15 Feb 2022

Go for Green: Banks continue to fund oil and gas exploration, EY forms new net-zero consultancy division, and why we must avoid dragging net-zero into a culture war

No E in ESG: banks continue to fund oil and gas exploration, despite net-zero commitments

As reported in The Times on Monday 14th February, Europe’s biggest banks provided £24bn to oil and gas firms since their net zero pledges and COP26 commitments. Analysis by campaign group ShareAction showed that 25 banks have provided £24bn in financing to 50 companies with large oil and gas expansion plans.

ExxonMobil, Saudi Aramco, Shell and BP are the worst offenders in this list – and this comes as no surprise; as they are all companies that have consistently come under fire from the press, activists and even investors.

In May 2021, as reported in the Guardian, ExxonMobil faced an investor-rebellion, losing two board members to a dissident hedge-fund campaign by Engine No. 1 to move the company to a greener strategy. This is just one of many times the American energy-giant has proven itself one of the worst of a bad-bunch when it comes to net-zero and sustainability commitments – including consistent funding of climate-change scepticism and denial.

For example, Geoffrey Supran and Naomi Oreskes’s 2017 study ‘Assessing ExxonMobil’s climate change communications (1977–2014)’ concluded that the company’s paid-for advertorial content in the New York Times and other major papers consistently expressed scepticism and doubt over the realities around climate change. This was in complete opposition to most scientific research, even then.

As discussed in last week’s Go for Green blog from us at Spreckley, London-listed Shell and BP recently disclosed huge profits from Q4 2021 due to gas price increases in recent months, with equally-large CEO bonuses to match.


Big Four start to cash in on growing need for net-zero consultants

The good news this week (reported today in The Times), is that EY is cashing in on the move towards greener business strategies by setting up a new consulting division to help organisations towards net-zero.

This £100mn investment has aims to hire 1300 consultants, and marks a new service among the Big Four and other business consultancies that will surely see rapid growth as organisations rush to publish their net-zero strategies by next year (as enforced by the UK Government during COP26).

For many, planning net-zero will be a challenge – particularly as the plans must include the emissions of suppliers which are of course difficult to track. For others, including some of the biggest global corporations such as Nestle, Ikea, and Unilever, it is a challenge unanimously failed – as discussed here in the last week’s Go for Green blog – as new data shows just how short of net-zero they’ll fall.


Why we must avoid dragging net-zero into a culture war

Lastly, the most infuriating environmental news at the moment is the new culture war growing around net-zero. With surging energy costs, certain opportunistic, cynical and short-sighted Conservatives have chosen to blame green politics, net-zero, and renewables – calling themselves the ‘Net-Zero Scrutiny Group’.

This group, as discussed here in The Guardian, is threatening to draw sound science that rightfully causes concerns around emissions into the mud of a new ‘culture-war’ – as we saw with Brexit. Their strategy is to stoke fears and divisions around the cost-of-living crisis in order to promote reductions in green taxes and increases in oil and gas exploration as the solution.

A current environment minister told the Guardian that the NZSG was of “no concern to the government” and was being widely ignored – and we can all hope this is the case. However, a fear of EU and Brexit divisions stoking anti-green politics is not unfounded; the NZSG is full of pro-Brexit campaigners, and Nigel Farage has expressed support for a net-zero referendum.

Make no mistake, this ‘scrutiny’, is simply short-sighted greed; seizing an opportunity to gain political and economic opportunities (and lobbyists’ gifts no doubt).

The alternative, which is accepting sound science, and making the most of the many economic, social and cultural opportunities going green can provide, just doesn’t fit within their ideological framework.

It is imperative that the Government avoids such political divisions for short-term wins, and instead invests now so that we can reap the rewards of tomorrow (while avoiding catastrophe – always an added bonus).