Key Resources

Looking for more information? Here’s everything you should need.

Key Quotes

Author of the report, Oil & Gas Analyst at Carbon Tracker, Thom Allen said: “If governments are really serious about climate change they must ensure that the activities of stock exchanges and the financial centres around them are consistent with national climate goals and net zero commitments or we will lose any chance of meeting the Paris target. This is especially important now as fossil fuel prices and related company stocks soar.”

Mike Coffin, Head of Oil, Gas and Mining at Carbon Tracker and co-author, said: “Fossil fuel companies are reliant on equity and debt markets for the financing of capital-intensive projects, both to raise capital to finance new investments, but also to maintain existing production facilities and drill new wells. Financial centres facilitate, and profit from, both the primary equity raising and ongoing finance requirements for these companies, as well as secondary trading activities. As such, financial institutions that continue to enable such activities beyond climate limits, cannot themselves be viewed as Paris-aligned, and are also themselves increasingly exposed to transition risk.

Over $1 trillion of oil & gas assets risk becoming stranded as a result of policy action on climate and the rise in alternative energy sources.

The majority of this unburnable carbon is held by companies listed in just a handful of global financial centres.

Unburnable Carbon: Ten Years On finds that the majority of embedded emissions are listed on the stock exchanges of China, USA, India, Russia and Saudi Arabia where, with the exception of the USA, emissions are dominated by the partial listings of state-owned companies.

Figure 1: Emissions embedded (GtCO2) in the reserves of listed and partially-listed companies, by financial centre of primary listing, free-float weighted.

The report quantifies the stranded asset risk exposure for the oil and gas assets and finds over $1 trillion of oil & gas assets risk becoming stranded, and the majority, some $600bn, is held by listed companies. In absolute terms, this stranded asset risk is concentrated in the financial centres of New York, Moscow, London, and Toronto.

Figure 2: Stranded asset exposure by financial centre shown as upstream oil & gas capex by financial centre, 2021-2030, as % of business-as-usual capex (2.7°C).

Figure 3: Global distribution of embedded emissions, based on primary listing location

Key Findings

To limit warming to 1.5°C, 90% of fossil fuel reserves must remain in the ground as unburnable carbon.
The majority of this unburnable carbon is held by companies listed in just a handful of global financial centres.
Adjusting for state/restricted ownership reveals New York, Moscow, Toronto and London as the financial centres with the highest embedded emissions from upstream oil and gas companies over which investors have influence.
Despite some having set “net zero” goals, these financial centres enable the ongoing activities of the incumbent fossil fuel industry, in many cases to a far greater degree than national reserves.
Listed companies are exposed to significant transition risk.
Energy transition risks apply not just to producers, but across the full oil and gas value chain (e.g. refiners) as well as a wide range of different financial services providers.
Policymakers must view the facilitation of new fossil fuel as contrary to achieving national climate goals.