Early this week, the London Stock Exchange decided to call out oil and gas companies.
According to the Financial Times article, BP, Royal Dutch Shell, and other UK-listed exploration and production companies are now grouped in the non-renewable index, which was previously called “Oil & Gas producers”. Green energy producers, formerly indexed as “alternative energy” were also reclassified as “renewable energy”.
‘Oil’ and ‘gas’ become dirty words in FTSE rebranding https://t.co/iu3gwFnWvr via @harrydemps "The London Stock Exchange caught many by surprise this week when a little-known rule tweak relabelled a group of oil and gas producers as 'non-renewable energy'."— Anjli Raval (@AnjliRaval) July 3, 2019
The move by FTSE is a sign of the mounting pressure from investors on fossil fuel companies to decarbonize their businesses.
European firms have been investing in alternative plays
BP and Shell are among many other international firms investing in alternatives and lower carbon technologies. This week BP announced a $30M investment in Calysta, a Silicon Valley startup that aims to help feed the world by turning natural gas into food for fish farms and livestock. BP has also announced it would purchase fuel and products from Brightmark Renewables, the first commercial plant in the USA to convert plastics to fuel.
Meanwhile Shell is investing in its electric footprint in the USA. The company's chief leading the alternative energies division Maarten Wetselaar says Shell could be the world's top power company by 2030.
A commitment to climate
Both companies are a part of a industry wide climate investment initiative, OGCI, a voluntary CEO-led initiative taking practical actions on climate change. The member companies leverage our collective strength to lower carbon footprints of energy, industry, transportation value chains via engagements, policies, investments and deployment.
Pope Francis calls on leaders to accelerate the energy transition
In June, during a two day summit, Pope Francis called on leaders to accelerate the transition asking for carbon pricing schemes and greater transparency in reporting climate change risk.