Around 26% of the top 50 investors, a total of 13 investors, in companies driving the Papua LNG project have responded to a recent joint letter by civil society organisations (CSOs) calling investor attention to the project (1). The letter outlined serious concerns about the project and was directed to investors in TotalEnergies, ExxonMobil, Santos and ENEOS. Most responses included that they would follow their own stewardship policies and the information provided would be taken into consideration. At least one has suggested that they’re likely to engage more actively on the issue (investors who did not respond are listed below). After several delays, the project is seeking a Final Investment Decision in 2025. 

The Papua LNG project faces three critical issues, including misalignment with the 1.5-degree goal of the Paris Agreement, a lack of Free, Prior and Informed Consent from affected Indigenous Peoples and profound biodiversity risks, with over 60 species in the project area never studied by external science. Due to such a situation, thirteen banks including Australia and New Zealand Banking Group, BNP Paribas and Crédit Agricole have committed not to provide loans for the Papua LNG project. In 2024, a Fair Finance Japan report also outlined that the project did not comply with a host of industry standards, including the Equator Principles, the OECD Guidelines or UN Guiding Principles on Business and Human Rights.

Furthermore, although the four project owners state that they aim to achieve net zero by 2050, they are developing new fossil fuel projects (2-5), while the International Energy Agency (IEA), in its 2023 report, titled "Net Zero Roadmap: A Global Pathway to Keep the 1.5 °C Goal in Reach", reiterated the conclusion from its 2021 report that in order to achieve net-zero greenhouse gas emissions by 2050 and maintain 50% chance of limiting warming to 1.5 degrees, no new coal, oil or natural gas projects are needed. Some new fossil fuel projects being developed by the four companies, such as the Barossa gas project and the Mozambique LNG project, also have issues related to the Indigenous Peoples’ rights and serious impacts on the environment, similar to the Papua LNG project. Perceivably, failing to act on these risks may lead the project, and any potential financiers, to face heightened risks of future legal cases or non-judicial grievances.

If executives at the four companies continue to pursue LNG expansion, investors should exercise their influences to replace their leadership in order to demonstrate their commitment to respecting the 1.5-degree goal, Indigenous Peoples’ rights and biodiversity.

Yuki Tanabe, Program Director for Japan Center for a Sustainable Environment and Society (JACSES), says: "While investors stating that they will consider this information in their stewardship policies may not sound dramatic - we consider that almost 26% investors responded to us directly as a sign that investors are looking more into Papua LNG. Many investors are increasingly aware that the climate and biodiversity crises present a systemic risk to their portfolios. Papua LNG faces particularly concerning climate, biodiversity, human rights and even financial risks, yet we see little to suggest that companies are adequately educating investors about those risks.”

Peter Bosip, Executive Director, Centre for Environmental Law and Community Rights Inc in PNG, says: "Papua New Guinea is a country that has variety of renewable energy sources that corporations like TotalEnergies, Exxon Mobil, Santos and ENEOS can invest in, if they are genuine to provide sustainable energy, and in meeting their environment and climate goal by diverting from extracting liquified natural gas; whereas Papua LNG is the most social, environmental and climatically disastrous for the communities in Papua New Guinea." 

Shona Hawkes, Director, Land and Environmental Justice, Jubilee Australia Research Centre, says: "Papua LNG is proposed to take place in one of the most climate-impacted countries on earth, including running a pipeline through communities already displaced by climate disasters. Simultaneously, we are seeing rising social movements in Asia - the project’s target market - pushing back against a flood of proposed gas projects, and calling for cheaper and cleaner renewable energy. This includes some voices already speaking out on Papua LNG. There are reports of the project trying to curb a potential major cost-blow out and proponents appear to brush past the fact that the gas would hit the market in the middle of a global gas glut. Papua LNG is clearly bad for the climate, people and nature, and there are compelling reasons why it’s bad for investors too.”

Lidy Nacpil, Coordinator, Senior Program Manager for Transformation of Energy Systems, Asian People’s Movement on Debt and Development, says: “Papua LNG project represents everything wrong with the priorities of TotalEnergies, Exxon Mobil, Santos and ENEOS: pursuit of profitability over saving our climate, over preserving biodiversity, over respecting local cultures. While Asia has to contend with the ever worsening effects of climate change, these corporations are pushing for further expansion of gas.  Asian communities vehemently reject any more gas and other fossil fuels!”

Notes

1：jacses.org/en/556/

2：totalenergies.com/company/ambition 

3：corporate.exxonmobil.com/-/media/global/files/advancing-climate-solutions/2024/2024-advancing-climate-solutions-report.pdf 

4：santos.com/sustainability/climate-overview/ 

5：ssl4.eir-parts.net/doc/5020/ir_material_for_fiscal_ym3/164364/00.pdf

The list of the investors who did not respond:
1. Amundi/Crédit Agricole
2. Argo Investments
3. Asset Management One Co., Ltd.
4. Bank of America Corp
5. Bank of New York Mellon Corp
6. Blackrock Inc
7. California Public Employees' Retirement System
8. Capital Group Cos Inc
9. Charles Schwab Corp
10. Commonwealth Superannuation Corporation
11. Dodge & Cox
12. Eurizon Capital S.A.
13. Firetrail Investments Pty Ltd
14. Florida State Board of Administration
15. FMR LLC
16. Franklin Resources Inc
17. Geode Capital Management LLC
18. GQG Partners LLC
19. HUB24 Ltd.
20. Invesco Ltd
21. JPMorgan Chase & Co
22. Kochi Shinkin Bank
23. Legal & General Group PLC
24. Marsh & McLennan Cos Inc
25. Massachusetts Financial Services Co
26. Mellon Investments Corporation
27. Morgan Stanley
28. Nomura Asset Management Co., Ltd.
29. Northern Trust Corp
30. State Farm Mutual Automobile Insurance
31. Sumitomo Mitsui DS Asset Management Company, Limited
32. T Rowe Price Group Inc
33. TD Asset Management Inc.
34. Tokio Marine Holdings Asset management
35. UBS AG
36. Wellington Management Group LLP

*One investor whom we sent the letter no longer invests in the four Papua LNG project owners. Thus, we do not include their reply into the number of the responses, which only count the content related to their engagements and policies.