Climate goals could sink oil demand from mid 2020s -LGIM

(In April 11 story, corrects figure in third paragraph to 110million, instead of 110,000 million.)

By Susanna Twidale

LONDON, April 11 (Reuters) - Legal and General InvestmentManagement (LGIM), which manages assets worth 1 trillion pounds($1.3 trillion) worldwide, said oil demand could start todecline from 2025 if countries impose strict policies to curbclimate change.

The impact of moves to ensure the global rise in temperatureremains below 2 degrees Celsius could be such that by the early2040s oil demand would have dropped by around 40 percent fromcurrent levels to below 60 million barrels a day, LGIM said in areport published on Thursday.

However, if no new climate policies are implemented, oildemand could plateau at around 110 million barrels a day fromaround 2030, according to the study.

LGIM, the fund arm of insurer Legal & General,carried out the research with management consultancy BaringaPartners to identify companies that could benefit from effortsto curb climate change, but that would not be negativelyimpacted if such policies fail to materialise.

"It's hard to argue that if oil demand starts to go intofree fall, which is what we see as plausible, that ... the oiland gas industry as a whole remains as intrinsically asprofitable as it does today," said Nick Stansbury, LGIM's headof commodity research.

Even if demand slumped, some oil companies could still beattractive investments if they react to the threat and positionthemselves to compete in the shrinking market, he said.

LGIM, which invests in oil majors including BP andShell, last year joined a group of investorsrepresenting assets worth more than $10 trillion calling on theoil and gas industry to better align their businesses withclimate goals.

It was also a signatory to a letter by investors sent to theInternational Energy Agency asking it to develop a forecastingmodel to take into account the lower emissions necessary tolimit global warming to 1.5 degrees Celsius.

The Paris climate agreement, adopted by almost 200 nationsin 2015, set a long-term goal to limit global warming to "wellbelow" a rise of 2 degrees Celsius above pre-industrial timeswhile "pursuing efforts" for the tougher goal of 1.5 degrees.

In June 2017, President Donald Trump announced that theUnited States, one of the world's largest emitters of greenhousegases, would withdraw from the Paris agreement.($1 = 0.7642 pounds)(Reporting by Susanna Twidale, editing by Mike Harrison)