Why Fossil-Fuel Infrastructure Has No Place in Sustainability
Climate science rules out new coal, oil or gas. All 1.5 °C pathways disallow major new fossil projects. Indeed, the IPCC warns that existing coal, oil and gas infrastructure must be largely retired to meet climate goals: coal use should fall to zero and oil/gas cut by 60–70 % by 2050.
Stranded-asset risk. Analysts estimate $1–4 trillion of coal, oil and gas reserves and plants will become “stranded” by 2050 under a 2 °C limit (even more if targeting 1.5 °C). Companies funding new fossil infrastructure bet on a policy and market failure.
EU Taxonomy misalignment. The EU Taxonomy is explicitly a classification system for net-zero‑aligned activities; it does not greenlight new coal projects, and even gas power may qualify only under very strict transition criteria (e.g. replacing coal plants, using carbon capture). WWF and others note that branding new gas plants as “green” would blatantly contradict Paris-aligned scenarios (IEA’s Net Zero path bans new gas beyond 2021, and requires shutdown of gas plants by mid-2030s).
Greenwashing is rampant. Recent investigations found that over 40 % of funds labelled “sustainable” still hold coal, oil or gas companies; one study found 70 % of sampled “sustainable” passive funds finance fossil-fuel expansion. Allowing any fossil infrastructure developer into a “sustainable” list invites misleading claims and erodes trust.
SWISOX’s strict exclusion. In our Green Light List methodology, companies first must pass EU Taxonomy revenue-alignment and standard exclusions. Crucially, if a company’s ISIN appears on Urgewald’s Global Coal or Global Oil & Gas Exit Lists (GCEL/GOGEL) – which cover the entire thermal coal chain and 95 % of global oil/gas production – it is barred from the Green category, no matter what other scores it has.
A clear classification, not a marketing label. By explicitly excluding all fossil fuel infrastructure developers, SWISOX’s Green Light List offers a science-based, transparent classification (much like the EU taxonomy itself) rather than a vague “green” marketing label.
The Climate Imperative and Stranded-Asset Risk
The vast open-cast coal pit above is emblematic: burning more coal, oil or gas locks in emissions incompatible with 1.5 °C pathways. Scientific reviews confirm that no credible 1.5 °C scenario allows further expansion of fossil fuel projects. As CarbonBrief reports, a comprehensive review found “a large consensus” that developing new oil and gas fields is “incompatible” with the 1.5 °C target. In fact, the International Energy Agency has stated bluntly that there should be “no new oil and gas fields approved for development” if we are to stay on a 1.5 °C trajectory.
Even existing fossil infrastructure is too much for 1.5 °C. The IPCC notes that letting all current coal, oil and gas assets run their full lives would make 1.5 °C impossible to achieve. The UN experts calculate that meeting a 2 °C goal will strand between $1–4 trillion of coal, oil and gas resources (and still more under 1.5 °C). In concrete terms, to meet Paris commitments “nations should stop burning coal completely” and slash oil and gas use by 60–70 % by 2050. Any company funding new mine or pipeline projects is therefore betting against these science-based scenarios. In short, supporting fossil fuel infrastructure today is a high-risk strategy: the carbon budgets and climate policies of the next decades will render many fossil assets obsolete.
EU Taxonomy Alignment and 1.5 °C Scenarios
The EU Sustainable Finance Taxonomy is explicitly a classification system for activities aligned with a net-zero, climate-friendly economy. It was designed to channel capital toward renewable energy and low-carbon solutions, not to legitimise new fossil projects. Under the Taxonomy, no new coal mining or coal power generation is considered environmentally sustainable. Even gas-fired power can only qualify under very strict transitional criteria that are narrowly defined. Those criteria generally require that a new gas plant replaces a retiring coal plant, has plans for future conversion to renewable fuels or carbon capture, and is part of a national coal phaseout plan.
In practice, few gas projects meet these hurdles. Climate Bonds Initiative observes that “fossil gas…requires a rapid decline” under any net-zero pathway, so any taxonomy provision for gas is expected to apply in “only a very small number” of cases. WWF has warned that attempts to reclassify new gas as “green” would fly in the face of climate science and Paris targets: the IEA Net Zero scenario, for example, assumes zero new oil and gas projects globally, with existing gas plants shut by 2035 in rich countries.
Thus, any real alignment with 1.5 °C would exclude companies expanding fossil fuel infrastructure. Even if an EU taxonomy-aligned fund might technically allow a tiny share of gas exposure (under very controlled conditions), SWISOX goes further: we demand that companies have genuinely sustainable revenue streams and have no major fossil expansion underway. In effect, SWISOX’s baseline EU-taxonomy filter is a minimum hurdle, after which any sign of large-scale coal or gas activity triggers exclusion.
The Perils of Greenwashing
Claiming to be “sustainable” while financing coal, oil or gas expansion is unfortunately all too common. Recent data investigations drive this point home. A study of roughly 1,300 European funds found that over 40% of funds marketed as “sustainable” held coal, oil or gas companies in their portfolios. Another analysis focused on major passive “ESG” index funds and found 70% of them were invested in companies actively developing new fossil projects. These funds may have ESG labels or names, but their holdings tell a different story: one even noted “significant holdings in fossil fuel developers” like ExxonMobil and Shell.
Such findings are a red flag for greenwashing. Misleading sustainability claims mislead investors and undermine trust. If “green” or “transition” funds continue to pour money into fossil infrastructure, investors cannot discern real climate action from spin. SWISOX’s strict exclusion helps close this loophole: by saying no fossil infrastructure build-out belongs in a sustainable category, we protect investors from labels that don’t match the underlying reality.
SWISOX Green Light List Methodology
SWISOX enforces a two-step screening process to ensure Green Light companies are truly aligned with a Paris-aligned future:
EU Taxonomy & standard exclusions. First, a company must meet EU Taxonomy alignment criteria (e.g. a required percentage of revenue from eligible sustainable activities) and not fall under any generic exclusion criteria (such as involvement in severe controversies, weapons, etc.). This step follows the same principle as the EU’s own taxonomy.
Exit-list exclusion. Second, and decisively, we check Urgewald’s exit lists. If a company’s ISIN appears on the Global Coal Exit List or the Global Oil & Gas Exit List, it is immediately excluded from Green Light status—regardless of any other scores or activities. Urgewald’s GCEL covers “the entire thermal coal value chain” across ~2,800 companies; its GOGEL covers upstream, midstream and gas-fired power companies representing 95% of global oil and gas production. Any company identified on these lists is, by definition, actively expanding fossil fuel infrastructure and is not considered sustainable.
This methodology makes clear that ticking a taxonomy box is not enough if the company is in the coal or gas business and plans to grow it or extend it. It reflects the consensus that fossil expansion is incompatible with our climate goals. In practice, it means a “Green Light” company will have both (a) high scores on sustainability metrics and (b) no major fossil fuel projects on the horizon.
A Classification System to Restore Trust
SWISOX’s approach is not a new niche segment of the market, but a rigorous classification standard – akin to a voluntary taxonomy or seal of approval – designed to rebuild confidence. The EU itself emphasises that its Taxonomy creates security for investors and helps protect private investors from greenwashing. Similarly, the SWISOX Green Light List provides a transparent framework: companies are either clearly Green (meeting our strict criteria) or not. There is no grey zone where fossil infrastructure builders hide behind vague “transition” labels.
By strictly excluding any company on the GCEL/GOGEL, SWISOX removes ambiguity. This hard-line stance is justified by the science and the market risks. It reassures investors that every Green Light company has passed robust filters and stands on the right side of the climate equation. In short, SWISOX is putting substance behind the “sustainable” label, so that the Green Light truly means green.
Conclusion and Call to Action
The evidence is unambiguous: any firm investing in new coal mines, oil fields or gas pipelines operates against the Paris climate goals. Climate science, stranded-asset analyses and sustainability regulations all point in one direction. Companies on exit lists like GCEL or GOGEL are fundamentally misaligned with a 1.5 °C future and can never be labelled sustainable.
SWISOX’s Green Light List enforces this by combining EU Taxonomy alignment with zero-tolerance for fossil infrastructure expansion. This two-tier filter – taxonomy first, exit-list second – ensures only fully committed, low-carbon companies earn the Green Light designation. It also brings much-needed clarity and trust to sustainable finance.
Join us in building the rest of the system. We are now developing the Amber and Red categories to cover “partial” or non-aligned companies. NGOs and sustainable finance experts are invited to contribute ideas and expertise. To stay informed and get involved, follow SWISOX on LinkedIn and subscribe to our newsletter. Together, we can advance a transparent, science-backed classification system that cleans up greenwashing and guides capital to where it truly belongs.
Sources: Urgewald’s Global Coal Exit List (GCEL) and Global Oil & Gas Exit List (GOGEL); CarbonBrief, “New fossil fuels ‘incompatible’ with 1.5C goal” (Oct 2022); AFP/Phys.org, “World’s fossil fuel assets risk evaporating in climate fight” (Apr 2022); Climate Bonds Initiative blog on EU Taxonomy gas criteria; WWF Europe, “EU taxonomy: secret attempt to brand gas and nuclear as ‘green’” (Nov 2021); EU Commission, “EU taxonomy for sustainable activities”(2024); Reclaim Finance report, “Unmasking greenwashing…” (Mar 2024); Follow The Money (Investico), “Greenwashing: 4 in 10 ‘sustainable’ funds invest in fossil fuel companies” (Apr 2024).
