In 2022, for the first time ever, global investments in renewable energies topped investments in oil and gas extraction. According to independent firm Rystad Energy, investments in renewables will be $494 billion while investments in oil and gas will be $446 billion. It’s one important sign of how banks and other investment firms are increasingly placing their bets on the clean energy future.
Now, it’s not all roses. Some 80 percent of major banks’ total energy portfolios are still centered on coal, oil, and gas. And US banks like JPMorgan Chase, Citibank, Wells Fargo, and Bank of America remain some of the biggest backers of dirty fuels. But a growing number of public and university pension funds are pulling out of fossil fuels altogether. That has the fossil fuel financiers spooked, as you can tell by listening to their overheated reaction to what they call “woke capitalism.” You know you’re winning the public debate when the other side is acting defensively.
Fossil fuel financiers and their political allies are no doubt anxious because they can see the long-term trends. In October, the International Energy Agency released a forecast showing that total global demand for fossil fuel energy could peak within a decade. A dollar invested in fossil fuels today runs a real risk of being a stranded asset 15 years from now. And that’s why the savviest investors are putting their money elsewhere—a story that you’ll likely be reading much more about in the year to come. – Sierra Club