Carbon Tracker

Why do investors who clearly understand climate risk so often struggle to act on it? That tension is the subject of Episode 5 of Capital in Transition, where Harry Benham speaks to Amy Owens, a financial policy analyst at Carbon Tracker, about her report Ambition Under Pressure. Her case study is Norges Bank Investment Management (NBIM), manager of Norway's $2 trillion Government Pension Fund Global. NBIM has built one of the most advanced climate and nature risk frameworks of any large asset owner – its own stress tests point to physical climate losses several times higher than standard market models imply. Yet that lead hasn't reshaped how it invests: at the time of the report, unlisted renewable energy infrastructure made up just 0.4% of the portfolio, against a permitted 2%. The causes are structural, not a failure of understanding. Institutions are organised around sectors, benchmarks, mandates and geographies – not around old energy system versus new. Performance is judged over months, not decades. As Amy puts it, "being wrong on your own can be more damaging than being wrong alongside everyone else." Her sharpest observation is about markets themselves: "Markets price information quickly, but they don't always price structural change quickly." When that holds, prudent caution can quietly tip into delay; leaving portfolios exposed to a repricing they can see coming but haven't yet acted on. Listen to the full episode here: https://lnkd.in/eK2qPNWk

Two pieces crossed our desks this month, both challenging how the energy transition is being measured (see comments). One showed grid utilisation across 13 major regions falling from 53% to 33% since 2005: large additions of renewable capacity, but very little retirement of fossil capacity. The other challenged the EU’s proposed 46% electrification target, arguing that the final-energy arithmetic implies a much larger turnover of vehicles and heating systems than the headline suggests. Both raise legitimate questions. Together, they also reveal a broader issue in how the transition is being analysed.   A power plant has at least four relevant numbers: its capacity, its generation, its utilisation and its economic value. Some of today’s transition debate selects one and treats it as all four. Thunder Said is right that thermal capacity is not being retired as renewable capacity is being added. But that alone does not tell us whether those thermal assets are still generating, earning or retaining value in the same way. The choice of time period also matters, and Carbon Tracker is exploring how these relationships have evolved through both the fossil-only era and the subsequent period of rapid renewable growth. Liebreich in his piece is also right that the EU target translates into a much larger replacement of vehicles and heating assets than the headline number might suggest. The next step is to translate that target into the physical system: capital investment, grids, electricity demand, storage and fossil-fuel displacement. Targets have two functions. They must survive technical scrutiny, but they also establish priority and coordinate investment. Carbon Tracker is beginning to ask how old-system metrics translate into new-system assets. Capacity is not generation. Generation is not value. And an energy target becomes useful when it decides what must actually be built.

In this episode of the Asia Climate Finance podcast, Ben Scott, Head of Energy Demand at Carbon Tracker, discusses why some carmakers remain heavily exposed to oil demand, the 33% gap in reported Scope 3 emissions, China's growing competitiveness, and what the EV transition means for automotive investment. 👇

Tomorrow, Wednesday 8 July, 3pm, the Commons Energy Security and Net Zero Committee questions the Climate Minister as part of their inquiry into the UK and international climate policy. Richard Folland, Head of Policy at Carbon Tracker, gives oral evidence alongside Professor Joeri Rogelj (Grantham Institute, Imperial College London), Dr Matt Webb (E3G) and Ana Yang (Chatham House). The panel covers reform of the #COP process and newer models of climate leadership, including the coalition behind the first global summit on phasing out fossil fuels, held in Santa Marta, Colombia. Climate Minister Katie White OBE MP OBE MP responds afterwards. Watch live here: https://lnkd.in/eYnmsxHQ

Following the NED Climate Governance Programme in Paris earlier this year, the full set of 15 rapporteur reports is now available. The reports cover scenario planning, climate litigation, audit, transition planning, fiduciary duty, capital allocation and board oversight. They are designed as practical reference materials for non-executive directors and others advising boards on climate risk and strategy. We were glad to take part with Barbara Davidson, our Head of Capital Markets Transparency, co-hosting the Integrating Climate Transition into the Audit and Audit Committee workshop on how Audit Committees and External Auditors “incorporate climate risk factors into financial reporting and audit processes, while identifying opportunities for enhanced financial performance and resilience.” Read the reports here: https://lnkd.in/ewcmPPFH

Carbon Tracker has joined more than 200 investors, businesses and NGOs in calling on the EU to maintain its moratorium on new Arctic oil and gas development. As the EU revises its Arctic Strategy, the signatories argue that new Arctic oil and gas projects would not address Europe’s near-term energy security needs and could increase long-term exposure to fossil fuel infrastructure. There are three core reasons for this. New Arctic projects have long development timelines and would not provide a near-term supply response. If the EU meets its 2040 climate targets, existing gas infrastructure across Norway, the UK and the EU should be sufficient. Norway’s Arctic reserves are less commercially viable than official estimates suggest, while new pipeline infrastructure would require major investment and long-term contracts, increasing the risk of fossil fuel lock-in beyond 2050. Arctic energy infrastructure near Russian waters also raises geopolitical and security concerns. Together, the signatories represent more than €1 trillion in assets under management. #EnergySecurity #OilAndGas #ClimateRisk #Arctic

We’re hiring! Tracker Group – home to Carbon Tracker and Planet Tracker – is looking for a Director of Operations to join our Senior Leadership Team. This is a pivotal role at the intersection of finance, sustainability and public interest, helping to strengthen the operational foundations behind world-class research and impact. If you’re a collaborative leader with experience across operations, finance, governance and organisational strategy – and want to help drive the transition to a resilient, net-zero and nature-positive future – we’d love to hear from you. Apply here: https://lnkd.in/exEwM8G8

Good to see this guide from Accounting for Sustainability (A4S) published following its launch at the London Stock Exchange. We welcomed the opportunity to review and contribute to the guide, which supports pension fund chairs and trustees in using scenario analysis more effectively at board level. Scenario analysis can help long-term investors navigate systemic risks such as climate change, nature loss and geopolitical instability, but only if boards are able to test assumptions, understand model limitations and use the outputs to inform strategic decisions. A useful contribution to an area where better governance and more informed challenge are needed. Read the guide here: https://shorturl.at/wzRSM

What began in Santa Marta is now entering its next phase. In this interview from We Don't Have Time’s broadcast hub, Richard Folland, Head of Policy at Carbon Tracker, joins Vicky Sins of the World Benchmarking Alliance, Martina Otto of UNEP’s Climate and Clean Air Coalition Secretariat, and Molly Walton of We Mean Business Coalition to take stock of the Santa Marta Process and the coalition of willing governments and partners working to advance the transition away from fossil fuels. The discussion looks at how national roadmaps for the transition away from fossil fuels are beginning to take shape, what needs to happen next, and what progress should be expected by COP31. Watch the full session here: https://lnkd.in/eDyn8HY7

A substantive discussion convened by ClientEarth during #LCAW2026. 👇 From Carbon Tracker’s perspective, the capital markets dimension is central: investors need clearer information on how oil and gas companies are accounting for transition risk in disclosures, reserve valuations and decommissioning liabilities. The event recording and forthcoming research from Carbon Tracker, ClientEarth and UCL will follow shortly.