Air pollution is produced during the production and consumption of energy. The burning of fossil fuels contributes to 89% of global CO2 emissions. However, 300 of the top companies control that the majority of fossil fuel production and reserves are publicly listed companies. This calls into question who supplies their operations and what are their motivations.
Turning to investor relations is key to understanding the central issue of environmental pollution. From 2016 to 2018, indices run by the 10 largest asset management groups increased from 20% to 120%. 2 Degrees Investing attributed that the increase in investors looking for indexes contributed to this rise. Nonetheless, during the invasion of Ukraine by Russia, oil and gas prices immediate trended upwards, with the prices of oil reaching almost $140 — the high of 2018.
COVID-19 and the prospect of money reveals a harsh truth — investors are more concerned about money than achieving and contributing to environmental goals. Greenwashing is a tactic used by companies to appear as if ESG goals are central to their management.
Accusations of greenwashing will inevitably surface as the oil and gas industry attempts to re-establish trust with the now more environmentally conscious population. For instance, oil and gas giant Exxon Mobil was called out for spreading falsehoods so as to encourage continued support for natural gas. The 350 advertisements in New York alleged the high costs of replacing gas-powered appliances with electric ones; in contrast, it highlighted its efforts to sustain wind energy in Canada.
Of course not all business strategies will be as blatant. Others will practice greenwashing tactically and float under environmentalists’ radars. These will be more difficult to uncover but hopefully investors and shareholders will hold their public listed companies accountable.
Hopefully, the environmentalist agenda raised during the onset of the pandemic will continue to hold strong in the years to come. Combating air pollution requires long term commitment. Looking at investors and publicly listed companies shows the partnership needed to combat air pollution and find more sustainable practices in the usage and production of energy.