The International Energy Agency and Carbon Tracker report that the proven reserves listed as assets on the balance sheets of the 100 largest fossil fuel companies contain over three times the amount of carbon that can be released without climate catastrophe.
Any limits placed on the extraction and combustion of these reserves will create stranded assets for those companies, making them overvalued and exposing their investors to a “carbon bubble.”
“The carbon bubble has the potential to be ten times the size of the recent housing bubble that caused financial chaos,” says Danielle Fugere, President of As You Sow. “To hedge against this risk, prudent investors are moving capital into cleantech investments that will power our energy future.”
As You Sow’s climate change initiative tackles this carbon bubble by engaging key energy companies on this emerging risk. This year, we filed the first ever shareholder resolution asking CONSOL Energy to address this looming risk and received 19.7% support.
This new initiative builds on our earlier work including the 2011 publication of Financial Risks of Investments in Coal and our work empowering students to encourage their university endowments to divest from fossil fuels and reinvest in clean energy, which is now active on over 340 campuses.
As You Sow is also collaborating with financial advisors to provide resources for investors interested in carbon-free reinvestment. The Do the Investment Math report demonstrates that carbon-free reinvestment will have a low-risk impact on portfolios and future reports and webinars are planned on green revolving funds, cleantech investing, and carbon-free mutual funds.
Learn more about As You Sow’s Climate Change initiative here.