(Alliance News) - The environment takes top billing in environmental, social and governance investing, but what are companies actually doing for the earth?
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Oil companies face a "moment of truth" over their role in the transition to clean energy, the International Energy Agency said in a report published on Thursday.
The role played by the industry so far in responding to the threat of climate change has been "minimal", said IEA Executive Director Fatih Birol. Less that 1% of clean energy investment currently comes from oil and gas companies.
"The uncomfortable truth that the industry needs to come to terms with is that successful clean energy transitions require much lower demand for oil and gas, which means scaling back oil and gas operations over time – not expanding them. There is no way around this," Birol said. "So while all oil and gas producers needs to reduce emissions from their own operations, including methane leaks and flaring, our call to action is much wider."
The report, called 'Oil & Gas Industry in Net Zero Transitions', was issued ahead of the Cop28 climate meeting in Dubai starting on Thursday next week, as the world struggles to meet the goal of limiting global warming to 1.5 degrees Celsius.
The Paris-based energy research body, which has 31 member countries, said the industry invested USD20 billion in clean energy last year, about 2.5% of its total capital spending. To meet the Paris Agreement's 1.5C target, the oil and gas sector must devote 50% of its investments to clean energy projects by 2030. About USD800 billion is invested in the oil and gas sector each year.
"Companies continuing with business-as-usual risk losing their 'social licence' to operate as the damage from climate change becomes ever more apparent," the IEA warned.
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Forestry industry leaders in the UK must work together to change negative public opinion about commercially planted spruce trees, an industry report issued on Wednesday said.
According to the 'UK Forest Market Report 2023', issued by forestry services firm Tilhill, together with Goldcrest Land & Forestry Group, just 13,000 hectares of trees were planted in the UK this year, down 7% on 2022 and less than half of the national target of 30,000. Most of the plantings were in Scotland, where 8,200 hectare were planted, but this was still down 27% from 2022.
Part of the reason for this poor record is "negative public perceptions about Sitka spruce, the workhorse of the timbre industry", said Xander Mahony, head of forestry investment at Tilhill.
"Why is Sitka spruce not accepted as a commercial crop in the same way as the potato or a field of wheat?" the firm asked.
Mahoney noted that public relations campaigns for farming have sought to raise awareness about where milk comes from, and something similar could be done to close the "disconnect" for wood.
"People want things made out of wood, wood looks nice, we have our buildings made out of cross-laminated timber, but they don't connect that to growing good Sitka in plantations and so breaking through that communication barrier and making that connection is really important."
Tilhill's Mahoney said the public doesn't like conifer plantations, because they are not native woodland, and they tend to be relatively large. He argued that this perception is caused by a dearth of UK tree planting overall.
"The fact is we want both and if we were planting more trees and had an abundance of trees than perhaps the productive components wouldn't seem so out of place," he said.
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By Tom Waite, Alliance News editor
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