Santos (ASX:STO) share price slides as UN calls “death knell” on fossil fuels

A report has found both fossil fuel producers and governments need to act before climate change worsens.
The post Santos (ASX:STO) share price slides as UN calls “death knell” on fossil fuels appeared first on The Motley Fool Australia. –

The Santos Ltd (ASX: STO) share price is slipping today amid the release of a report on climate change the United Nations secretary-general António Guterres described as “a code red for humanity” and a “death knell for… fossil fuels”.

The report is by the Intergovernmental Panel on Climate Change (IPCC). It found the globe is already 1.1 degrees warmer than it was during industrialisation. Australia has warmed 1.4 degrees in that time.

The Santos share price has spent nearly all of today in the red. It is currently $6.33, 1.48% lower than its previous close.

The drop comes amid calls from the Australasian Centre for Corporate Responsibility​ (ACCR) for ASX investors to demand their investments shift away from fossil fuel expansion.

Let’s take a closer look.

Climate change is already here – IPCC

The Santos share price is firmly in the red today.

Meanwhile, fossil fuel producers and the governments supporting them are being urged to stop after the IPCC found the earth will likely warm to 1.5 degrees higher than pre-industrial times within 10 years.

The IPCC found Australia is already experiencing extreme weather events as a result of climate change.

Australia’s fire season is getting longer and more catastrophic – and will continue to worsen. Declining rainfall is affecting southern Australia, meaning droughts will be more common. Meanwhile, cyclones in Australia’s north will become less common but more disastrous.

Extreme cold snaps will also worsen, as will flood events. Snow cover and depth have already fallen and will continue to do so.  

Additionally, our beaches are already washing away thanks to rising sea levels.

In response to the IPCC’s report, ACCR director of climate and environment Dan Gocher called out Santos for continuing to invest in fossil fuel projects. He said:

It’s time to vote against the re-election of obstructive directors, link remuneration to emissions targets, and end the greenwashing…

None of which would be good for the Santos share price.

Gocher has previously described Santos’ (and Oil Search‘s) ESG measures as “climate vandalism and greenwashing of the highest order”, saying:

Santos is supposed to be targeting net zero emissions by 2040, yet it is now taking on Oil Search’s significant expansion plans through Papua LNG in Papua New Guinea and the Pikka oil field in Alaska.

Santos intends to rely almost exclusively on unproven carbon capture and storage at Moomba to deliver its 2040 net zero target. But Santos has refused to set targets for its Scope 3 emissions which are by far the largest proportion of its carbon footprint.

While the report is likely not affecting the Santos share price right now, the effects of climate change may do so in the not-so-distant future.

What about the federal government?

UN secretary-general António Guterres also stated the Australian government needs to work towards lowering carbon emissions urgently. He commented:

All nations, especially the G20 and other major emitters, need to join the net-zero emissions coalition and reinforce their commitments with credible, concrete and enhanced nationally determined contributions and policies before the [UN Climate Change Conference of the Parties] in Glasgow… Countries should also end all new fossil fuel exploration and production, and shift fossil-fuel subsidies into renewable energy…

COVID-19 recovery spending must be aligned with the goals of the Paris Agreement. 

The federal government’s Gas-Fired Recovery plan is an attempt to financially recover from COVID-19.

However, The Australia Institute found the plan is “plagued by a lack of transparency” and will increase Australia’s emissions. It also found the plan is unlikely to work.

Santos share price snapshot

Today’s poor performance compounds the woes of Santos shares this year.

They’ve now fallen 1.6% year to date. However, the Santos share price is 9.4% higher than it was this time last year.

The post Santos (ASX:STO) share price slides as UN calls “death knell” on fossil fuels appeared first on The Motley Fool Australia.

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More reading

What could the latest climate report mean for ASX 200 shares?

Santos (ASX:STO) share price lower amid fresh revelations
5 things to watch on the ASX 200 on Monday

43% surge: ASX 200 shares that could rake it in this year

5 things to watch on the ASX 200 on Friday

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. 

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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