WHO ARE WE?
Carbon Tracker Initiative is a non-profit independent financial think tank that carries out in-depth analysis on the impact of the energy transition on financial markets and the consequences of potential investment in high-cost, carbon-intensive fossil fuels. We provide data and asset-level analysis to various stakeholders to allow them challenge business as usual fossil fuel demand growth assumptions; to challenge unnecessary capital expenditure in new fossil fuel production; and to engage with company boards about corporate strategy amidst a fast-moving energy transition. This is to ensure that financial stakeholders support an energy system that stays within a 1.5˚C global average temperature rise.
Our team of financial market, energy, legal, and communications specialists apply ground-breaking research using leading industry databases to map both risk and opportunity for investors on the path to a low-carbon future.
Our mission
Our objective is to advocate for, promote, and achieve an understanding of the financial and environmental risks associated with investing in carbon, encouraging investors to act.
Our mission is to help markets and state actors align energy system capital allocation to the finite planetary limits of the Paris Agreement.
Our success is measured by our ability to mobilise investors, policymakers, and regulators into action around climate risk resulting in an orderly wind down of fossil fuels.
ABOUT OUR RESEARCH
In 2022 we saw global shocks catalysed by Russia’s invasion of Ukraine, just as the world was beginning to recover from the effects of the COVID-19 pandemic.
Prior to the impact of these events, most economies were shaping policies, financial regulations, and market mechanisms around their climate goals. Whilst this is still true, the extra stress caused by the Ukraine war has resulted in a new urgency and impetus for accelerating the energy transition.
Energy markets responded by looking for new mechanisms and out-of-market approaches, to wean off fossil fuels or (in the case of energy intense economies) secure investments for system stability – including creating greater efficiencies and security.
The ongoing effects of the conflict have brought energy security and supply chain issues to the forefront for policymakers, leading some economies such as Germany, Japan, and South Korea to prioritise affordability and security over environmental commitments. This is particularly evident in OECD and non-OECD countries, as well as energy-intensive export-oriented economies like Brazil, India, and Indonesia, that aim to balance heavy industries and social stability.
As the world confronts these challenges, our work has become more important and urgent than ever.
Our in-depth country research enables investors to assess climate risks that stakeholders may consider in their transition plans.
By focusing investors on climate change as a financial threat we can accelerate the shift away from risks posed by fossil fuel stranded assets, resulting in a managed and swift transition. Providing company profiles informs investors and asset managers on specific risks carried by fossil assets, against projected models of the energy transition and the companies’ own Net Zero statements.
The scientific data analysis and financial reasoning that drives our work is valued not only by investors, but by a wide range of elected officials, regulators, policymakers and NGOs. Even in highly regulated markets, our research assists stakeholders in influencing decision-makers to shift away from fossil fuel technologies on economic grounds.
INVESTOR OUTREACH
Our emphasis on creating quality impact began to manifest in meaningful ways, as evidenced by our enhanced interactions with State Street, Fidelity, Vanguard, and Aegon, and esteemed boards like LionTrust. We conducted more than 81 investor meetings, establishing a robust foundation of relationships with industry stakeholders and specialists.
We focused on active engagements with asset owners, including BT, the New York State Common Retirement Fund (NYSCRF), and various UK local authority pension fund Trustee boards. Our engagement with NYSRF resulted in the fund improving its decarbonization analysis framework and applying greater scrutiny to its engagements with oil and gas companies concerning their transition plans.
In addition, we aided the Presbyterian Church in securing a list of meaningful demands from Entergy through target analysis, drafting shareholder proposals, and analysing withdrawal proposals. Our work with the Department for Work and Pensions led them to change their advice to pension funds and influenced future decisions by financial actors.
Climate Action 100+ (CA100+) - Our work assesses CA100+ focus companies against the benchmark, with updated analyses of all 157 companies to the indicator in October 2022. Our Oil, Gas and Mining, Power and Utilities and Automobile teams continue to produce analyses for all CA100+ companies, assessing companies' climate transition preparedness and alignment with the goals of the Paris Agreement. Through the CA100+ platform, we provide analytics to asset owners to improve their climate-related engagement with companies.Accordingly, we are also growing the team to work on this project, as well as collaborating with our sister company Planet Tracker. Partnerships have included a joint response with Planet Tracker to the International Sustainability Standards Board’s sustainability and climate disclosure exposure drafts, and a joint response with Ceres on the Public Company Accounting Oversight Board (PCAOB) Post Implementation Review on the use of specialist and estimates.
Sarasin & Partners, a leading investment manager in the UK, utilised our CA100+ accounting and audit assessments for key target companies, including Equinor, to evaluate their climate-related disclosures. This data directly influenced the firm’s decision to vote against Equinor’s Transition plan and material assumption risks in their account books (Resolution 9 & 10) as it failed to align with the 1.5-degree pathway.
Our CA100+ data is also being used to urge shareholders to vote against Michael Wirth (CEO) and Ronald Sugar (Lead Director) for their failure to adequately respond to majority vote resolutions on Greenhouse Gas Reductions and Climate Lobbying. This is a powerful tool to hold key decision makers accountable and drive real change within the industry.
SPECIAL INITIATIVES
To increase our impact, in 2022, we participated in the following programs and organizations:
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Global Registry of Fossil Fuels - We partnered with Global Energy Monitor to launch the Global Registry of Fossil Fuels to foster transparency on fossil fuel production and make governments more accountable. The Registry serves as a policy tool to measure what is being dug out of the ground, the associated emissions, and how those relate to a 1.5°C compatible pathway.
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Ongoing interactions with the Financial Conduct Authority (FCA) - In 2022, we ramped up engagement with the Financial Conduct Authority to discuss the Unburnable Carbon: Ten Years On report and the work of our Accounting, Audit and Disclosure Team.
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Glasgow Financial Alliance for Net Zero (GFANZ) – We provided feedback on the GFANZ publications Expectations for Real-economy Transition Plans and The Managed Phaseout of High-emitting Assets. Our work with GFANZ enabled us to share information on the Net Zero commitments of financial institutions with UK parliamentarians and opposition politicians, as well as other NGOs and stakeholders. Our team was involved in the UN Race to Zero criteria consultation, the UN High Level Expert Group on Non-State Entity Net Zero Commitments consultation and UK political consultations including the Transition Plan Taskforce Call for Evidence, and GTAG Survey on UK Taxonomy.
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High Ambition Coalition on Net Zero - We reviewed the feasibility of creating a High Ambition Coalition on Net Zero. We identified financial institutions with strong fossil fuel exclusion policies to form an investor alliance of institutions that are aligned with a 1.5ºC temperature pathway. We continue to engage with investor alliances and initiatives to ‘host’ a statement of commitment to ending fossil fuel expansion, signed by those identified as having strong investment policies. Our team coordinated inputs and feedback on this idea from the Climate Champions office, as well as through Ceres and the NY Comptroller’s Office, as part of a Rockefeller Brothers/Wallace Global Fund led initiative.
COMMUNICATIONS
Media
Our communications outreach remains vital to disseminate our research and analysis. Publication highlights from 2022 include the New York Times ‘Spiking Energy Prices Complicate the Fight Against Global Warming’ and a TIME feature, ’Europe’s Green Energy Plans Are Threatened by the Need to Wean Itself Off Russian Gas ‘ In total, for 2022, we secured over 6,600 press citations.
Events
During 2022, we engaged with our audiences in over 220 events, across in person and digital platforms. Our digital events programme continues to strengthen, with increased attendance rates and follow-up engagement with policymakers and investors/asset managers, whilst in person events have increased this past year, following the pandemic. We also continued partnering with major news outlets and event organisers in media outreach, including the Financial Times, Reuters, The Economist and highly regarded academic institutions.
Distribution
In 2022, we had 64,000 visitors the website and over 476,000-page views. To amplify our research further, we use our monthly newsletter, with a total of 8,430 subscribers, and targeted communications to our CRM database, which grew by a massive 65% in 2022 to over 27,000 contacts. Our digital communications channels continue to grow, with a presence across: Twitter, LinkedIn, Facebook, Instagram and the most recent addition, Mastodon.
