(This April 11 story corrects figure in third paragraph to 110 million, instead of 110,000 million.)

FILE PHOTO: A worker collects a crude oil sample at an oil well operated by Venezuela's state oil company PDVSA in Morichal, Venezuela, July 28, 2011. REUTERS/Carlos Garcia Rawlins/File Photo

LONDON (Reuters) - Legal and General Investment Management (LGIM), which manages assets worth 1 trillion pounds ($1.3 trillion) worldwide, said oil demand could start to decline from 2025 if countries impose strict policies to curb climate change.

The impact of moves to ensure the global rise in temperature remains below 2 degrees Celsius could be such that by the early 2040s oil demand would have dropped by around 40 percent from current levels to below 60 million barrels a day, LGIM said in a report published on Thursday.

However, if no new climate policies are implemented, oil demand could plateau at around 110 million barrels a day from around 2030, according to the study.

LGIM, the fund arm of insurer Legal & General, carried out the research with management consultancy Baringa Partners to identify companies that could benefit from efforts to curb climate change, but that would not be negatively impacted if such policies fail to materialize.

“It’s hard to argue that if oil demand starts to go into free fall, which is what we see as plausible, that ... the oil and gas industry as a whole remains as intrinsically as profitable as it does today,” said Nick Stansbury, LGIM’s head of commodity research.

Even if demand slumped, some oil companies could still be attractive investments if they react to the threat and position themselves to compete in the shrinking market, he said.

LGIM, which invests in oil majors including BP and Shell, last year joined a group of investors representing assets worth more than $10 trillion calling on the oil and gas industry to better align their businesses with climate goals.

It was also a signatory to a letter by investors sent to the International Energy Agency asking it to develop a forecasting model to take into account the lower emissions necessary to limit global warming to 1.5 degrees Celsius.

The Paris climate agreement, adopted by almost 200 nations in 2015, set a long-term goal to limit global warming to “well below” a rise of 2 degrees Celsius above pre-industrial times while “pursuing efforts” for the tougher goal of 1.5 degrees.

In June 2017, President Donald Trump announced that the United States, one of the world’s largest emitters of greenhouse gases, would withdraw from the Paris agreement.