How to Compare Climate Risk Across the Biggest Oil Companies

Energy companies could waste a massive $1.6 trillion by ­ignoring climate risk, according to a study by London-based nonprofit Carbon Tracker Initiative. To find out which oil and gas producers are most exposed to these risks, use a new app on the Bloomberg terminal that compares companies across the relevant metrics.

The 2D Scenario Analysis Tool looks at 68 companies in the S&P Global Oil Index through a climate change lens. It starts with a hypothetical: Let’s say the world manages to act to limit the rise in average global temperature to 2 degrees Celsius (hence the 2D). To do that, demand for fossil fuels will need to fall. It then asks: How would that affect the oil companies? The analysis divides each company’s assets into two categories: those that may still be profitable given the drop-off in demand and costs of development—and those that likely won’t.