Unknown

Dataset Information

0

The magnitude of energy transition risk embedded in fossil fuel company valuations.


ABSTRACT: This paper examines ExxonMobil, a widely-followed, mature, large oil and gas producer using discounted cash flow valuation modeling under two scenarios: "Business as usual"; and an adequate climate policy response that would limit warming to 1.5C. The analysis across the last two decades shows the market continues to price in a "business as usual" future. ExxonMobil's overvaluation, relative to an adequate policy response scenario, has increased (pre-pandemic) from 50% to 70% of equity value at risk. Investors are taking significant energy transition risk without meaningful compensation. To avoid continued capital misallocation, negative externalities should be incorporated into underwriting.

SUBMITTER: Riedl D 

PROVIDER: S-EPMC8606343 | biostudies-literature |

REPOSITORIES: biostudies-literature

Similar Datasets

| S-EPMC8020748 | biostudies-literature
| S-EPMC5133642 | biostudies-literature
| S-EPMC9253912 | biostudies-literature
| S-EPMC6088796 | biostudies-literature
| PRJNA994480 | ENA
| S-EPMC5137328 | biostudies-literature
| S-EPMC7801390 | biostudies-literature
| S-EPMC4429979 | biostudies-literature
| S-EPMC9356183 | biostudies-literature
| S-EPMC8018594 | biostudies-literature