• About
    • Which Energy Mix is this?
  • Climate News Network Archive
  • Contact
The climate news that makes a difference.
No Result
View All Result
The Energy Mix
  • Canada
  • UK & Europe
  • Fossil Fuels
  • Ending Emissions
  • Community Climate Finance
  • Clean Electricity Grid
  • Cities & Communities
SUBSCRIBE
DONATE
  • Canada
  • UK & Europe
  • Fossil Fuels
  • Ending Emissions
  • Community Climate Finance
  • Clean Electricity Grid
  • Cities & Communities
SUBSCRIBE
DONATE
No Result
View All Result
The Energy Mix
No Result
View All Result
  • Canada
  • UK & Europe
  • Fossil Fuels
  • Ending Emissions
  • Community Climate Finance
  • Clean Electricity Grid
  • Cities & Communities
  FEATURED
Danske Bank Quits New Fossil Fuel Financing January 23, 2023
Extreme Warming Ahead Even as Worst-Case Scenarios Grow ‘Obsolete’ January 23, 2023
Notley Scorches Federal Just Transition Bill as Fossil CEO Calls for Oilsands Boom January 23, 2023
IRON OXIDE: New Battery Brings Long-Duration Storage to Grids, 750 Jobs to West Virginia January 23, 2023
BREAKING: GFANZ Banks, Investors Pour Hundreds of Billions into Fossil Fuels January 17, 2023
Next
Prev

Bubble may burst for fossil fuel giants

October 6, 2013
Reading time: 3 minutes
Primary Author: Kieran Cooke

 

NB: EMBARGOED UNTIL 2301 GMT, Monday, 7 October The giant corporations powering the fossil fuel industry are warned that they face a damaging backlash if they try to resist the mounting pressures of climate change legislation and high-profile campaigning London, 7 October − The financial and economic muscle of the global fossil fuel industry’s corporate behemoths will not protect them from the costly effects of negative stigmatisation if they ignore climate change pressures, according to a new academic study. The influence wielded on world stock markets by such corporations is enormous, with oil and gas companies alone making up about 20% of the value of the London financial index and about 11% of that in New York. However, if any meaningful action is to be taken on climate change in the years ahead, the activities of the fossil fuel industry will have to be severely curtailed and the bulk of assets frozen, inevitably leading to a sharp decrease in corporate valuations – what some analysts refer to as a bursting of the “carbon bubble”. Not only are such corporations coming under increasing pressure from regulators and from climate legislation limiting CO² emissions, but a high-profile campaign is also under way to persuade investors to withdraw from companies involved with the fossil fuel industry. According to the new study by academics at the Smith School of Enterprise and the Environment at Oxford University, the fossil fuel companies cannot afford to ignore such campaigns. If they do, they will – at the very least – risk severe damage to their reputation, but they could also face increasing problems raising finance for their work. The study, Stranded Assets and the Fossil Fuel Divestment Campaign, compares campaigns going on in the fossil fuel sector with other similar movements that have taken place − such as the campaign against corporations with investments in apartheid South Africa, and tussles with the tobacco, munitions and gaming industries. The campaign against fossil fuel investments is spearheaded by the 350.org group, under the title Fossil Free. The Smith School study says the campaign draws heavily on the experience of targeting apartheid-era investments in South Africa.

Targeting investors

Such campaigns move forward in distinct phases. At first, the aim is to create public awareness and publicity on the issue. Campaigners then target various institutions, particularly universities. Finally, the movement goes global, targeting big investors such as pension funds. However, those anticipating a mass withdrawal of investment are likely to be disappointed, the study says. Experience shows that only a very small proportion of funds is actually withdrawn. “For example, despite the huge interest in the media and a three-decade evolution, only about 80 organisations and funds have ever substantially divested from tobacco equity, and even fewer from tobacco debt,” the study says. But such campaigns create publicity and can harm corporate reputations – resulting in what the study terms “stigmatisation”. It says: “As with individuals, a stigma can produce negative consequences for an organisation. For example, firms heavily criticised in the media suffer from a bad image that scares away suppliers, sub-contractors, potential employees, and customers. “Governments and politicians prefer to engage with ‘clean’ firms to prevent adverse spill-overs that could taint their reputation or jeopardise their re-election. Shareholders can demand changes in management or the composition of the board of directors of stigmatised companies.” This all has a knock-on effect. Companies associated with the fossil fuel sector might find themselves frozen out of public contracts, and banks might be reluctant to make loans. The study says the coal industry − more visibly polluting and less powerful than the oil and gas sector − is likely to feel the biggest initial impact of such a campaign.

  • Be among the first to read The Energy Mix Weekender
  • A brand new weekly digest containing exclusive and essential climate stories from around the world.
  • The Weekender:The climate news you need.
New!
Subscribe
Demand depressed

“If during the stigmatisation process, campaigners are able to create the expectation that the government might legislate to levy a carbon tax, which would have the effect of depressing demand, then they will materially increase the uncertainty surrounding the future cash flows of fossil fuel companies,” the study says. The study has some advice for the fossil fuel industry. Rebranding is one option: BP tried this some years ago, with the change from British Petroleum to “Beyond Petroleum” and turning its logo into a green and yellow sunflower. Companies would be ill-advised, says the report, to play tough with campaigners. “The outcomes of stigmatisation will be more severe for companies seen to be engaged in wilful negligence and ‘insincere’ rhetoric − saying one thing and doing another. “Evidence suggests that hardball strategies intensify stigmatisation, focusing attention on companies that are unrepentant about violating social norms.” − Climate News Network



in Climate News Network

The latest climate news and analysis, direct to your inbox

Subscribe

Related Posts

U.S. Geological Survey/wikimedia commons
Biodiversity & Habitat

Climate Change Amplifies Risk of ‘Insect Apocalypse’

December 1, 2022
42
Alaa Abd El-Fatah/wikimedia commons
COP Conferences

Rights Abuses, Intrusive Conference App Put Egypt Under Spotlight as COP 27 Host

November 14, 2022
26
Western Arctic National Parklands/wikimedia commons
Arctic & Antarctica

Arctic Wildfires Show Approach of New Climate Feedback Loop

January 2, 2023
27

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

I agree to the Terms & Conditions and Privacy Policy.

Trending Stories

EcoAnalytics

Albertans Want a Just Transition, Despite Premier’s Grumbling

January 23, 2023
243
United Nations

Salvage of $20B ‘Floating Time Bomb’ Delayed by Rising Cost of Oil Tankers

January 27, 2023
48
RL0919/wikimedia commons

Danske Bank Quits New Fossil Fuel Financing

January 23, 2023
2.2k
@tongbingxue/Twitter

Extreme Warming Ahead Even as Worst-Case Scenarios Grow ‘Obsolete’

January 23, 2023
285
Weirton, WV by Jon Dawson/flickr

IRON OXIDE: New Battery Brings Long-Duration Storage to Grids, 750 Jobs to West Virginia

January 23, 2023
511
Rachel Notley/Facebook

Notley Scorches Federal Just Transition Bill as Fossil CEO Calls for Oilsands Boom

January 23, 2023
268

Recent Posts

Sergio Boscaino/flickr

Dubai Mulls Quitting C40 Cities Over ‘Costly’ Climate Target

January 24, 2023
88
hangela/pixabay

New UK Coal Mine Faces Two Legal Challenges

January 24, 2023
46

Gas Stoves Enter U.S. Climate Culture War, Become ‘Bellwether’ for Industry

January 22, 2023
75
Jeff Hitchcock/flickr.

BREAKING: GFANZ Banks, Investors Pour Hundreds of Billions into Fossil Fuels

January 23, 2023
497

Exxon Had the Right Global Warming Numbers Through Decades of Denial: Study

January 17, 2023
225
willenhallwench / Pixabay

Ontario Greenwashes with ‘Misleading, Illegitimate’ Emission Credits

January 16, 2023
314
Next Post

Emissions rate puts billion more at risk

The Energy Mix - The climate news you need

Copyright 2023 © Energy Mix Productions Inc. All rights reserved.

  • About
  • Contact
  • Privacy Policy and Copyright
  • Cookie Policy

Proudly partnering with…

scf_withtagline
No Result
View All Result
  • Canada
  • UK & Europe
  • Fossil Fuels
  • Ending Emissions
  • Community Climate Finance
  • Clean Electricity Grid
  • Cities & Communities

Copyright 2022 © Smarter Shift Inc. and Energy Mix Productions Inc. All rights reserved.

Manage Cookie Consent
To provide the best experiences, we use technologies like cookies to store and/or access device information. Consenting to these technologies will allow us to process data such as browsing behaviour or unique IDs on this site. Not consenting or withdrawing consent, may adversely affect certain features and functions.
Functional Always active
The technical storage or access is strictly necessary for the legitimate purpose of enabling the use of a specific service explicitly requested by the subscriber or user, or for the sole purpose of carrying out the transmission of a communication over an electronic communications network.
Preferences
The technical storage or access is necessary for the legitimate purpose of storing preferences that are not requested by the subscriber or user.
Statistics
The technical storage or access that is used exclusively for statistical purposes. The technical storage or access that is used exclusively for anonymous statistical purposes. Without a subpoena, voluntary compliance on the part of your Internet Service Provider, or additional records from a third party, information stored or retrieved for this purpose alone cannot usually be used to identify you.
Marketing
The technical storage or access is required to create user profiles to send advertising, or to track the user on a website or across several websites for similar marketing purposes.
Manage options Manage services Manage vendors Read more about these purposes
View preferences
{title} {title} {title}