Russia is now attempting to…
Despite two major reports forecasting…
The oil industry is quickly turning into a pariah as more institutional investor are divesting their fossil fuel portfolios. The latest blow to oil’s popularity among investors came from French insurer Axa, the third-largest globally. Axa said in a statement yesterday that it will be divesting US$700 million worth of interests in Canadian oil sands production and pipelines.
The insurer said that oil sands are a very carbon-intensive industry “and a serious cause of environmental pollution,” and it would no longer invest in it. Axa will also divest some US$2.82 billion (€2.4 billion) from companies active in coal production and use.
The divestment targets will include companies that derive more than 30 percent of their revenues from coal, coal-plant builders, businesses with an energy mix that is more than 30 percent coal, and coal producers with production of over 20 million tons annually.
What’s more, Axa will also stop insuring “the main oil sands and the associated pipeline businesses” as well as coal projects, as this, the insurer says, would be the only consistent approach for it in light of the divestment strategy.
Axa’s did not say, however, that it was exiting the entire oil industry, and their website still promotes energy and chemicals underwriting, including exploration and production, refining, and even midstream projects such as pipelines.
Related: Why Is Canadian Oil So Cheap?
At the same time, the French insurer will up its investments in green energy substantially: by 2020 the company plans to have invested US$14.11 billion (€12 billion) in such projects. It originally planned to invest US$3.53 billion (€3 billion) in renewable energy by 2020.
The news from Axa comes shortly after the World Bank announced it will stop funding oil and gas projects in the developing world. Oil and gas investments account for about 2 percent of the bank’s US$280-billion asset base. The suspension of investments will be effective 2019, although the World Bank will make an exception for natural gas projects in the poorest countries in the world.
By Irina Slav for Oilprice.com
More Top Reads From Oilprice.com:
Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.