What influence do the world's giants have in controlling the crisis

What influence do the world’s giants have in controlling the crisis

Currently, just ten financial actors – super-powerful investment advisers, governments and sovereign wealth funds – hold the key to climate change through their overwhelming influence on the fossil fuel industry, a new study shows.

Thus, in the publication Environmental Innovation and Societal Transitions, researchers from the University of Waterloo in Canada found that just 200 companies (known as the Carbon Underground 200 or CU200) own 98% of potential emissions from oil, gas and coal reserves – the vast majority of which must remain in the ground if we want to avoid a climate catastrophe.

The solution to the climate crisis is in their hands

Specifically, CU200 fossil fuel reserves have the potential to produce 674 gigatons of carbon emissions, more than enough to push global average temperatures more than 1.5°C above pre-industrial levels.

Within the CU200 group, just 10 shareholders own 49.5% of potential emissions from the world’s largest energy firms and have huge influence over the fossil fuel market.

These actors include: Blackrock, Vanguard, Government of India, State Street, Kingdom of Saudi Arabia, Dimensional Fund Advisors, Life insurance Corporation, Norges Bank, Fidelity Investments and Capital Group. These actors, the researchers argue, are key to solving the climate crisis and ending the fossil fuel era.

In his view, “Individually, reducing demand for fossil fuels by driving and flying less and turning off the air conditioner is great. We should continue to do this. But we also need to reduce our fossil fuel production that these 10 actors can drive,” says Truzaar Dordi, lead researcher at the University of Waterloo.

“Without them, we simply won’t have what it takes to meet our emissions targets and avoid climate catastrophe.”

Specifically, “Capital markets can enable a low-carbon transition among the world’s largest owners of coal, oil and gas reserves,” Dordi said.

Furthermore, “Recent commitments to reduce carbon exposure in investment portfolios and engagement with the fossil fuel industry indicate that we may already be moving in this direction.”