Carbon Tracker

Carbon Tracker
Name	Carbon Tracker
Type	Non-profit think tank
Founded	2010
Founders	Mark Campanale
Headquarters	London
Focus	Climate finance, stranded assets

Carbon Tracker Carbon Tracker is an independent financial think tank that analyzes the impact of climate change on capital markets, focusing on stranded assets and the valuation of fossil fuel reserves. It produces data-driven reports aimed at investors, policymakers, and civil society to assess risks associated with coal, oil, and natural gas assets. The organization bridges climate change science, financial markets, and energy sector analysis to influence portfolio decisions and regulatory frameworks.

Overview

Carbon Tracker examines how shifts in energy transition policies, renewable energy deployment, and carbon pricing affect the valuation of fossil fuel companies. Its work connects findings from Intergovernmental Panel on Climate Change reports, scenarios from the International Energy Agency, and disclosures encouraged by the Task Force on Climate-related Financial Disclosures. The think tank is known for pioneering the concept of "stranded assets" within discussions among institutional investors, pension funds, sovereign wealth funds, and asset managers. Carbon Tracker's audiences include United Nations Environment Programme Finance Initiative, regulators like the Financial Stability Board, and market actors such as BlackRock, Vanguard Group, and State Street.

History and development

Founded in 2010 during a period of growing attention to climate finance and following policy developments like the Copenhagen Conference (2009), Carbon Tracker emerged alongside NGOs such as 350.org, Greenpeace, and research bodies like Carbon Disclosure Project. Early work drew on collaborations with academics at institutions including London School of Economics, University College London, and University of Oxford. Over the 2010s the organization expanded its scope to analyze coal retirements tied to campaigns by Sierra Club and investors influenced by initiatives like the Divest-Invest movement. Carbon Tracker contributed to dialogues at forums such as the United Nations Framework Convention on Climate Change conferences and engaged with regulators behind initiatives like the EU Sustainable Finance taxonomy.

Methodology and data sources

Carbon Tracker combines corporate filings—annual reports and reserve statements from companies listed on exchanges like the London Stock Exchange and the New York Stock Exchange—with scenario analysis from bodies such as the International Energy Agency and datasets from the IEA World Energy Outlook and the BP Statistical Review of World Energy. It applies financial modeling techniques used by investment banks and credit rating agencies to stress-test asset valuations under policy pathways consistent with Paris Agreement goals. The organization cross-references operational plant databases such as the Global Coal Plant Tracker and leverages emissions inventories from entities like the European Environment Agency. Peer engagement has included dialogues with researchers at Massachusetts Institute of Technology, Stanford University, and Princeton University to refine climate-economy linkages.

Major reports and findings

Notable publications have highlighted the mismatch between fossil fuel reserves held by companies and the carbon budget compatible with 2 °C target scenarios informed by the SR15. Key reports argued that substantial portions of coal, oil, and gas reserves could become stranded, influencing capital allocation across markets including the FTSE 100, the S&P 500, and emerging market indices. Analyses addressed the financial risks of new projects like Arctic drilling near the Barents Sea and tar sands development in the Athabasca Oil Sands. Carbon Tracker's work on coal plant economics influenced decisions to retire assets in regions such as China, India, and the United States, and shaped investor engagement with companies such as ExxonMobil, Chevron, and BP.

Impact on policy and finance

The think tank's reports informed investor stewardship through forums like the Institutional Investors Group on Climate Change and engaged with regulatory bodies including the Financial Conduct Authority and the European Central Bank on climate-related disclosure and stress testing. Its framing of stranded assets contributed to the growth of divestment campaigns by university endowments, influenced bond market pricing for issuers in the oil and gas sector, and supported litigation strategies pursued by groups such as ClientEarth and public interest lawyers leveraging fiduciary duty arguments in courts like those referenced in Milieudefensie v Royal Dutch Shell-style cases. Carbon Tracker's research has been cited in consultations for the Task Force on Climate-related Financial Disclosures and in reports by the Organisation for Economic Co-operation and Development.

Criticism and controversies

Critics from industry groups like trade associations representing International Association of Oil & Gas Producers and some investment banks have challenged Carbon Tracker's assumptions on technology costs, demand projections, and the pace of policy implementation. Academic commentators at institutions including Harvard University and Columbia University have debated scenario selection and sensitivity to variables such as carbon capture and storage deployment and negative emissions technologies. Some policymakers in fossil fuel-producing regions such as Norway, Russia, and Saudi Arabia questioned headline conclusions about stranded assets, arguing for alternative pathways in reports produced by entities like the International Energy Forum. Debates continue over the appropriate use of scenario analysis in regulatory stress tests conducted by central banks such as the Bank of England and the Federal Reserve.

Category:Environmental organizations