Financial experts have sent a clear signal that investors are growing concerned about the longterm viability of tar sands oil and other highly polluting fossil fuel industries.
In a new report by Standard & Poor’s (in partnership with the Carbon Tracker Initiative) the creditworthiness of firms investing in Canadian tar sands is being placed under scrutiny. The analysis compiles a series of scenarios to assess how two global oil giants — BP and Shell (along with three Canadian firms investing in tar sands) — would be impacted by new climate policies designed to reduce greenhouse gas emissions. The report showed that the smaller Canadian firms would face downgrades in less than 5 years, and concluded that new policies could lead to a ‘stress scenario’ for many major oil investors, where a decline in oil prices would put pressure on cashflows and lead to dividends being cut or projects cancelled.