Labour Party's largest donor has $million’s invested in Carbon Capture interests

Quadrature the firm that handed £4m to the Labour Party holds $67m in Exxon Mobil shares - the winner of 4 UK Carbon Capture Licences. Its foundation has committed $40m to Carbon Removal Projects.

The PM announcing the UK Gov’s £22bn investment in CCS project. Source: BBC

The UK government go all in on Carbon Capture and Storage.

Earlier this month, the government pledged £22bn for Carbon Capture capture and storage (CCS) projects.

The initial funding for two "carbon capture clusters" on Merseyside and Teesside, over the next 25 years, would create thousands of jobs, provide private investment and could help the UK meet its climate goals - according to the government.

The PM, Sir Keir Starmer, , said the move would "reignite our industrial heartlands" and "kickstart growth”, However the decision to invest huge sums in the new technology, which has not been used on a commercial scale has been met with widespread criticism from environmental NGO’s.

Doug Parr, policy director at Greenpeace UK, told the Guardian:

“For a government that is committed to tackling the climate crisis, £22bn is a lot of money to spend on something that is going to extend the life of planet-heating oil and gas production.

“Carbon capture may be needed for hard-to-abate sectors, such as cement production, however, hydrogen derived from gas is not low-carbon and there is a risk of locking ourselves into second-rate solutions.”

Journalist and Author George Monbiot suggests the huge investment will be a “white elephant: a terrible mistake costing billions”

Labour’s £4m donation from Quadrature Capital.

Last month, the Electoral Commission published details of donations received by all the UK political parties during the second quarter of 2024. The updated register included a number of interesting declarations.

The largest, was a controversial £5m donation to the Conservative Party by Frank Hester’s Phoenix Partnership, however coming in at second place sat a £4m donation made by Quadrature Capital to the Labour Party. The eye-watering sum was accepted by the party in May 2024, during the build up to the general election.

Quadrature Capital are an investment firm based in London, the companies, latest published accounts for 2023 show a healthy turnover of £664m and profits before tax totalling £230m.

Last month Quadrature filed details of all its shareholdings with the United States Securities and Exchange Commission (SEC) - The firm declared 1088 separate investments valued at over $5.9bn.

The investment fund include shareholdings valued at over $300m in fossil fuel companies - including a $67m holding in oil and gas major - Exxon Mobil.

Source: Electoral Commission

Quadrature’s investment in Exxon Mobil

Quadrature’s links to the fossil fuel industry had already been highlighted by the Guardian newspaper last year, who reported the fund held shareholdings valued at $170m in oil and gas firms, however a review of the latest declaration suggest the figure is much higher and exceeds $300m (as of August 2024).

Investments include a $67m shareholding in Exxon Mobil - one of the worlds biggest contributors of greenhouse gas pollution. A $21m shareholding in oil producer Suncor - a firm that is currently extracting oil from Canada’s Tar Sands and was recently hit with a $10m fine in the US for air pollution.

Quadrature’s shareholdings also include a $12m holding in North Sea operator ConocoPhillips as well as multiple investments in the shares of US fracking operators.

According to Exxon Mobil’s website, the firm has in the past held an interest in “around 40 producing oil and gas fields in the North Sea”.

Last year Exxon Mobil were awarded 4 Carbon Capture and Storage (CCS) licences by the UK Government - The licences were located in the North Sea and could become the potential location for the storage of carbon.

Exxon said in it’s September 2023 press release:

“Our Low Carbon Solutions business was awarded four licenses to test for potential locations to store captured CO₂ emissions deep underneath the UK North Sea. We’ll partner with Shell on three of the licenses, and Neptune Energy on the fourth. The licenses were awarded by UK regulator the North Sea Transition Authority (NSTA).”

Furthermore, Exxon said:

“If assessments prove successful, we will apply to the UK government for permission to develop the carbon storage projects.”

When we approached Exxon for comment, a spokesperson said:

“…alongside the other companies we are working with, we are complying with the terms of the storage licenses we were awarded in the first licensing round”.

Quadrature Climate Foundation commits $40m to Carbon Dioxide removal projects.

It’s important to distinguish that Carbon Dioxide Removal (CDR) is not the same as Carbon Capture and Storage (CCS).

CCS is the capture of carbon dioxide (CO₂) from emitters such as heavy industry and natural gas exploration. Carbon dioxide removal (CDR) “is a specific subset of CCS that results in the net-removal of CO₂ from the atmosphere” via reforestation or other technologies such a direct air capture (DAC). Here’s an explainer (link).

DAC technology is championed by big oil and has support from fossil fuel majors such as BP and Exxon, however environmental NGO Food and Water watch have called the tech a “climate scam”

Quadrature’s Climate foundation have committed at least $40m to fund new CDR “technologies and practices”.

According to it’s spokesperson, Quadrature Climate Foundation is “deeply committed” to funding “science-led solutions for climate change” and this includes a pledge to provide financial support for “carbon removal projects”.

Overall the fund has pledged $1b to tackle climate change, the $40m committed to CDR schemes only accounts for a small percentage of its portfolio.

In response to questioning from this newsletter Quadrature said:

“QCF has committed more than US$40 million – less than five percent of our overall portfolio - to supporting Carbon Dioxide Removal (CDR) solutions globally. We do not fund the implementation of carbon removal projects directly. This funding has contributed to the development of innovative technologies and practices aimed at addressing this critical aspect of climate change. This reflects our commitment to scaling up carbon removal technologies in parallel with our main focus on reducing carbon emissions”.

In January 2024, Quadrature also published a report in support of Carbon Capture via CDR. the foundation claimed “the risk of large multinational companies bank-rolling major CDR projects is that it looks like greenwashing. For reasons including this one, public policy and associated funding could be key to the success of this industry”. 

You can Read the report here.

Concerns have also been raised over the links between the UK governments new Climate Envoy and Quadrature Climate Foundation.

Photo by Ben Wicks on Unsplash

Quadrature’s statement on the £4m donation.

In a statement published on its website, Quadrature said:

“In May 2024, we came to the view that a UK Government with a commitment to the green transition of the economy would have the ability to drive change that is so urgently needed. Having analysed commitments set out by each party, we donated £4m to The Labour Party, in support of policies that will deliver climate action while also promoting social equity and economic resilience. This was a values-based donation, not a political donation, as Quadrature Capital Ltd remains non-partisan and apolitical. Going forward, our private giving will continue to be led by our values, and any further donations to political parties will depend on the parties’ commitments, track record and alignment with our mission for sustainable and equitable growth”.

“Given the nature of our trading, we maintain short and long positions in oil and gas stocks at the same time and do not any hold positions for extended periods of time - overall, the only effect of QCL’s trading on the industry is the addition of liquidity. Being market neutral means that across every sector and industry, we maintain as many short positions as long ones”.