Enormous amounts of money flow into the fossil sector, despite guidelines and voluntary commitments. As of January 2023, more than three trillion US dollars (2.73 trillion euros) flowed into shares and bonds of oil and gas producers and companies in the coal industry. This has now been revealed by the analysis of the NGOs led by the German organization urgewald, including ATTAC Austria and Greenpeace.
In total there are around 6,500 companies, mainly asset managers, banks, insurance companies, hedge and pension funds. Nearly two-thirds (64 percent) of the money goes to oil and gas, with the rest going to coal. And by far the largest investors are in the USA: They account for almost two thirds with around 1.975 trillion dollars. Twelve percent come from Europe (mainly Great Britain, Norway and Switzerland), followed by Canada and Japan.
Two US giants as the largest chunks
According to the study, the world’s largest investors in fossil fuels are the financial services provider Vanguard and the investment company Blackrock, each with more than 260 billion US dollars. Together they represent 17 percent of all institutional investments in fossil fuel companies. While Vanguard shows no intentions to exit low-carbon business models, Blackrock claims to be a sustainability leader, the report says. Although the company embarked on a new coal strategy in 2020, it remains the world’s largest investor in companies developing new coal power plants, mines and coal infrastructure.
The first non-US investor, in fifth place, is Saudi sovereign wealth fund Public Investment Fund. Also on the list are JPMorgan Chase and Warren Buffett’s Berkshire Hathaway.
Raiffeisen, Erste cannot understand the figures
But local companies are also among them. According to the data, Austrian investors held shares and bonds of oil, gas and coal companies worth 1.25 billion euros. Accordingly, the Erste Group put more than 280 million dollars, Raiffeisen more than 780 million dollars in the fossil sector in Russia. Raiffeisen is also among the top ten foreign investors from Lukoil, Novatek and Rosneft. According to the report, around 90 million euros are invested in Gazprom shares.
In any case, the domestic banks cannot understand the allegations. The Erste Group said that the figures circulated by the NGOs could not be commented on or verified, the Ö1-Morgenjournal reported. According to the last official assessment at the end of February 2022, the share of Russian equities in the funds managed by the asset manager Erste Asset Management was around 0.1 percent, Erste told Reuters. The fossil portfolio is currently being gradually reduced to zero.
Raiffeisen Bank International said on Thursday that the “figures on alleged oil, gas and coal investments by Raiffeisen Bank International are wrong”. It is also wrong that the bank holds shares in Russian oil and gas companies. They withdrew from the financing of Russian oil and oil products before the relevant sanctions came into force. In addition, guidelines for oil and gas investments have been defined. For example, deals with Arctic oil and gas, Amazon oil, tar sands oil, fracked oil and gas, ultra-deepwater drilling and liquefied natural gas (LNG) are excluded.
shipment notice
On Thursday at 10:30 p.m., “Eco” addresses the question of why Austrian companies are hesitant to leave Russia – more on tv.ORF.at.
According to ATTAC, however, the investigation lists investments from the entire Raiffeisen Group, and it is not broken down from which country the funds come. However, Raiffeisen Russia is 100 percent owned by the Raiffeisen Group based in Austria.
The RBI Group has been considering selling its Russian business for a long time. More than a year after the start of the Russian war of aggression against Ukraine, the vast majority of Austrian companies are still active in Russia, as reported by the ORF business magazine “Eco”. The investment stocks of Austrian companies in Russia calculated by the National Bank also show that domestic companies have hardly withdrawn investments from Russia since the beginning of the war.
ATTAC to ban fossil investments
The globalization-critical NGO ATTAC, involved in the investigation, calls for a ban on fossil investments in view of the figures. “Voluntary commitments” by the financial sector have been proven to be insufficient, according to Mario Taschwer of ATTAC Austria. Despite all the commitments and climate goals, there is still no regulation that restricts or prohibits fossil investments. The federal government should also work for corresponding rules, but the influence of the financial sector, “especially the power of Raiffeisen”, is a major obstacle, according to Taschwer.
Greenpeace also considered existing guidelines to be toothless, and there were hardly any possibilities for sanctions. “In times when we are already feeling heat waves, flood disasters and other extreme weather events, three trillion US dollars still flow annually into the financing of coal, oil and gas and thus drive the climate crisis forward,” says Jasmin Duregger from the environmental protection organization.
