a new guidance for members regarding their investment in the oil and gas sector, as reported by ESG Today on March 31. The guidance, named Position on the Oil and Gas Sector, underscores the Alliance’s recognition that unabated climate change poses significant economic and investment risks. Under the guidance, no new upstream oil and gas fields “should be financed, built, developed, or planned,” with investments limited to existing fields. In the meantime, the document proposed scaling up zero-carbon energy and developing supporting technologies and policies to reduce the oil and gas demand, thus avoiding the need for new gas field development.
The NZAOA has 85 institutional investors and controls USD11tr in assets under management. The group is committed to driving the global economy’s transition away from fossil fuels. It called on investors, including alliance members, to align their operations activities, including capital expenditure, with established 1.5°C climate action pathways. It also recognized that some investors may continue to invest in new oil and gas infrastructure in exceptional circumstances, where affordable and reliable alternatives are not yet viable. For oil and gas firms and companies that heavily rely on fossil fuels, the group advised them to set out “science-based emissions targets” that cover Scope 1, 2, and 3 emissions and to align their strategies and activities with these targets. Moreover, it expects policymakers and regulators to implement systemic interventions, such as carbon taxes and funding innovative technologies, to facilitate oil and gas demand reductions and increase alternative energy supply.
Sources:
https://www.offshore-technology.com/news/nzaoa-no-new-upstream-oil-gas/
