Following the Paris Agreement of limiting global warming to well below 2°C, The Institutional Investors Group on Climate Change (IIGCC) has published an updated edition of their guide setting out investor expectations for how oil and gas companies must act to adapt their business strategies to the new climate change pathway.

Long-term investors want to ensure that oil and gas majors do more to address the climate change challenge

ollowing the Paris Agreement of limiting global warming to well below 2°C, The Institutional Investors Group on Climate Change (IIGCC) has published an updated edition of their guide setting out investor expectations for how oil and gas companies must act to adapt their business strategies to the new climate change pathway.

The oil and gas sector represents trillions of dollars in market capitalisation. Therefore, long-term investors want to ensure that oil and gas majors do more to address the climate change challenge. With the updated guide, the global investor community is setting clear expectations for oil and gas companies on discipline and actions required to limit global warming.

New strategies are required

The guide is particular focused on how companies in this sector are governing and managing the transition risks and opportunities associated with a climate trajectory of no more than 2°C of global warming and are developing the business strategy required to adapt through the transition to a sustainable low carbon energy system. See the fact box below for an introduction to the five areas of concern.

Read the full guide Investor Expectations of Oil and Gas Companies: Transition to a lower carbon future here

5 focal areas

The updated guide groups investor expectations in five areas of concern:

  1. Governance – are board and management processes well enough defined to ensure effective planning for a transition consistent with 2°C and efforts to pursue 1.5°C?
  2. Strategy – is the management of climate-related risks and opportunities integrated into business strategy well enough to ensure business models will be resilient in the face of a range of energy transition scenarios?
  3. Implementation – is scenario analysis and ‘stress testing’ well enough embedded into key business planning processes and investment decisions?
  4. Transparency & disclosure – does the company disclose its operational emissions in the annual report and/or on the corporate website? How good is the company’s view of, and response to, the material climate related risks and opportunities outlined in the guide?
  5. Public policy – does the company engage with public policy makers and other stakeholders to support development of cost-effective policy measures to mitigate climate-related risks and low carbon investments?

The information provided within this website is intended for background information only. The views and other information provided herein are the current views of Nordea Bank Abp as of the date of publication and are subject to change without notice. The information provided within this website is not an exhaustive description of the described product or the risks related to it, and it should not be relied on as such, nor is it a substitute for the judgement of the recipient.

The information provided within this website is not intended to constitute and does not constitute investment advice nor is the information intended as an offer or solicitation for the purchase or sale of any financial instrument. The information provided within this website has no regard to the specific investment objectives, the financial situation or particular needs of any particular recipient. Relevant and specific professional advice should always be obtained before making any investment or credit decision. It is important to note that past performance is not indicative of future results.

Nordea Bank Abp is not and does not purport to be an adviser as to legal, taxation, accounting or regulatory matters in any jurisdiction.

The information provided within this website may not be reproduced, distributed or published for any purpose without the prior written consent from Nordea Bank Abp.