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Industry must commit to halt all future fossil fuel extraction

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Mary Robinson attends meeting convened by Pope Francis with oil CEOs for dialogue on energy transition (Vatican Media)
Isobel
Friday, 14 June, 2019

Mary Robinson attended a meeting convened by Pope Francis in the Vatican on 13-14 June on “The Energy Transition and Care for our Common Home”, attended by CEOs of leading oil and gas companies, and financial investment funds. The meeting focused on the need for a just transition, carbon pricing and transparency in reporting climate risk.

 

Her speech called for rapid and urgent action from both energy and financial companies to end fossil fuel use and support a just transition to a zero-carbon economy that protects rights and livelihoods worldwide – the full text is printed below.

It is a great honour to be with you here today for this most significant of dialogues on one of the most urgent issues facing our world today: climate change.

I am fully aware that it will be a considerable challenge to find a consensus on a just energy transition given the diverse constituencies represented here and the broader range of stakeholders, shareholders and fund managers to whom you are accountable.

But I am sure we can agree on one critical point: we all owe a huge debt of gratitude to His Holiness Pope Francis for granting us the space and time to hold these crucial discussions in an atmosphere of calm and mutual respect.

We should all salute the exemplary courage the Holy Father has shown on climate change at a time when too many secular leaders, whether from government, finance or business, have spurned their responsibilities or prioritised short-term profits over sustainable strategies.

In preparing for this meeting, I was moved to read again the Holy Father’s words from last year’s inaugural energy transition dialogue:

“Political decisions, social responsibility on the part of the business community and criteria governing investments – all these must be guided by the pursuit of the long-term common good and concrete solidarity between generations. There should be no room for opportunistic and cynical efforts to gain small partial results in the short run, while shifting equally significant costs and damages to future generations.”

What could be more opportunistic and cynical than still seeking to exploit and extract fossil fuel reserves from under the ground, when the scientific evidence is abundantly clear that we need to end all combustion of fossil fuels by 2050 if we are to have any hope of keeping global temperature rises to below 1.5 degrees Celsius?

As UN Special Envoy on Climate Change in the period just prior to the Paris Agreement of 2015, I spoke at length on the need for a “just transition” to a zero-carbon, climate-resilient economy that provides jobs, dignity and opportunity for all.

The Holy Father makes it clear that those who most deserve climate justice are those who are the least responsible for fossil fuel emissions: the women and men who live in the least-developed countries, including small island states whose very existence is threatened by rising sea waters.

But I strongly believe that the principle of a just transition applies equally to the fossil fuel industries themselves. We know that fossil fuels are finite, and that there are increasingly stringent environmental, economic and ethical imperatives to keep them in the ground and pursue new, clean forms of energy production.

How will oil and gas companies manage this transition in a way that sustains their business, satisfies their regulatory requirements, retains their employees and enables their investors to meet their own fiduciary obligations?

Those of you around the table here are no doubt better qualified than I am to answer these complex questions.

But if I can draw on my own experiences in national and global politics, I would venture to suggest that what today may seem an obvious answer may very soon be crushingly irrelevant, as externalities weigh upon decision-making processes and the legal, political and economic environment changes at unforeseen speed.

The Governor of the Bank of England, Mark Carney, set out this challenge starkly in a recent article with his French counterpart François Villeroy de Galhau:

“Carbon emissions have to decline by 45% from 2010 levels over the next decade in order to reach net zero by 2050. This requires a massive reallocation of capital. If some companies and industries fail to adjust to this new world, they will fail to exist.”

The future of our planet will not be well served if the titans of the energy industry become obsolete and defunct, because they did not act in time to adapt to the realities of our changing climate and economic paradigms.

How much more profitable would it be, in every sense of the word, for your creativity, industriousness and capacity for growth and innovation to be placed at the service of a new vision of clean, renewable, sustainable and equitable energy production?

This is why I believe it is essential for the key players in the industry, and the investment community with whom it is so intertwined, to commit to radical, urgent but eminently feasible actions to help meet the goals of decarbonisation set out in the Paris Agreement and the UN’s 2030 Development Agenda.

This must include:

  • A firm and clear commitment to halt any and all plans for future fossil fuel extraction, whether through drilling, mining, fracking or any other forms;
  • Developing a comprehensive, transparent database of all existing fossil fuel assets and reserves.

Such a database would constitute a global registry of future emissions of carbon dioxide, in the form of existing and planned fossil fuel projects.

It would show investors that the companies are serious about providing adequate and substantive disclosure on how they are managing the business risks and opportunities associated with climate change and the transition to a low carbon economy.

Existing data already suggests that there are between five to seven times more proven fossil fuel reserves of coal, oil and gas that can possibly be burned given the level needed to stay well below temperature rises of 2 degrees.

A publicly-accessible registry, whether state- or investor-owned, would enable all stakeholders to organise a new plan for an orderly wind-down of pending or proposed projects – a just transition, in other words.

It would give clarity to investors, who hold an extraordinary latent power to further the sustainability agenda, and thus secure a long-term future for their own assets and investment strategies.

It would also enable all companies to maximise every last drop of existing reserves, rather than squandering valuable resources on future extraction which may never yield a cent of profitability.

I am under no illusion about the challenges the energy and finance industry faces in managing a just transition. But I am also under no illusion about the risks posed to every living person on God’s Earth if these challenges are not faced head on, with honesty, seriousness and integrity.

Let us listen to the children and young people who are striking every Friday, to remind us of the intergenerational injustice they fear will deprive them of a future.

We have been privileged to receive the Holy Father’s invitation. Let us not waste this precious opportunity in bickering, obfuscation or denial, but follow his lead and work together to secure our common future.

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