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How a little-known energy treaty could thwart global climate action
(Reuters, 20 Apr 2022) The Energy Charter Treaty allows companies to sue governments for lost profits and could be used to claim damages where states move to phase out fossil fuels.
As many publicly traded companies around the world hold their annual general meetings, climate-conscious shareholders are upping pressure on financial giants to slash their investments in coal, oil and gas - fast.
According to a recent report from green groups, fossil fuel financing from the world's 60 largest banks reached $4.6 trillion in the six years since the Paris Agreement on climate change was adopted, including $742 billion in 2021 alone.
But after a resolution filed by a coalition of investors, HSBC in March agreed to reduce its financing of fossil fuels in line with limiting global warming to 1.5 degrees Celsius, the most ambitious goal of the Paris pact.
Credit Suisse, Bank of America and Goldman Sachs, among others, are also facing similar demands from major shareholders, further turning up the heat on fossil-fuel producing companies.
At November's COP26 U.N. climate summit, meanwhile, many governments made landmark pledges to phase out coal power, including a commitment not to fund new plants overseas.
Yet the companies that mine, sell, use and invest in fossil fuels are not powerless in response to such existential threats to their business. They have a little-known but potentially powerful tool with which they can fight back.
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Reuters, 20 Apr 2022: How a little-known energy treaty could thwart global climate action
