Saudi oil giant Aramco unveils $1.5 billion sustainability fund

Saudi oil and gas company Aramco on Wednesday unveiled a $1.5 billion fund for sustainable investments, as part of efforts to bolster the state-owned company’s green credentials in an announcement ahead of the UN

Saudi oil and gas company Aramco unveiled a $1.5 billion fund for sustainable investments on Wednesday, as part of efforts to bolster the public company’s green credentials in an announcement ahead of next month’s UN climate conference in Egypt .

Aramco CEO Amin Nasser told an investment conference in Saudi Arabia that the fund will focus on “breakthrough technologies that matter and startups that will help us fight against climate change.”

Nasser touted the fund as one of the largest sustainability-focused venture capital funds in the world and said it would invest globally and launch immediately. He spoke at Saudi Arabia’s Future Investment Initiative meeting, sometimes known as “Davos in the Desert”, a comparison to the World Economic Forum’s annual meeting of corporate bigwigs and world leaders in the Swiss Alps.

Aramco is one of the biggest emitters of greenhouse gases. Environmentalists have long accused oil and gas companies of using climate-friendly promises to “green” their polluting operations.

One area Aramco’s fund will focus on is carbon capture and storage, which involves sucking heat-trapping carbon dioxide from factory chimneys and storing it underground.

Climate experts, however, warn the technology is risky, unproven and expensive and could be used to delay the phase-out of fossil fuels. Others say any untested solutions should be pursued given the short time left to meet UN emissions reduction targets.

Other investment themes targeted by the fund include greenhouse gas emissions, energy efficiency, nature-based climate solutions, digital sustainability, hydrogen, ammonia and synthetic fuels.

Aramco has committed to zero net operational emissions by 2050, but that’s only a fraction of the company’s total emissions. It does not include the carbon dioxide emitted by burning the fossil fuels the company produces.

Oil companies have used ‘green-sounding’ ‘net zero by 2050’ promises to justify technology fixes that will allow them to ‘keep digging and selling oil and gas,’ says researcher Pascoe Sabido. specializing in the energy and climate sector at the Corporate Europe Observatory, which investigates corporate lobbying in the European Union.

“Aramco’s sustainability fund has nothing to do with fighting climate change and everything to do with extending the life of its fossil fuel business,” he said.

Saudi Crown Prince Mohammed bin Salman has tried to diversify the economy away from oil revenues, although the government continues to rely heavily on crude exports.

The United Nations climate conference, known as COP27, will hold negotiations aimed at limiting the rise in global temperature next month in the Red Sea resort of Sharm el-Sheikh, Egypt.

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The Associated Press

Carol N. Valencia