Despite extreme weather and previous commitments to reduce emissions, major energy companies have been quietly backtracking on their climate change promises.
Welcome back to the Climate Nexus finance newsletter – a regular update that looks at the big stories and players at the intersection of climate change, finance, regulation, and energy, with tips for the week ahead.
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Big oil ghosts on climate commitments
Despite extreme weather and previous commitments to reduce emissions, major energy companies have been quietly backtracking on their climate change promises. Amidst record-shattering profits and big bonuses for executives, oil and gas companies, including BP, ExxonMobil, and Shell, continue to advocate for fossil fuel production, citing the current dependence on these energy sources and the absence of viable alternatives. In a BBC interview, Shell CEO Wael Sawan stated that reducing oil and gas production would be “dangerous and irresponsible” as the world “desperately needs oil and gas” and the shift towards renewable energy is not progressing fast enough to replace it.
Sawan's comments, aired on what scientists believe may have been the hottest day in human history, conflict with Shell's previous commitments to reduce emissions. The company, which announced it would not increase investments in renewables this year, claimed to have already met its 2021 target for cuts, not through actual reductions but through asset sales, including selling drilling sites to ConocoPhillips. Meanwhile, Occidental Petroleum CEO Vicki Hollub is banking on speculative tech to get her out of this mess, saying that she thinks direct air capture of carbon “gives our industry a license to continue to operate for the [next] 60, 70, 80 years.”
Knocking on wood won't stop insurance crisis
The insurance market is on the brink of a crisis, with the American Automobile Association to stop renewing certain auto and home insurance policies in Florida. They join a mounting exodus of insurers from the Sunshine State, including Farmers Insurance, which left approximately 100,000 customers exposed when it departed. Floridians are now grappling with triple the national average in property insurance premiums. Fueled by climate change and increasingly frequent natural disasters, this retreat is more than just a Florida problem—it's a national alarm bell. Amidst this chaos, Florida Governor DeSantis optimistically urged Floridians to "knock on wood" for a disaster-free summer.
Bidenomics = more green bank money
Administration officials hit the road to promote “Bidenomics” as part of an “Investing in America” tour last week. This includes a whole heap of new money for a network of green banks. Vice President Kamala Harris called it “the largest investment in financing for community-based climate projects in our nation’s history.” More here.
New VC fund aims for the fences
A new kind of cleantech venture capital fund launched last week, blending money from traditional VC investors with cash from charitable foundations. Azolla Ventures, a project of Prime Coalition, raised $239 million to help get money to companies that can potentially unlock big climate benefits but might be too risky for traditional venture capitalists. They include Heaten, a firm developing super-charged heat pumps for industrial processes. Funga, a company optimizing the forest microbiome for improved carbon storage. And Scalvy, which is making modular electric vehicle drivetrains aimed at accelerating the rollout of EVs.
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