In less than a week the most valuable company in history will make its debut on a publicly traded market. Saudi Aramco is both the most profitable and the most polluting company of all time. Its looming $1.7tn (£1.3tn) market listing is also evidence of the gaping chasm between Europe’s growing climate movement and the carbon addiction the rest of the world just cannot kick.

A year that has seen the most determined green investor activism, fossil fuel divestments and climbing climate targets will end with the largest single fossil-fuel binge in investment history.

Saudi Crown Prince Mohammed bin Salman put in motion plans to offer international investors the opportunity to own a piece of the world’s biggest oil company in 2016, only months after governments in Paris had agreed plans to tackle the climate crisis. Nonetheless, the world’s biggest investors, from Wall Street to the largest financial centres in Europe and Asia, still clamoured for a chance to help bring Aramco to market.

The scale of the world’s biggest IPO has since been scaled back in line with a waning western appetite for a company indelibly linked to the Saudi regime and its flaring geopolitical tensions. When Aramco makes its debut later this month, it will be on the local Riyadh stock exchange, for the dubious benefit of investors based almost exclusively in the Middle East. The plans for a second, international, listing are gone, as is the hope of a $2tn valuation, but Aramco’s failure to live up to Prince Mohammed’s desire for a place in the global investment community should not be chalked up as a victory for ethical investment.

Despite the cold feet of western banks, the float still attracted investor interest equating to more than five times the number of shares on offer. Aramco will still raise $25bn for the Saudi government, breaking the record set by China’s online retail giant Alibaba. It will also topple Apple – worth more than $1tn – from its position as the world’s most valuable public company. Its market capitalisation will tower above the combined value of the next five largest oil companies.

Saudi Arabia’s energy minister, Prince Abdulaziz bin Salman, has predicted that a $2tn valuation could still be on the cards once trading begins, and with Opec’s new deal to buoy global oil prices next year. He may be right.

The centuries-old bonds which bind global capitalism to carbon show little sign of fraying as the world’s fastest-growing economies remain keen to continue investing in oil, coal and gas.

Even investors wary of a future decline in demand are keenly aware that Saudi oil is some of the easiest and cheapest to produce in the world. If their investment horizons were to stretch to the day the world uses its last barrel of oil, that barrel would most likely be Saudi.

The funds flowing into the single biggest contributor to the climate crisis may not come from European investors, but this doesn’t mean Aramco’s move away from the west should not be ignored.

The limited listing effectively puts the world’s most polluting company beyond the reach of green campaigners, activist investors and the ESG (environmental, social and governance) codes followed by European banks. Aramco will not face political pressure from its state owners, or even from its neighbours in the region. The threat of divestment is meaningless for Aramco.

This is no reason to give up on the strides made in Europe. It is a reminder that these hard-won standards must gain traction beyond Europe’s financial centres, too. In the same way that the world’s rapidly warming atmosphere is blind to the geographic provenance of carbon emissions, the greening of the financial system needs to be global too.

Saudi Aramco’s market triumph may be more muted than planned, but it is still a deafening warning about tackling the climate crisis.

Virgin Trains terminates here



Like the high street after Woolworths, or the package holiday after Thomas Cook, rail travel will survive the passing of Virgin Trains this weekend; but it will be shaken nonetheless. The great disruptor, as Sir Richard Branson styled his brand, had become part of the furniture after 22 years. It was the first and only firm to run Britain’s main intercity service since privatisation.

Now, though, Virgin has been ejected in favour of First Trenitalia, some seven years after rival FirstGroup thought it had won the franchise. Instead, in 2012 Virgin – the champion of competition – cried foul and called the lawyers, and has sat prettily ever since on a string of direct contract awards from a befuddled Department for Transport.

The ironies do not stop there. Virgin later proved to have overbid to win the east coast franchise, and its default on payments led to it being taken over by the UK state operator, LNER. And the death of Virgin Trains also marks the end of transport firm Stagecoach’s interests in rail, as it follows National Express back to busland.

The founding myths of private rail – of the efficiency and flair that would vanquish British Rail’s curled-up sandwiches and associated public sector failings – are still aired. Yet with the handover of West Coast, as few as 7% of domestic journeys will take place on trains operated entirely by private firms. First’s partner Trenitalia is run by the Italian state, and state-owned firms from Germany, France, the Netherlands and beyond have a hand in virtually all British franchises, bar just two operated by First alone.

Virgin and Stagecoach extracted more than £600m in dividends. That is money that Labour argues the taxpayer could keep if services were renationalised – and unless the remaining private operations demonstrate a spectacular improvement, the question might increasingly be: why not?

Britain gets wealthier, and more divided



Britain has for decades lived off its wealth. In some respects this works for the nation, but in many ways it does not.

Last week official figures showed that the nation’s wealth grew to a record high in the two years to 2018, adding to strong gains made in the years since the 2008 financial crash and almost uninterrupted increases ever since the 1970s.

In the mid-1970s, the UK’s wealth equated to three times national annual income (GDP). By 2008, that ratio had risen to 5.5 times and now it stands at seven times GDP. In the 10 years to 2018, typical household incomes have increased by just 6% in real terms, while typical household wealth has gone up by 18%.

The best that can be said for our wealth is that it provides an asset from which to borrow money. There has also been a trend for selling ever-inflating assets to fill the 4-5% shortfall in the UK’s balance of payments each year.

However, wealth is pernicious in the way it divides communities and rewards those who would profit from buying assets only to milk them for an income while paying a tax at a rate lower than the equivalent income tax. The emphasis on building up wealth and assets – and if possible extracting an income from them – is also a reflection of the low wage rises on offer to those who make their income from work.

The situation has improved over the past couple of years, with a spread of wealth to millions of lower-income workers via their occupational pension schemes. The expansion has happened so rapidly that private pension wealth has become the largest component of overall wealth – marginally bigger than property wealth.

To some extent this reflects a slight cooling in the housing market, but an extension of wealth to lower-income groups must be welcome.