Oil companies will not remain attractive investments unless they adopt business models supporting the Paris climate targets, according to a survey of fund managers.
The poll, conducted by the UK Sustainable Investment and Finance Association (UKSIF) and the Climate Change Collaboration, found that just 18% of fund managers believed oil companies would be good investments if their businesses were still focused on fossil fuels in five years’ time.
However, 68% believed such companies would still be attractive if they adopted business models aligned with the Paris targets – in particular to keep the average global temperature rise to less than 2°C above pre-industrial levels.
Nearly a quarter of respondents did not see oil companies as good investments in any timeframe, according to the ‘Oil pressure gauge 2019’ survey of fund managers’ attitudes to climate risk and fossil fuel companies.
The survey covered 39 fund managers with $10.2trn (€9.1trn) worth of assets under management, with three-quarters of responses coming from UK-based managers and the rest from France, Germany, Italy and Spain.
The report also warned that many fund managers were putting investors at risk by failing to align their portfolios with the Paris targets. Only 21% had a policy to do this across all their funds, the report claimed.