Why divest from Eni? It's intensive, government-supported expansion of a dirty and old business model
On the same day as President Donald Trump announced the USA’s withdrawal from the Paris Climate Agreement framework, three European heads of government issued a statement heavily criticising Trump and expressing their support for the Agreement: Angela Merkel, Emmanuel Macron – and Paolo Gentiloni. Of course, while it was right to criticise Trump for his action, there is a degree of hypocrisy in the fact that these three personalities made a show of being leaders in climate change – among them, Italy’s Prime Minister. The Italian state owns about a third of one of the biggest CO2 polluters in the world, the fourth largest European fossil-fuel company in terms of oil and gas reserves, and Italy’s largest company: Eni.
So, while being very critical of Trump for his climate policies, at the same time the Italian government is responsible for one of the world’s largest fossil-fuel companies – and seems to have neglected to use its influence to navigate the company towards a low-carbon future. Quite the opposite, in fact. Due to the persistently low oil price for around two years, many fossil-fuel companies have cut their oil exploration to a minimum. But not Eni: while in the period from 2008 to 2015, on average, European fossil-fuel companies discovered reserves of 0.3 times their own production, Eni found 2.4 times as much!
In fact, this state-owned company is rapidly expanding a business model that is not only ruining our climate, but will eventually ruin that of its investors, too, as the unimpeded burning and selling of oil will cease as soon as the Paris Agreement has been fully implemented. Their business figures are already quite poor: in 2016, the company ended with a net loss of 1.46 billion euros, while in 2015 it actually lost 8.77 billion euros. And the company’s share price fell from around 20 euros in 2014 to 15 euros today – a 25% drop in just three years. It is hard to understand why investors still give Eni their capital. And this includes the Italian state: if the carbon bubble continues to shrink, it is the Italian taxpayers who will have to compensate for the losses in the state’s company shares.
Thus, it seems that giving Eni capital is not only wrong from a financial point of view, but from a moral one, too. Here are just a few examples of Eni’s expanding exploration activities: just recently, on 21 June 2017, news spread of an agreement signed with Iran’s national oil company that will see it look into the possibility of developing gas and oil fields in the south of the country; at the beginning of April 2017, the company signed exploration contracts with the Cyprus government to drill for fossil fuels off the island’s south coast; in March 2016, it opened a massive oil platform in the Barents Sea off Norway; and in September 2015, Eni won the tender for exploration off the coast of Mexico.
This is why we, as European Greens, are part of the divestment movement that is calling on investors and institutions not to invest their money in fossil-fuel companies like Eni. By so doing, we are sending a strong signal that society does not support a business model that will ruin our future. In fact, the divestment movement has been very successful: to date, over 700 large-scale institutions worth around US$ 5.5 trillion have divested from fossil fuels. And the movement is growing! This is the ideal way to campaign concretely against those that are mainly responsible for catastrophic climate change.
Therefore, if you want to join us in sending a strong signal that Eni’s business model is not sustainable – morally or financially – then check your own company portfolio to establish whether you own stocks in this company, either directly or indirectly. And even more important, target an institution that invests or might invest money in Eni and convince them to divest from it. The best way to do this is to watch our explanatory video to learn about the need for divestment, and our call to action video to see how you can get involved. There is more information in our brochure ‘The Good, the Bad and the Ugly’, including information on Europe’s big polluters and how to divest from them. We are counting on you!