November 7, 2019 / 4:03 PM / 7 days ago

Tackle climate change or face funding pressure, gas conference told

PARIS (Reuters) - Investments in gas projects could dry up if the industry fails to demonstrate quickly that it is tackling climate change, a European gas conference heard in Paris on Thursday, a day after environmental activists disrupted the gathering.

The oil and gas industry is increasingly under pressure from investors, activists and policymakers to do more to curb greenhouse gas emissions in the fight against global warming.

Fund manager Nick Stansbury at British insurer Legal & General, which has over 1 trillion pounds ($1.28 trillion) under management, said much complacency remained in the gas industry.

“I have to warn you, for many ... investors, there is a growing presumption against giving any of our clients’ capital to you,” he told the gathering of gas industry delegates after it resumed on Thursday.

He added that investors were coming under increasing pressure over the financing of oil and gas projects.

“We are becoming a consumer-facing brand and yes, we are hugely influenced ... ultimately, we are agents, we act on our clients’ instructions,” he said, adding that the industry needed to change rapidly.

Many believe that although gas is a fossil fuel, it should serve as an efficient transition energy toward a low-carbon economy because it emits around 50% less carbon dioxide than coal.

But some are against it, like the activists who forced their way into the venue at the upscale InterContinental Paris Le Grand hotel and staged the sit-in.

Stansbury said the industry must show that it understands the seriousness of the issue and demonstrate pathways to bring down its emissions. Investments must align with the Paris climate agreement aimed at curbing global warming, he said.

Cristian Carraretto, an associate director of the European Bank for Reconstruction and Development, told the conference that the bank would invest in some fossil fuels for a few more years, but not coal.

While the bank backed gas as a transition fuel, it would no longer finance all oil projects, he said.

“Things are getting more and more difficult,” Carraretto said, adding that the transition was happening, but not fast enough to meet climate targets.

Reporting by Bate Felix; Editing by Dale Hudson

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