New Climate Tools for Financial Institutions: - Methane Data Transparency

The International Monetary Fund (IMF), for example, points to methane reduction as a critical lever to “lower the stock of greenhouse gases in the atmosphere and cut the very scary risks of ‘tipping points’ — when climate change becomes self-perpetuating.” The ambition to take meaningful action on methane is rising; 150 countries signed the Global Methane Pledge at COP26 in 2021, committing to red. [...] Systemwide methane releases across the oil and gas value chain, even at relatively low leakage rates, are one of the most harmful — and preventable — emissions drivers today, in some cases on par with the net emissions impact of coal in the short term. [...] The table to the left is sorted by largest global methane emissions and shows US oil and gas sources with some of the highest methane levels detected. [...] The IMF has also called a global methane fee a “promising and practical instrument to lower emissions.” Call to Action for the Financial Community to Invest in Methane Abatement FIs can play a pivotal role to hasten the pace of change in the oil and gas sector, both as providers of investment capital and through their long-term relationships with industry operators. [...] • Set targets and disclose effectively: To meet their own ambitious net-zero pledges, FIs must measure and disclose the climate alignment of their portfolios — or the extent to which the emissions associated with the companies and assets they finance are in line with a 1.5°C trajectory.