«Problems of economics and management of oil and gas complex»

Greening of the American financial institutions and de-carbonization of oil companies: a long way to net zero

UDC: 620.92
DOI: 10.33285/1999-6942-2022-9(213)-29-41

Authors:

¹ E.M. Primakov Institute of World Economy and International Relations, Russian Academy of Sciences, Moscow, Russia

Keywords: US financial institutions, national oil companies, net zero, greening of finance, green bonds, de-carbonization, energy transition, oil and gas sector

Annotation:

The article studies the role of the international (particularly the American) financial system in de-carbonization of oil and gas companies that account for a lion’s share of greenhouse gas emissions. In theory, financial institutions can make a major contribution to the achievement of net zero goals formulated by the oil and gas actors through redirection of financial flows from fossil fuels to clean energy. Indeed, today certain banks and investment funds either drastically reduce financing of hydrocarbon projects or divest securities of oil and gas companies from their portfolios. However, in practice, such greening of finance is rather controversial, since many American financial institutions are not ready yet to give up interaction with their profitable oil and gas clients, and they only insist that the companies act in a more sustainable manner. This controversy is particularly visible with respect to successful national oil companies that, with the assistance of the leading financial institutions, continue to raise large-scale funds at international debt markets, carry out major IPOs, and close huge infrastructure deals with institutional investors.

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