November 12, 2021 | International Financing Review | 1 minute read

Bracewell’s Jason Fox recently told International Financing Review that more thought needed to go into how to stop a “potential collision” between the E and S of ESG.

“The whole ESG approach, as driven by COP26, seems to be aimed first and foremost at reducing exposure to the fossil fuel sector rather than helping the energy transition be achieved,” said Fox. “Some of the majors and supermajors most committed to the energy transition are being penalized for continuing to be in the upstream sector even though it is the cash flows from their upstream assets that are funding their investment in the energy transition.”

Over the last few weeks, delegates at the COP26 climate change conference have urged banks in particular to reduce the proportion of their lending and other financing directed at fossil fuel extractors and energy providers relying on those sources.

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