By Ross Kerber
Jan 14 (Reuters) - Investors are judging how well energy
companies have reoriented their businesses to cut emissions as
they weigh activists' calls for divestment, climate finance
specialists said on Thursday.
Growing differences between oil majors have clarified when
companies are positioned to achieve "net-zero" emissions,
becoming more focused on renewable power and offsetting
remaining greenhouse gas emissions with measures like carbon
sequestration or conservation efforts, specialists said at a
Reuters Next panel held online.
"We differentiate between companies that are genuinely
trying to manage the transition, and those that are not," said
Adam Matthews, a Church of England Pensions Board officer who
oversees its engagement with companies in its portfolio. The
church manages funds in excess of 2.8 billion pounds ($3.8
billion).
He cited Royal Dutch Shell Plc and Occidental
Petroleum Corp as companies taking positive steps, and
said Exxon Mobil Corp is "at odds" with the others'
approach.
Shell and Occidental have set net-zero targets; Exxon CEO
Darren Woods said in December that "we respect and support
society's ambition to achieve net zero emissions by 2050."
Social pressures are a major motivation for the energy
companies as they transition their business models, said Sven
Reinke, senior vice president at Moody's Investors Service,
another panel speaker. "A company that is at odds with society
will sooner or later face financial difficulties," he said.
However investors will also watch companies' ability to
generate cash, Reinke said, noting some like Shell have cut
their dividends. "The real risk for these companies is they
might not be able to keep their investor base," he said.
John Flint, former group chief executive at HSBC Holdings
Plc, said oil majors should consider running their own
"stress tests" on the climate aspects of their operations, much
as banks were required to do after the financial crisis.
While the prospect might seem daunting to energy executives,
Flint said that having been through the experience as a banker,
"there's nothing to be afraid of."
For more coverage from the Reuters Next conference please
click here or www.reuters.com/business/reuters-next
To watch Reuters Next live, visit https://www.reutersevents.com/events/next/register.php
(Reporting by Ross Kerber. Additional reporting by Megan
Davies; Editing by Lisa Shumaker)