Saudi Aramco IPO: the ultimate marriage between carbon and capitalism

Roll up! Roll up! The world’s biggest climate polluter, Saudi Aramco is poised to announce the world’s biggest stock flotation in an ultimate marriage of carbon and capital. Any institution with tens of millions of dollars and few qualms about the environment is invited.

Entry is not as exclusive as it sounds. Individuals with a lot less cash and a lot more concern may also inadvertently find themselves as guests through pension funds that automatically track the stock markets.

Scientists warn that fossil fuels and money will soon need to divorce because carbon emissions must be slashed by half over the next decade if the world is to have any chance of keeping global heating to a relatively safe level of 1.5C. Despite this, Aramco expects to receive the greatest infusion of cash in history.

In the modern era, no company has a bigger carbon footprint than Saudi Aramco. The Guardian’s recent Polluters investigation found the oil and gas producer has contributed 59bn tonnes of CO2 since 1965, a third more than any of its rivals. Output is forecast to expand even further between now and 2030 to a level that would mean this single firm will account for almost 5% of the remaining 1.5C carbon budget.

Until now, the company has been state-owned, influenced by the Saudi royal family, and has disrupted, delayed and diluted international efforts to cut carbon emissions. The flotation will not change this dramatically.

The bigger questions are who is going to buy the shares, how will the money be used and will a public listing make the company more transparent and less of an obstacle to climate action. So far, the indications are less than reassuring.

The most likely buyers are sovereign wealth funds and state-backed