Methane Emissions are Risky Business for Investors

No one likes uncertainty, least of all investors. From changes in interest rates, to supply chain disruptions, the list of risks investors must monitor is long and growing. Good, actionable information is investors’ most important tool for risk management and integral to successful investing. Without proper data, investors are flying blind.

Rising-Risk-coverA new report published by EDF this week  throws the spotlight on a growing risk for investors—methane emissions from the oil and gas sector. As so clearly demonstrated by the ongoing and massive leak at Aliso Canyon, methane emissions pose a multitude of expanding risks, with both short and long-term consequences.

Three key risks from oil & gas methane

At 84 times more powerful than carbon dioxide in the short-term, methane emissions represent a potent and fast-emerging form of carbon risk. In a world looking to reduce carbon pollution, methane emissions pose regulatory, reputational and economic risks. Preparedness to comply with forthcoming rules varies across the industry, methane undercuts natural gas’ ability to play a role in a carbon-constrained world, and emissions of methane are lost product amounting to $30 billion a year globally.

Investors should be asking themselves these questions:

  • Do you know how much money your oil and gas companies are losing?
  • Do you know if they have a plan to reduce emissions to limit impacts?
  • Do you know how prepared they are to comply with forthcoming regulation?

It’s difficult to find out, and that’s a problem. Read more