A spotlight has been cast on the world’s wealthiest at the 27th United Nations Climate Change conference (COP27) in Sharm el-Sheikh, Egypt, where there have been renewed calls for their investments to be regulated.
A wealth tax on the world’s super-rich could raise as much as US$1.4 trillion a year, an amount that could be deployed towards supporting countries worst hit by the climate crisis, enabling them to adapt, address losses and damages, and transition to renewable energy.
According to a new report published by Oxfam, the investments of just 125 billionaires have resulted in the combined emission of 393 million tonnes of carbon dioxide equivalent each year, an amount that matches the annual emissions of France.
Their investments are estimated to be producing 3 million tonnes of CO2e per person each year, which is a million times higher than 2.76 tonnes of CO2e generated on average by those living in the bottom 90%, says the report, titled Carbon Billionaires.
The actual figure is likely to be higher, Oxfam notes, as published carbon emissions by corporates have been shown to systematically underestimate the true level of their carbon impact, aside from the fact that those who do not publicly reveal their emission levels are likely to be generating more CO2e.
Public data were used to calculate the "investment emissions" of billionaires with over a 10% stake in a corporation, allocating them a share of the reported emissions of the corporates in which they are invested in proportion to their stake.
The study also finds that an average of 14% percent of their investments are in polluting industries such as energy from fossil fuel and materials like cement. This is twice the average for investments in the S&P 500. Only one billionaire in the sample had investments in a renewable energy company.
“These few billionaires together have ‘investment emissions’ that equal the carbon footprints of entire countries like France, Egypt or Argentina,” says Nafkote Dabi, climate change lead at Oxfam. “The major and growing responsibility of wealthy people for overall emissions is rarely discussed or considered in climate policymaking. This has to change. These billionaire investors at the top of the corporate pyramid have huge responsibility for driving climate breakdown. They have escaped accountability for too long.
“Emissions from billionaire lifestyles, their private jets and yachts are thousands of times the average person, which is already completely unacceptable. But if we look at emissions from their investments, then their carbon emissions are over a million times higher,” Dabi adds.
The choice of investments billionaires make is shaping the future of the economy, by backing high-carbon infrastructure and therefore locking in high emissions for decades to come.
If these billionaires move their investments to a fund with stronger environmental and social standards, they could reduce the intensity of their emissions by up to four times, according to the study.
“The super-rich need to be taxed and regulated away from polluting investments that are destroying the planet,” Dabi says. “Governments must also put in place ambitious regulations and policies that compel corporations to be more accountable and transparent in reporting and radically reducing their emissions.”