"Carbon Tracker brings an unparalleled level of insight and analysis to the issue of fossil fuel stranded assets. Their work is invaluable."
Damian Carrington, Environment Editor at The Guardian
WHO WE ARE
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 in order to support an energy system that stays within a 1.5˚C global average temperature rise.
At its inception Carbon Tracker re-framed the climate problem as a financial risk, terming and popularising the key concepts the "carbon bubble”, "stranded assets", and “unburnable carbon”. Our work has moved these concepts from obscurity to the core of any discussion of climate change and financial risk management, helping to mobilise investors and financial regulators into action.
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. The average number of employees in the period was 26.
Carbon Tracker’s core competency lies in research and analytics. The research function is supported by the investor outreach and communications teams, whose key objective is to disseminate the research through events and the media directly to investors, regulators and financial commentators.
Carbon Tracker Initiative has offices in London, the United Kingdom and in New York City, USA. In the period under review (May-Dec 2019), our investor engagement team worked extensively throughout Europe and the United States. Our Power & Utilities also engaged substantially with local stakeholders in Japan, Vietnam and the Philippines to showcase the economics of coal in these regions.
WHAT WE DO
OUR MISSION AND GOALS
Carbon Tracker Initiative’s 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 vision is a climate-secure global energy system, where capital markets are aligned with the reality of climate change. We are helping to map the transition of the fossil fuel industry to keep global warming within a temperature increase of 1.5˚C and its corresponding carbon emission budget.
Our long term goal is an orderly wind-down of fossil fuel production and its unmitigated burning before breaching this budget. To support this goal, we provide analytical inputs for all major investors in fossil fuels to engage with companies to achieve a Paris-aligned low carbon transition.
This includes forceful stewardship from investors to company boards to focus on capital expenditure and planning for a managed decline, based on their adoption of Paris-aligned portfolios. We encourage investors to model “value at risk” to their investment exposures from companies failing to adopt this alignment.
Carbon Tracker is a think tank that “for years has been a leader in the financial analysis of the oil, gas and coal industries”.
German Daily Tagesspiegel (Taz)
MAY TO DECEMBER 2019
OVERVIEW
In 2019 our objective was to accelerate the energy transition by focussing on the most pressing and impactful research topics. For example, with regards to the power and utilities sector, we instigated and developed a strategic programme targeting East and South East Asia regions, drawing on the research of our Power & Utilities team to promote evidence-based messages about the economics of coal and to show that renewables are increasingly becoming a lower-cost alternative. 2019 also saw us expanding into a new workstream – Gas Power, building our capabilities and capacity to model and analyse the economics of Gas Power Generation.
For Oil and Gas, our approach was to counteract the narrative of continued growth by using the carbon budget framing, including “special pleading” by companies that plan to increase production even as they accept risks to energy demand and climate imperatives. The other main objective was to educate investors to challenge non-Paris compliant investments, illustrating the financial risks relating to stranded assets and encouraging financial actors to push the natural resources industry towards climate compliant commitments.
For Energy Transition, the focus was to fundamentally re-orientate the expectations, actions and disclosure reporting of both private and public actors away from an ‘inevitable’ business-as-usual world, in which a transition to a net zero pathway comes late, abrupt and involves significant economic disruption. This was achieved through two targeted research papers that reinforced the importance of the Inevitable Policy Response (IPR) Project.
Alongside our big picture analysis of fossil fuel industry sector trends, there has been growing interest and demand for Carbon Tracker’s individual company profiles, particularly for Climate Action 100+. Investors can now find regular commentary on fossil fuel companies through our reports and website blogs. One of the highlights of 2019 was the partnership with State Street Global Advisors, a major institutional investment manager, where Carbon Tracker representatives spoke at investor seminars around Europe on climate risk. These seminars were attended by pension fund trustees and finance directors and investment advisors.
On the Regulatory and Policy front, over the last few years, Carbon Tracker has been successful in embedding its narrative into mainstream investment decision making processes. This has been made possible through our pro-active investor and media outreach, engaging with influencers, key stakeholders and partners in the financial regulator and policymaker communities.
From May to December 2019, we spoke at over 100 events globally targeting investors, policymakers, energy companies and financial regulators.
In the Research section we present each of our sectors in terms of the sector objective, highlights in the year and impacts.