Much has changed in the past ten months. The recognition by the nations participating in the UN climate summit in Paris, COP21 (News, 11 December 2015), of the need to keep the world’s temperature rise to under 1.5°C has revealed an urgency that has often been lacking until now: it has changed the game with regard to even the medium-term viability of oil and gas multinationals.

To keep below a 1.5°C rise, about 85 per cent of all fossil-fuel reserves must remain in the ground. The 2.0°C target required about 80 per cent of all fossil fuels (88 per cent of coal reserves, 35 per cent of oil and 52 per cent of gas) to remain unburned.

Not surprisingly, investors and market analysts speak of ‘a carbon bubble’ and ‘stranded assets’ with regard to fossil-fuel companies. For any corporation 80 per cent (or 35 per cent or 52 per cent) of whose assets are untouchable must be deemed a risky investment. Now, with the world committed to less than a 1.5°C rise, even more of those assets are in danger of being stranded, and the bubble has grown larger.

In addition, the number and severity of extreme weather events have increased. The excessive rain and floods in the north of England and Scotland in January this year are the fourth such ‘once-in-a-lifetime’ or ‘once-in-a-century’ weather events in the UK since 2000 (News, 1 January). Similar patterns of extreme floods, and/or droughts, and subsequent wild fires, have occurred in North America, Australia and North Africa. The past year, 2015, was unambiguously the hottest globally on record, with 2005, 2010 and 2014 tied for the next hottest year.

We should also consider the implications of the current migration crisis in Europe. The 2006-09 drought in Syria was one of the stress factors that led to its continuing civil war, which in turn has contributed significantly to the unprecedented number of immigrants seeking entrance into Europe. It is increasingly clear that it is not just poor nations that will be affected by climate change. We are already beginning to experience the consequences in Europe.

Nonetheless, the oil and gas companies continue to conduct their business as if nothing had changed. BP’s recent report Energy Outlook 2016 Edition: Outlook to 2035 tacitly acknowledges the need for change, but puts the onus on governments. Moreover, the report predicts that the demand for oil and gas will increase in the coming decades. In view of the decisions made at the Paris climate summit, this must be deemed environmentally and financially irresponsible.

In the light of the Paris summit, the worsening effects of climate change and the business-as-usual attitude of the industry, a small working group of those responsible for the Oxford and Birmingham diocesan disinvestment motions met to discuss what ‘robust engagement’ should look like in the current context. This is a summary of our discussion.

Last year, the EIAG’s initiative, Aiming for A, succeeded in getting resolutions calling for enhanced disclosure of carbon emissions passed, with large majorities, by shareholders’ meetings of both BP and Shell. Exxon refused – and is still refusing – to consider such a resolution.

Thus, with the EIAG’s encouragement, Shell and BP (but not Exxon) have promised to disclose just how much carbon their operations emit. It is now essential that these companies, as well as others, progress to actual reductions in carbon emissions – and not just more promises of further disclosure – or EIAG’s much heralded Aiming for A will be deemed a failure.

Oil and gas multinationals must also radically reduce exploration. Since, as noted above, approximately 85 per cent of known fossil-fuel reserves must remain in the ground if we are to have any chance of remaining below a 1.5°C rise, it is senseless for multinationals to continue to outlay more than $300 billion annually, which they spent in the past two years for which records are available (2012 and 2013), in the search for more oil and gas reserves.

Any future exploration in sensitive areas, such as the Arctic and certain coastal regions, must be avoided altogether. Furthermore, it follows just how spurious is the claim – which was made, for example, at the General Synod meeting in July – that companies need to continue some limited exploration because many of their reserves are situated in difficult locations where extraction is expensive.

Even if this were accepted, it is obvious that the $300 billion spent annually would still be excessive. Oil and gas companies have been exploring for the best locations for more than 100 years. The primary reason that they have been forced to search in less advantageous locations, such as deep sea and the Arctic, is because the unproblematic locations have already been exploited.

Since the vast majority of fossil-fuel reserves are unburnable if the world is to avoid a 1.5°C rise, more radical and imaginative ways of thinking must be considered by the oil and gas multinationals. To an objective observer, their long-term future in their current form must be regarded as extremely questionable.

Therefore, if they are to be ethically responsible towards their shareholders, they need to move to a ‘harvest mode’ of operation, bringing exploration to an end, and progressively reducing oil and gas production. This could either result in increased dividends, as the capital value of the company is returned to shareholders over time, or it could be coupled with diversification into renewables, more efficient battery storage and carbon capture and storage (CCS), where oil and gas companies already have almost all the necessary expertise.

The companies should consider converting their petrol stations to the re-fuelling of electric or hydrogen vehicles. The flirtation with renewables by a few oil and gas multinationals a decade or so ago and their current pitiful level of investment in CCS appear to be no more than exercises in public relations. ‘Robust engagement’ would seek to convince the oil and gas companies that the transformation of such image management into their core business models is their only hope of survival.

It is also essential that these companies begin the process of moving jobs from oil and gas production to renewables and CCS. Oil and gas multinationals could potentially be a powerful voice with governments. Instead of spending significant resources lobbying governments to protect their subsidies and their current rates of emissions, they should concentrate their lobbying efforts on influencing governments to seize this moment of change, and support renewables, CCS and electric or hydrogen vehicles.

Finally, ‘robust engagement’ must recognise the huge influence that these multinationals have with other players, especially state-owned oil and gas companies. State-controlled companies – such as Saudi Aramco, Gazprom (Russia), the China National Petroleum Corporation, National Iranian Oil Company, Petróleos de Venezuela, Petrobras (Brazil) and Petronas (Malaysia) – own most of the world’s reserves of coal, oil and gas, while those companies listed on the world’s stock exchanges, such as BP, Shell and Exxon, among others, possess a much smaller market share.

Nonetheless, the division between the two types of companies is not as great as it seems. Many of the largest state-owned companies float some of their stock, recruit non-executive directors from the publicly traded companies and contract these companies to help extract their reserves.

The immense influence that the listed companies have means that where they lead, state-owned oil and gas companies inevitably follow. Thus the multinationals need to be encouraged to take their leadership seriously, and to cease using their smaller share of the market as an excuse to avoid necessary change.

At a recent meeting in the Guildhall, attended by more than 2000 investment managers and asset-owners, it was suggested that companies such as BP, Shell and Exxon could soon go the way of Kodak, Blockbuster and Olivetti typewriters. This seems an incredible statement, until one remembers just how quick was the demise of these three commercial monoliths. If Shell and BP were to follow the example of Kodak and Blockbuster, the impact on the pensions of millions of ordinary individuals would be disastrous.

‘Robust engagement’ that is worthy of the name should include challenging oil and gas multinationals to make real reductions in carbon emissions now; to end nearly all exploration; to move to a harvest mode for the oil and gas parts of their business; to diversify into CCS, renewables and the servicing of electric and hydrogen vehicles without delay; to begin moving jobs towards renewables and CCS; to lobby governments to invest in renewables and CCS; and to show real leadership in the industry, especially towards those in the state sector.

All this is necessary, most importantly, because of what the enormous threat of climate change means to God’s world and his children, but also because of the danger that the national investment bodies of the Church of England will lose many millions when the ‘carbon bubble’ bursts.

The Revd Dr Darrell D. Hannah is Rector of All Saints’, Ascot Heath, in Berkshire, and a board member of Operation Noah. This article incorporates contributions from the Revd Hugh Lee, Marilyn Hull and the Revd John Nightingale.