wealth tax

Billionaire investments in polluting industries such as fossil fuels and cement double the average for the Standard and Poor group of 500 companies – Oxfam   

The investments of just 125 billionaires emit 393 million tonnes of CO2e each year – the equivalent of France – at an individual annual average that is a million times higher than someone in the bottom 90 percent of humanity. 

Carbon Billionaires: The investment emissions of World’s richest people, is a report published by Oxfam today based on a detailed analysis of the investments of 125 of the richest billionaires in some of the world’s biggest corporates and the carbon emissions of these investments. These billionaires have a collective US$2.4 trillion stake in 183 companies.  

The report finds that these billionaires’ investments give an annual average of 3m tonnes of CO2e per person, which is a million times higher than 2.76 tonnes of CO2e which is the average for those living in the bottom 90 percent.  

The actual figure is likely to be higher still, as published carbon emissions by corporates have been shown to systematically underestimate the true level of carbon impact, and billionaires and corporates who do not publicly reveal their emissions, so could not be included in the research, are likely to be those with a high climate impact.  

“These few billionaires together have ‘investment emissions’ that equal the carbon footprints of entire countries like France, Egypt or Argentina,” said 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 policy making. 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,” said Dabi.  

“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,” said Dabi.  

Contrary to average people, studies show the world’s wealthiest individuals’ investments account for up to 70 percent of their emissions. Oxfam has used public data to calculate the “investment emissions” of billionaires with over 10 percent stakes in a corporation, by allocating them a share of the reported emissions of the corporates in which they are invested in proportion to their stake.  

The study also found billionaires had an average of 14 percent of their investments in polluting industries such as energy and materials like cement. This is twice the average for investments in the Standard and Poor 500. Only one billionaire in the sample had investments in a renewable energy company.   

“We need COP27 to expose and change the role that big corporates and their rich investors are playing in profiting from the pollution that is driving the global climate crisis,” said Dabi. “They can’t be allowed to hide or greenwash. We need governments to tackle this urgently by publishing emission figures for the richest people, regulating investors and corporates to slash carbon emissions and taxing wealth and polluting investments.” 

The choice of investments billionaires make is shaping the future of our economy, for example, by backing high carbon infrastructure – locking in high emissions for decades to come. The study found that if the billionaires in the sample moved their investments to a fund with stronger environmental and social standards, it could reduce the intensity of their emissions by up to four times. 

“The super-rich need to be taxed and regulated away from polluting investments that are destroying the planet. Governments must put also in place ambitious regulations and policies that compel corporations to be more accountable and transparent in reporting and radically reducing their emissions,” said Dabi. 

Oxfam has estimated that a wealth tax on the world’s super-rich could raise US$1.4 trillion a year, vital resources that could help developing countries – those worst hit by the climate crisis – to adapt, address loss and damage and carry out a just transition to renewable energy. According to the UNEP adaptation costs for developing countries could rise to US$300 billion per year by 2030. Africa alone will require US$600 billion between 2020 to 2030. Oxfam is also calling for steeply higher tax rates for investments in polluting industries to deter such investments.  

The report says that many corporations are off track in setting their climate transition plans, including hiding behind unrealistic and unreliable decarbonisation plans with the promise of attaining net zero targets only by 2050. Fewer than one in three of the 183 corporates reviewed by Oxfam are working with the Science Based Targets Initiative. Only 16 percent have set net zero targets.  

Ahead of the deliberations at COP27, Oxfam is calling for the following actions: 

• Governments to put in place regulations and policies that compel corporations to track and report on scope 1, scope 2 and scope 3 GHG emissions, set science-based climate targets with a clear road map to reducing emissions, and while at it ensuring a just transition from the extractive, carbon intensive economy by securing the future livelihoods of workers and the affected communities. 
• Governments should implement a wealth tax on the richest people and an additional steep rate top-up on wealth invested in polluting industries. This will reduce the numbers and power of rich people in our society, drastically reduce their emissions. It will also raise billions that can be used to help countries cope with the brutal impacts of climate breakdown and the loss and damage they incur and fund the global shift to renewable energy. 
• Corporations must put in place ambitious and time-bound climate change action plans with short-to-medium term targets in line with global climate change objectives in a view to reach carbon neutrality by 2050.  

“To meet the global target of keeping warming below 1.5 degrees Celsius, humanity must significantly reduce carbon emissions, which will necessitate radical changes in how investors and corporations conduct business and public policy,” said Dabi. 

Notes: 

Download Oxfam’s report “Carbon Billionaires”. 

Oxfam began with a list of the 220 richest people in the world according to the Bloomberg Billionaires Index and worked with data provider Exerica to identify a) the percentage ownership these billionaires held in corporations b) the scope 1&2 emissions of these corporations. To calculate the investment portfolios of individual billionaires, we used the analysis by Bloomberg, who provide detailed breakdowns of the sources of billionaire wealth. Here is the methodology note.  

The estimate on the money that could be raise on wealth tax on millionaires, multi-millionaires and billionaires, is through using data from Wealth X and Forbes. 

Recent data from Oxfam’s research with the Stockholm Environment Institute shows that the wealthiest 1 percent of humanity are responsible for twice as many emissions as the poorest 50 percent and that by 2030, their carbon footprints are set to be 30 times greater than the level compatible with the 1.5°C goal of the Paris Agreement. 

The GHS protocol greenhouse accounting standards widely used globally spells out the three categories of gas emissions associated with companies as follows: Scope 1 are direct emissions from the company’s operations. Scope 2 are indirect, where the emissions take place elsewhere. Scope 3 are all other indirect emissions, this includes everything from emissions in the company’s supply chains to employee commuting, to the use of the products they sell by consumers.