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How Much Green Pressure Do Oil Companies Feel from Financial Markets?

Outlet: Kleinman Center for Energy Policy
Wharton Climate Center Faculty Co-Director Arthur van Benthem explores what one oil company’s transformation into a wind energy superpower signals for the industry at large.

“There is mounting evidence that climate risks are priced into financial markets and investment decisions. But if, despite such perceived risks, the core business looks to be highly lucrative, there is also pressure on firms to stick with the status quo,” writes van Benthem. “Climate risk for oil companies is mostly regulatory risk. Low-carbon policies can change the profitability of brown vs. green. If we truly want financial markets to push oil majors to become green superpowers sooner, there is no magic trick—we need more ambitious climate policies.”