Market debut for world’s biggest polluter must be a rallying cry for climate action

(The Guardian, 8 Dec 2019) Aramco’s flotation may have been scaled down, but it shows that capitalism and carbon still go hand in glove.

In less than a week the most valuable company in history will make its debut on a publicly traded market. Saudi Aramco is both the most profitable and the most polluting company of all time. Its looming $1.7tn (£1.3tn) market listing is also evidence of the gaping chasm between Europe’s growing climate movement and the carbon addiction the rest of the world just cannot kick.

A year that has seen the most determined green investor activism, fossil fuel divestments and climbing climate targets will end with the largest single fossil-fuel binge in investment history.

Saudi Crown Prince Mohammed bin Salman put in motion plans to offer international investors the opportunity to own a piece of the world’s biggest oil company in 2016, only months after governments in Paris had agreed plans to tackle the climate crisis. Nonetheless, the world’s biggest investors, from Wall Street to the largest financial centres in Europe and Asia, still clamoured for a chance to help bring Aramco to market.

The scale of the world’s biggest IPO has since been scaled back in line with a waning western appetite for a company indelibly linked to the Saudi regime and its flaring geopolitical tensions. When Aramco makes its debut later this month, it will be on the local Riyadh stock exchange, for the dubious benefit of investors based almost exclusively in the Middle East. The plans for a second, international, listing are gone, as is the hope of a $2tn valuation, but Aramco’s failure to live up to Prince Mohammed’s desire for a place in the global investment community should not be chalked up as a victory for ethical investment.

Despite the cold feet of western banks, the float still attracted investor interest equating to more than five times the number of shares on offer. Aramco will still raise $25bn for the Saudi government, breaking the record set by China’s online retail giant Alibaba. It will also topple Apple – worth more than $1tn – from its position as the world’s most valuable public company. Its market capitalisation will tower above the combined value of the next five largest oil companies.

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The Guardian, 8 Dec 2019: Market debut for world’s biggest polluter must be a rallying cry for climate action