Environmental groups have warned the banks linked to Saudi Aramco’s planned market float that they risk financing the destruction of the planet by supporting the public listing of the world’s biggest oil producer.
The eight green groups, including Oil Change International and Friends of the Earth, warned that the world’s largest IPO would be “the biggest single infusion of capital into the fossil fuel industry” since global governments signed the Paris climate accord in 2015.
In a letter to the banks’ chief executives, including the bosses of HSBC and Goldman Sachs, the green groups warned that the listing would undermine efforts to cut carbon emissions in line with the Paris Agreement.
The letter also raised concern over the banks’ eagerness to help raise billions of dollars for Saudi Arabia “given the horrendous human rights record of the Saudi regime”.
“Recent examples of this include the role of Saudi agents in the brutal murder of Jamal Khashoggi in October 2018, and the involvement of Saudi forces in indiscriminate airstrikes on civilians in Yemen,” the letter said.
Major banks including JPMorgan, Morgan Stanley and HSBC were picked to play a leading role in the world’s biggest float when the plan was first announced in 2016. Since then, JPMorgan Chase, Citigroup, Credit Suisse, Goldman Sachs and Bank of America have all been linked to the mega-listing.
JPMorgan Chase declined to comment and the other banks did not respond to requests for comment.
“If you go ahead as lead coordinators in raising tens of billions of dollars for the world’s biggest climate polluter … it will be clear that your words of environmental and social concern are devoid of all sincerity, and that when push comes to shove your concerns for short-term profit outweigh all else,” the groups said.
The letter was also signed by the Rainforest Alliance Network, Sierra Club, Indigenous Environmental Network, 350.org, BankTrack and Share Action.
The letter comes after a Guardian investigation into the world’s 20 most polluting companies revealed Saudi Aramco as the biggest single contributor to the global climate crisis. The company has produced around 4.4% of the world’s total carbon dioxide and methane emissions since 1965.
Aramco is also expected to lead the growth in fossil fuel production between 2018 and 2030, the period in which experts have warned that climate action is crucial to prevent runaway global heating. Oil Change International estimates that the company will produce enough oil and gas to emit the equivalent of 27bn tonnes of carbon dioxide, or 4.7% of the world’s carbon budget, if governments hope to keep global temperatures from rising 1.5 degrees C above pre-industrialised levels.
The state oil giant is highly sought after by investors for its enormous oil reserves and world-leading profits. It reported profits of $46.9bn for the first six months of this year, down from $53.2bn in the first half of last year but still well ahead of the world’s six biggest listed oil companies combined.
Aramco produced 13.2m barrels of oil a day in the first half of the year, more than four times the rate of production of rivals such as ExxonMobil.