23 of Australia’s 300 biggest companies are pursuing plans consistent with the failure of the Paris Agreement. If these companies get their way, they will enable emissions equivalent to almost 150 times Australia’s annual total. And millions of Australians are invested in these climate wrecking companies through their super! We can and must leave their polluting plans behind, but it will take pressure from all of us to demand our super funds divest from companies that are out of line with the Paris climate goals, and out of time to act.
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The 23 Out of Line companies. These 23 companies are undermining climate action by:
• Expanding the scale of the fossil fuel sector; and/or
• Relying on scenarios consistent with the failure of the Paris Agreement to justify their future business prospects.
Fossil fuels tanking
At the start of 2021, these Out of Line companies represented 14% of the ASX 300 by market capitalisation, down from 16% of the ASX 300 in January 2020. This drop in total market share can largely be attributed to the poor performance of fossil fuel-related companies throughout the market turmoil of 2020. However, last year merely exacerbated a decade-long trend of fossil fuel companies underperforming compared to the rest of the Australian sharemarket. An update to Market Forces’ May 2020 analysis shows an index tracking the market price of 11 ASX 300 companies whose sole business is producing coal, oil or gas has fallen 41% in the 10 years to 1 February 2021, while the ASX 300 had risen 38% over that time.
Australia’s biggest carbon bomb threats
For the first time, Market Forces has quantified the emissions that would be enabled as a result of fossil fuel companies recovering the coal, oil and gas resources they believe they have at least ‘reasonable prospects’ of extracting (coal) or that are at least ‘potentially recoverable’ (oil and gas), and following their current fossil fuel power generation plans. There are differences in the way companies report coal reserves and resources, compared to oil and gas, outlined as follows. For the coal companies, we’ve differentiated between the emissions that would be generated from:
• Proved and probable (marketable) reserves – The ‘economically mineable’ part of a coal resource. This extraction may require further infrastructure and investment.
• Additional resources – The amount of coal that has been measured, indicated, or inferred from geological information, and that the company believes there are ‘reasonable prospects’ of extraction. This extraction will almost certainly require further infrastructure and investment.
When it comes to oil and gas, we’ve differentiated between:
• Developed reserves (2P) – The ‘best estimate’ of the amount of oil and gas the company anticipates is commercially recoverable from existing wells and facilities.
• Undeveloped oil & gas reserves (2P) and resources (2C) – The ‘best estimate’ of the amount of oil and gas the company anticipates is commercially recoverable (2P) and potentially recoverable (2C) through future significant investments.
AGL and Origin both disclose the annual emissions of each of their power stations, as well as their planned closure dates, making it more straightforward to calculate the future emissions of each company’s plans. You can read the full methodology and definitions at the bottom of this page.