Green-fingered

27 January 2021 By Neil Unmack Follow @unmack1

Booming demand for sustainable funds and new EU rules will make debt investors more wary of buying securities issued by polluters. There are already signs that is happening in the oil and gas sector. Higher funding costs should be a powerful spur for companies to get serious.

This content is for Subscribers only

Context News

S&P Global on Jan. 26 placed the ratings of nine oil and gas companies, including Exxon Mobil, Imperial Oil, Royal Dutch Shell and Total on CreditWatch with negative implications, indicating that it may downgrade the groups in the near future. The agency cited higher risk from low oil prices and the global transition to renewable energy.

Exxon Mobil, Imperial Oil and Chevron are currently rated AA, placing them in the second-highest rating band possible.

The assets of euro-denominated corporate bond funds that are labelled as sustainable reached $48 billion by the end of November 2020, up from just $21 billion since the end of 2018, according to Morningstar data.

A group of British lawmakers on Jan. 25 said the Bank of England should cut its exposure to companies that accelerate global warming.

“The Bank is at risk of creating a moral hazard by purchasing high-carbon bonds and providing finance to companies in high-carbon sectors without placing any conditions on them to make a transition to net zero,” the Environmental Audit Committee said in a letter to Bank of England Governor Andrew Bailey.

Context News

Exxon Mobil, Imperial Oil and Chevron are currently rated AA, placing them in the second-highest rating band possible.

A group of British lawmakers on Jan. 25 said the Bank of England should cut its exposure to companies that accelerate global warming.

Email a friend

Please complete the form below.

Required fields *