Oil and gas financing: Fossil investments into the next century

Global institutional investors are pouring billions into fossil fuel industries, despite mounting evidence of their role in accelerating the climate crisis. According to a study conducted by Urgewald and 28 other environmental organizations worldwide, approximately 6.5 trillion US dollars are currently invested in coal, gas, and oil by 8,400 asset managers, pension funds, state funds, insurance companies, foundations, and hedge funds. This figure represents a staggering amount—equivalent to the combined annual GDP of France and the United Kingdom. The report highlights that these investments persist even as extreme weather events such as heatwaves, hurricanes, and floods increasingly make parts of the planet uninhabitable.

Among the largest contributors to these fossil fuel investments are institutional investors based primarily in the United States. Vanguard, one of the world's leading asset managers, leads the list with over 659.5 billion US dollars invested in fossil fuel companies. It is followed closely by BlackRock, another major player in the financial sector, which holds around 553.3 billion US dollars in similar assets. Additionally, the Saudi Public Investment Fund ranks third with 283.7 billion US dollars allocated to fossil fuel enterprises. These figures underscore the deep integration of fossil fuel interests within the global financial system.

Europe, too, plays a significant role in financing fossil fuel projects. Institutional investors in Europe hold 13 percent of the total analyzed shares and bonds of fossil fuel companies globally. Norway's Government Pension Fund Global (GPFG), the world's largest sovereign wealth fund, ranks ninth among global fossil fuel investors with 91.3 billion US dollars invested in oil, coal, and gas. Critics argue that the GPFG's involvement in fossil fuel investments contradicts its responsibility to address the climate crisis effectively. Dina Rui from the Nordic Center for Sustainable Finance criticized the fund, calling it Europe's most irresponsible investor regarding climate issues.

Within Europe, several major banks and financial institutions contribute significantly to fossil fuel investments. The Swiss bank UBS and the French bank Crédit Agricole, along with its subsidiary Amundi, are notable players. Among German-based investors, the Deutsche Bank, through its asset management arm DWS, holds 43.8 billion US dollars in fossil fuel-related assets. Similarly, Allianz and its subsidiaries AGI and Pimco manage 34.8 billion US dollars in such investments. Other prominent European investors include the DZ Bank's subsidiary Union Investment and the Deka Group, each managing substantial sums in fossil fuel assets.

Notably, investments in specific companies such as Siemens and Siemens Energy are particularly prevalent among these European investors. Both DWS and Deka have made significant investments in Siemens AG, with amounts reaching 3.5 billion and 1.6 billion US dollars respectively. These investments highlight the continued reliance on traditional energy sectors despite growing awareness of their environmental impact.

Looking further ahead, the study reveals that there are still substantial investments in long-term fossil fuel bonds. Approximately 64 billion US dollars are invested in bonds issued by fossil fuel companies that will not mature until after the year 2050. Over 240 investors hold fossil fuel bonds with maturities extending beyond 2080. The longest-maturing bond identified in the study was issued by Brazil's state-owned oil company Petrobras, with a maturity date set for the year 2115. Such long-term commitments indicate a lack of urgency in transitioning away from fossil fuels, despite the pressing need for immediate action against climate change.