Saudi Aramco’s ambitious IPO plan that is expected to bring a windfall to Wall Street markets could be disastrous for the planet say environmentalists. They sent a letter to large investment banks like JP Morgan Chase, Goldman Sachs and other that the IPO which will raise billions of dollars from investors will be used to worsen the current climate crisis. These activist groups comprising of Sierra Club, Rainforest Action Network, Friends of the Earth etc. stated that this long delayed IPO is being watched by people around the world and financing of fossil fuels by bank will earn them more public ire.
The letter was sent this week just few hours before news emerged that Aramco has delayed the IPO to allow investors to study the impact on its oil facilities after the drone attack during September. The environmentalists cited the sad state of human rights in Saudi Arabia that killed columnist Jamal Khashoggi in Turkey. But Wall Street bigwigs are not likely to heed to these warnings as Aramco IPO is expected to raise $40 billion, which will bring in enormous fees and bragging rights for investment banks. But some investors are taking heed to environmentalists’ calls as Singapore based Temasek Holdings has withdrawn itself from investing in Aramco’s IPO.
After the attack last September there is skepticism among analysts and investors about the high valuation. The letter was sent to CEO’s of top seven banks that are coordinating the IPO, are Morgan Stanley, Bank of America, Goldman Sachs, JP Morgan, Citigroup, Credit Suisse and HSBC. Following the objections raised by environmentalists Aramco stated that during the past decades they have made heavy investments to reduce emissions during operations. The inordinate delay in launching the IPO still remains a question as it is part of the nation’s Vision 2030 plan to diversify economy from overdependence on oil.