FFI Perspectives

For Earth Day: US Changes in Energy Policy and The Carbon Underground 200

By Lucy Di Rosa and Michael Palmieri

Several weeks ago, we posted a piece about how we thought the changes in direction in energy policy by the Trump administration could affect the transition to a clean-energy economy. As 192 countries around the world celebrate Earth Day this weekend, we know that climate change is on the minds of many, and that any major changes in policy favoring an increased reliance on fossil fuels will increase the many risks associated with climate change. Given that our work focuses on understanding and mitigating those risks from an investment perspective, we thought we’d post a brief follow-up that includes some insights about our own work on The Carbon Underground 200TM (CU200). As the US and the international community face uncertainty over the changes in direction by the Trump administration, we’re happy to report that, at least so far, we’re seeing an increased interest in our work.

Those familiar with FFI will know that the CU200 ranks the top 200 global, publicly-traded oil, gas, and coal owners by the carbon content of their reserves. Originally launched in the spring of 2014, the list was adopted by the international climate activist organization, 350.org, as the official list of the divestment movement. The CU200 rankings are widely recognized as a go-to list for fossil fuel divestment and are included in divestment screening tools such as As You Sow’s Fossil Free Funds. The CU200 companies are also used as a benchmark to track the performance of the Clean200,TM which ranks the largest publicly-listed companies by their total clean energy revenues.

On July 26, 2016, 105 days before the US presidential election, FFI published the latest edition of the CU200. Keeping in mind the two pivotal dates of November 8, 2016 (the date of the election of Mr. Trump) and January 20, 2017 (the date of Mr. Trump’s inauguration), it is interesting to analyze the monthly request trends for our CU200 list.[1]

Monthly Requests for the CU200, July 2016-March 2017

After the election, and likely reflecting the caution and wait-and-see attitudes of many, we saw a decline in requests from both asset managers and NGOs. However, even with the expected drop due to the holiday season, demand from individuals and asset owners remained steady.

Most noteworthy is the dramatic increase in requests since the inauguration of Mr. Trump, with asset managers and NGOs leading the charge. Not only have requests for the list been strong across all interest groups, but we saw an all-time record number of requests for the CU200 in March, surpassing those of August, 2016 (the first full month during which the 2016 list was available). To be sure, we are still in the early days of the administration, and much uncertainty remains, but our own experience thus far seems to indicate that interest in the CU200 is growing, not diminishing.

[1] FFI makes the CU200 list available at no cost by request to asset owners, non-profit organizations and the media, provided that they use the list for non-commercial purposes only. Use of the list for investment purposes is only permissible with a paid subscription. To request your copy of the CU200 or to download our 2016 CU200 report, click here.

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