London Stock Exchange reclassifies oil and gas firms in clean investment drive

The London Stock Exchange’s index provider FTSE Russell has reclassified oil and gas companies listed on the market under a ‘non-renewable energy’ category, in a move that aims to differentiate between heavily polluting firms and cleaner producers.

Oil and gas groups including BP, Royal Dutch Shell, Cairn Energy, Petrofac, Premier Oil and Tullow Oil will be affected by the rebranding, along with coal mining firms that were previously categorised under basic materials/mining.

Meanwhile, green energy producers have also been re-categorised under ‘renewable energy’ in the same stroke. Previously, these companies were grouped together under the phrase ‘alternative energy’.

Danish wind turbine manufacturer Vestas Wind Systems and Spanish offshore wind giant Siemens Gamesa Renewable Energy are set to benefit from the new classification, according to Susan Quintin, managing director of product management at FTSE Russell.

The changes to the industry classification benchmark will provide “greater visibility to other forms of energy such as renewables,” said Quntin.

However, leading trade association Oil & Gas UK pointed to the process of energy diversification undertaken by several oil and gas companies in recent years.

“We would hope that any change which seeks to help the advance to a low carbon future does not have unintended consequences which might in fact slow down the pace of change, having the opposite effect of what it’s set out to do,” said the group’s upstream policy director Mike Tholen.