Secteur
Filtres
40  %
Picto Information.PNG

Coal is one of the most polluting energies insofar as it represents 40% of the CO2 emissions of the energy sector. As a reminder, CO2 will represent 75% of GHG emissions in 2020. The other gases are methane (17%), nitrous oxide (6%) and fluorinated gases (2%).

Coal still accounts for 25% of the global primary energy mix in 2021 according to OurWorldInData and is used as the main energy source in many countries. Although it is not found in the energy mix in any given country, it is found in products imported and manufactured using coal-fired power.

emissions from the energy sector in 2020 are caused by coal.

Source OurWorldInData

53  %
Picto Information.PNG

Oil and gas represent respectively 31.8% and 21.26% of the CO2 of the energy sector in 2020. As a reminder, CO2 represents 75% of GHG emissions in 2020. The other gases are methane (17%), nitrous oxide (6%) and fluorinated gases (2%).

Oil and gas represent respectively 29% and 23% of the global primary energy mix in 2021 according to OurWorldInData.

Not all types of oil and gas carry the same weight in this distribution, depending on where and how they are extracted for use. These include conventional and non-conventional hydrocarbons.

emissions from the energy sector in 2020 are caused by oil and gas.

Source OurWorldInData

7381  Bn

is the global investment in fossil fuels between 2010 and 2021.

Source : Novethic

Several strategies need to be developed by the financial sector:

- Identify the sectors responsible for CO2 emissions, whether they are producers of coal, oil and gas or the main customers of this energy

- Engage in dialogues and implement voting policies with these types of issuers in order to enable the transition from fossil fuels to less polluting energies. (Shareholder engagement strategy)

- Divest from fossil fuel emitting or consuming companies where shareholder engagement is not applicable or does not lead to change (Divestment Strategy)

Coal exit

Below are the key indicators related to the exit from coal:

Engagement in the transition

Before excluding players from their portfolio by selling securities, a first step is to develop a shareholder engagement strategy allowing for the transition of companies in which a player inves

Engagement strategy  

Scope covered  

Scope of application

In accordance with the guide to commitments published in 2021 by the Observatory, in order for a policy to be truly binding on a financial actor, certain points must be specified, particularly with regard to the policy's scope of application.

In the context of a sectoral policy such as coal or hydrocarbons, the following elements should be specified: the scope of the policy, in this case the value chain of coal-related activities and the financial activities concerned by the policy.

Value chain  

The coal value chain refers to the various activities involved in the coal mining process from extraction to marketing.

No aggregated indicators on this subject for the moment, you can find the individual policies of the actors on the "monitoring individual commitments" part of this site.

New projects  

In addition to exclusionary strategies that aim to disinvest more or less gradually in the sector, the actor may decide to stop investing in new projects related to the coal chain. New projects are an area to be treated differently from other assets as they involve the financing of assets that have a life of more than 30 years. A coal mine planned today will continue to operate after 2050. This is the date often used to achieve "carbon neutrality". As a reminder, the use of carbon neutrality can only be made at the level of the planet, at the level of financial institutions and companies in general, we speak of a contribution to carbon neutrality, as ADEME underlines in its March 2021 note.

Financial activities covered  

Engagement or exclusion strategies can be applied to one or more assets, or to the entire financial portfolio. In the case of management companies, this can be divided between open-ended funds, dedicated funds or mandates.

A management company chooses whether to apply its coal policy to its existing funds, to new funds or to all of its funds.

Modalities

In accordance with the guide to commitments published in 2021 by the Observatory, in order for a policy to be truly binding on a financial player, certain points must be specified, in particular the methods of implementation of the policy.

In the case of sectoral policies such as coal or hydrocarbons, the following elements should be specified: the strategy's inclusion in a timetable and the measurability of the policy, corresponding to the types of exclusion thresholds applied.

Calendar  

In order to comply with the Paris Agreement and maintain a trajectory aligned with a global warming limit of 1.5°, financial actors must divest from the coal sector with an exit timetable of 2030 in OECD countries and 2040 in the rest of the world. French asset management companies have therefore used these timetables to develop exit strategies and some have proposed more ambitious timetables than those recommended.

Thresholds are set and regularly reviewed to reach the exit target at the dates presented below.

Exclusion strategies  

Exclusion, or divestment, consists of both not investing in new coal projects, as well as stopping the financing already done in the sector according to thresholds and scope of activity defined by the actor.

Types of thresholds  

Absolute thresholds are exclusion criteria that allow actors to make the transition away from coal. In a coal exclusion policy, a player stops doing business with companies whose coal-related activities represent more than X€ of turnover or which have a thermal coal power generation capacity of more than X GW. (X being the absolute threshold)

Relative thresholds are also exclusion criteria. In a coal exclusion policy, a player stops all activity in companies whose coal-related activities represent more than X% of their turnover or whose coal represents more than X% of their electricity generation capacity. (X being the relative threshold)

Exposure

Encours exposés  

The coal exposure of the managed companies is calculated based on the amounts invested in coal mining companies and energy companies that produce electricity from coal, listed in the GCEL.. Funding to companies upstream or downstream of the value chain or that use coal-fired electricity is not included in this exposure calculation.

36,4 bn euros in funding to the coal sector

i.e. 0.9% of assets under management in 2021

Oil and gas exit

Below are the key indicators related to the exit from oil and gas

Not all types of oil and gas have the same effect on the climate depending on the geological characteristics of the hydrocarbon reservoirs (extra-heavy oil, shale oil or gas, etc.) and/or the place of extraction (e.g. in deep waters or in the Arctic zone).

Most current methodologies therefore distinguish between conventional and unconventional deposits according to these characteristics. The definitions of unconventional are not yet harmonised. It is therefore important to understand which types of hydrocarbons are included in this category depending on the methodologies.

Based on this distinction, actors apply different policies according to these two categories. In this section you will find the details of the hydrocarbons covered by the policy in tooltips.

Engagement dans la transition

Before excluding players from their portfolio by selling securities, a first step is to develop a shareholder engagement strategy allowing for the transition of companies in which a player invests.

Scope of engagement  

Shareholder engagement refers to the fact that an investor interacts with the companies it finances, whether with debt or equity, with the aim of influencing their practices in the sector concerned over the long term and/or improving their reporting on these issues. These requirements are formulated in the context of a structured approach that is followed over the long term.

Simply divesting from an oil and gas asset removes the investor's carbon liability, but does not reduce the absolute global carbon footprint.

Example: Economic agent A is an investor with an operating oil and gas plant, if it sells the plant to economic agent B it effectively reduces its exposure to coal in its portfolio, but the plant will continue to emit as much.

The aim of the commitment is to achieve a significant reduction in emissions by accompanying companies dependent on the oil and gas sector in an energy transition, thus enabling the closure of power plants. For example, if Agent A is able to replace the oil or gas plant with another low-carbon power plant, such as a hydroelectric plant, it will have reduced both its exposure and absolute emissions while maintaining access to electricity for local businesses and populations.

Scope of application

In accordance with the guide to commitments published in 2021 by the Observatory, in order for a policy to be truly binding on a financial actor, certain points must be specified, particularly with regard to the policy's scope of application.

In the context of a sectoral policy such as coal or hydrocarbons, the following elements should be specified: the scope of the policy, in this case the value chain of coal-related activities and the financial activities concerned by the policy.

Value chain  

The oil and gas value chain refers to the various activities involved in the oil/gas process from extraction to marketing. For each type of hydrocarbon it is important to specify which part of the value chain is covered.

No aggregated indicators on this subject for the moment, you can find the individual policies of the actors on the "monitoring individual commitments" part of this site.

New projects  

In addition to exclusionary strategies that aim to disinvest more or less gradually in the sector, the player may decide to stop investing in new projects related to the oil and gas sector chain of activity. Upstream expansion projects correspond to expansion in the exploration of new sources of oil and gas and in the production and exploitation of these sources. Midstream is the transportation, processing and storage of oil and gas.

Financial activities concerned  

Engagement or exclusion strategies can be applied to one or more assets, or to the entire financial portfolio. In the case of banks, the type of assets may be loans and credits, securities structuring (bonds or equities), dedicated financing, mergers and acquisitions or index-linked products.

No aggregated indicators on this subject for the moment, you can find the individual policies of the actors on the "monitoring individual commitments" part of this site.

Modalities

In accordance with the guide to commitments published in 2021 by the Observatory, in order for a policy to be truly binding on a financial actor, certain points must be specified, in particular the methods of implementing the policy.

In the case of sectoral policies such as coal or oil and gas, the following elements should therefore be specified: the inclusion of the strategy in a timetable and the measurability of the policy, corresponding here to the types of exclusion thresholds applied.

Calendar  

In order to comply with the Paris Agreement and maintain a trajectory aligned with a global warming limit of 1.5°, financial actors must divest from the coal sector with an exit timetable of 2030 in OECD countries and 2040 in the rest of the world. French asset management companies have therefore used these timetables to develop exit strategies and some have proposed more ambitious timetables than those recommended.

Thresholds are set and regularly reviewed to reach the exit target at the dates presented below.

Exclusion strategies  

Exclusion (or divestment) consists of both not investing in new oil and gas projects, as well as stopping existing financing in the sector according to thresholds and scope of activity defined by the actor.

Exclusion thresholds  

Absolute thresholds (in units) are exclusion criteria that allow actors to transition away from oil and gas. In an oil and gas exclusion policy, a player stops doing business with companies whose oil and gas activities represent more than X€ of turnover or who have an oil and gas production capacity of more than X mmboe. (X being the absolute threshold)

Relative (percentage) thresholds are also exclusion criteria. In an oil and gas exclusion policy, a player stops all activity in companies whose oil and gas activities represent more than X% of their turnover. ( X being the relative threshold)

Urgewald has developed, in the framework of the Global Oil and Gas Exit List, 6 thresholds for oil and gas, which cover both Upstream (production, expansion, exploration) and Midstream (expansion and development of LNG terminals) and which can be used as a benchmark for financial institutions' policies.

Exposure

The banks' oil and gas exposure is calculated on the basis of the amounts invested in mining companies and energy companies that produce electricity from oil and gas, listed by GOGEL according to the calculations requested by the ACPR.. Investments in companies upstream or downstream of the value chain or that use electricity produced from oil and gas are not included in this exposure calculation.

Exposed assets  

No aggregated indicators on this subject for the moment, you can find the individual policies of the actors on the "monitoring individual commitments" part of this site.