Environmental advocates have called on banks backing Saudi Aramco's initial public offering (IPO) to stay true to their pledges on climate change. The campaigning groups said banks that support the IPO are betraying the environment.
Newsweek reported that the campaigning groups tapped banks to reconsider their stance on their support of Aramco, the world's most profitable company. Among the organizations that expressed dismay over the IPO was international anti-corruption firm, Global Witness.
Senior campaigner at Global Witness, Adam McGibbon, argued that injecting a massive amount of capital into "the world's biggest polluter" at a critical time in environmental studies is a matter of serious discussion.
McGibbon explained that he believes Saudi Aramco wants to burn up all of its gas and oil reserves. If this happens, McGibbon said the process will result in 112 gigatons of carbon dioxide and it will be a "disastrous" occurrence for the environment.
Other environment advocacy groups such as Sierra Club and Friends of the Earth have joined Global Witness in submitting letters to the banks involved in the IPO.
It is worth noting that the banks involved have previously expressed a willingness to help resolve the world's climate change issues. The banks are as follows: Morgan Stanley, HSBC, JPMorgan Chase, Credit Suisse, Bank of America, Goldman Sachs, and Citigroup.
Senior program adviser for Greenpeace U.K., Charlie Kronic, echoed the sentiments of the advocating groups. He said global banks seeking to be part of the Saudi Aramco IPO should question the details on the oil giant's decision to list in home turf instead of in an international market.
Kronick pointed out that while a listing outside the kingdom will be more transparent, a local listing could be an indication that Aramco is rushing to "cash out oil assets before the market turns against oil."
Finally, Kronick called on Saudi to "transform" so it can contribute to the global target of achieving a net zero world within five decades. He added that Saudi should see the IPO as an opportunity to transition towards a renewable energy system.
Meanwhile, Reuters noted that Saudi Aramco's IPO plans remain unclear despite the oil behemoth's announcement about the upcoming listing. Potential investors remained mum on details about how much of the company's stakes will be up for trading.
Furthermore, it is unclear how much the oil giant will be valued. Crown Prince Mohammed bin Salman previously said he is targeting a $2 trillion valuation, but some global market experts said the final figure will sit between $1.2 trillion and $1.5 trillion.
Saudi Aramco is a state-run oil company and it is planning to sell two percent of its stakes on December 11.
